I wonder what would happen if you went in with the mindset you would buy wheat and if it goes down you would just buy more say every 25 cents drop till it goes back up, dollar cost averaging. If you look at the chart wheat always goes back up if you just would have held on. Iv also hear most grains are below the cost of production now.
Averaging down is considered foolish in the markets. One is better to buy on strength to reduce the risk and increase the probability of success. Yes, wheat 'always' goes back up, but we don't know when. Wheat is currently on a 2.5 year decline. From Feb 08 to Aug 16 was 8.5 years. April 96 to Aug 2000 was 2.3 years. It can go down longer than you can stay solvent. If you attempt to catch a falling knife, one should have an entry and exit plan. If one insists on your strategy, WEAT could be a better vehicle than futures.
@@KlarenbachResearch Good point! Also why dont you ever use seasonality charts to help you in your trading decsions? You use price charts obviously,, just curious.
@@magnumpi28In my opinion, seasonality charts on their own have little to no utility. I have many seasonality charts that show little to no consistency. I find that they do not provide enough of a signal to make a decision. To use them properly, one must use them in conjunction with other tools. Larry Williams, for example, has done a lot of work with seasonality charts and is likely the expert on them. I think they are a great conversation piece and can bring attention to the historical tendency of the commodity but not enough detail to make an effective buy or sell decision.
