Commodity Trading Blunders I, PART 1 - My Early Days As A Novice Trader
There is continually "year one" for every commodity futures trader. I had mine and created each mistake a trader can build and more. Here's my story of how I stumbled into the lion's den, got gored some times and even made some money. My hope is that beginners can browse this and avoid some of the additional obvious stuff. Here's to all new traders!
It began within the spring of 1979. I used to be 28 years old. I was within the workplace of my new retail electronics company. I was going over some paperwork and got a decision from a young and excited broker from Boston Commodities, or some name like that. He should have had the list of new businesses and was cold calling the small business owners.
I had no idea, but at the time sugar was in a major bull market trading at around 11 cents and destined to achieve 45 cents later in the year. Gold, silver and copper were additionally making new highs. Bunker Hunt was cornering silver on its method to $fifty an ounce. Gold was destined to hit $800. Anyway, this child from Boston was on hearth and told me I was missing the opportunity of a lifetime in sugar futures contracts. He needed to mail me some hot news off the commodity news wire. He was trying for a $fifteen,000 stake; a heap of cash in the late seventy's. He said he would obtain me four futures contracts of sugar. I did not recognize anything regarding commodities at this point, but told him to send over the info anyway.
When it arrived, it absolutely was the same old bullish hype concerning shortages, disease and reasons sugar had nowhere to go but up. Somehow he knew to call the instant I received it. He convinced me I could create an straightforward double or triple, thus I agreed to send him $15K. Now, this part gets interesting. I hadn't opened an account or sent him money yet. He said he required to place me on the phone with trading to lock in my four futures contracts for the following day. I used to be confused, but agreed.
The next factor I knew a bloke answers the phone with a gruff voice and yells, "TRADING!!!" I said I didn't recognize if I ought to be talking with him as a result of I didn't know what to order. I assume that they had me on a speaker-phone as a result of I heard some guys laughing in the background. He said, "OK, you're locked in for four Oct sugar commodity futures contracts on tomorrow's open." I said, "OK, I suppose," and hung up. By the means, why is it the most aggressive brokers put on a gruff, hoarse voice act, like they've been in the trading pit yelling all day? I hear it all the time... ridiculous.
The kid commodity broker known as right back to congratulate me on my good decision. He sent me the commodity account forms by overnight service. I must admit I was excited. I had no idea about the commission rates, risk potential, position sizes… nothing! However I needed in! I was the proper sucker. When the account forms arrived I filled them out and was obtaining prepared to send everything back.
By coincidence, I got a decision from my CPA on a completely different matter. I explained to him about this new venture. Somehow he knew one thing was amiss and told me to let it go. I known as the Boston Commodity Child back and told him my CPA gave it thumbs-down. I had a onerous time getting the child off the phone. He referred to as me spineless; he said I needed to be a true man, and I'd regret missing out. He conjointly said I needed to prevent acting sort of a woman. For the subsequent 3 days his buddies took turns operating me over trying to close the sale. Meanwhile I started reading concerning commodity futures trading. That was the primary right move I made!
Author Resource:
aaron adish has been writing articles online for nearly 2 years now. Not only does this author specialize in Investing, you can also check out latest website about
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