Cotton future spread

Market demand for cotton was pretty high starting from last November & price was getting higher all the time because of a limited supply too. But currently, cotton ICE future prices depends mostly from weather conditions at so called USA "cotton belt" plantations of Texas, Arkansas, California, Mississippi & Arizona states. In this states cotton planting begins in the end of February & continues until the beginning of April. So prices move according to this cycle - they reach maximums of the year somewhere in the middle of March. During this period cotton seeds in the ground are very vulnerable, so traders are concerned with a future crop. But after this period of concerns usually weather stabilizes, pollination begins & prices go down. And average seasonal chart shows this fact:

According to some messages, weather conditions in other parts of a world where cotton grows are stable & good. In Brazil weather is warm & rains are expected in the end of this week. There was a good opportunity to sell this calendar spread today at 2.00 price. But my margin is exhausted because I made a mistake when opened a crude oil sell position at 0.99. So I'll just keep in mind this cotton seasonal. This cotton position has to be closed in the beginning of April or with a $450 profit.

Crude oil fundamental data

Crude oil is falling maybe mainly because of Chinese exports is decreasing. The concerns are that China's economy will slow down it's growth. Overseas shipments fell 18% in Feb from a year earlier - this is the biggest fall since Aug 2009. Analysts expected 7.5% growth. China is the second biggest economy in the world & the second biggest consumer of crude oil.

I want to remind that I'm bear crude oil calendar Jun-Jul spread from 0.99 with a target at 0.30 or close a position with any result at the end of this month.

CHANGE OF TACTICS

During all this last trading year I was trying to trade according to fundamental seasonal statistical data & technical analysis. But I noticed, that technical analysis very often does not allow you to profit from your trades. When speaking about technical approach - I was trading using simple horizontal supports & resistances. I placed limit orders near this levels when seasonality starts hoping that price will fill them, but sometimes price didn't reach them & was moving straight according to seasonality. Also, in other cases, this orders where filled, but then after that price went through the level & I had to close position with a loss. Sometimes after the loss was closed the price right on the next day was moving again in a favor of the previous position. Sometimes, after loss was accepted, it was harder to find a new support level & place a new limit order. So after all, a lot of positions where closed with a loss, BUT 90% of them, eventually, if they weren't closed with a loss would end up with a profit according to a seasonality.

So now, I'll try to trade only according to a statistical seasonality patterns using calendar only. This means: I'll open a position right when seasonality starts (or +-5 days) and close it when it finishes (+-5 days). Of course, using this tactics, there might be up to 10-15% equity draw downs, but, eventually, this approach should be less stressful & more profitable. Using only fundamental & statistical data will be profitable because technical analysis does not always work as expected. Less filters means more profits.

Back to positions. May-July copper spread sell limit was moved down to 0.01, seasonality remains all the way to the end of a month. Wheat sell position remains opened also until the end of this month. New seasonality begins in Jun-Jul crude oil calendar spread. Sell limit is placed at 0.99 until the middle of a month.

And sell limit is at sugar spread May-Jul months at -0.11 also until the middle of this month.