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Cup o' coffee anyone?


Mercury

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haha. yeah the amount I spend on coffee!!!  I should get a discount on the cfd's 

Interesting issue @dmedin, and one I have struggled with myself.  I have a few personal insights for you, if care for them, as follows: Firstly I use multiple time frames for both analysis and a

I think we can all relate to that @dmedin.  You raise an interesting point from an investment and trading perspective as well as a couple of issues prevalent in the wider economy.  Quite a lot for one

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  • 3 weeks later...

mercury - 

 

Ive just read your entire thread with great interest.  I tend to agree with your long term macro views and charts.  I also think we have passed the bottom and the start of the 30K move up is in its early stages.  I think this may be even more given the most recent circumstances that have occurred since the market bottom last year.  I'll elaborate later.

I started trading coffee a few years ago, I can't remember why I started now...  But instantly I became a great fan of trading coffee.  I like it personally because I think its a relatively simple commodity to trade and I seem to understand most of the factors involved in the price action.  Its also widely over looked.  

 

Any ways... my thoughts, for what they are worth....

Coffee has been in a long term price decline, as you and the charts point out.   My reference time frame is the high of 30k in 2011... since then we have had the major decline.

I followed the coffee price very closely the last couple of  years as I thought the bottom of the long term channel was coming and it could be my trade of a life time lol.  As it passed down through 10k in 2019....  I was looking for a long entry point to buy up to the top of the declining channel (around the 11500 region I had planned for)  I had been successful in this a few times prior and done ok, however I ended up loosing quite a substantial amount as the retrace didn't come and I chased the price lower.... The price descended down through the bottom of my trend line and I was quite shocked... how much lower could it go???  Nothing like loosing money to focus the mind.... At this point, I left trading coffee behind, I guess I was burnt and became emotionally attached to the price... So I left it behind and walked away from trading for a while to focus and clear the mind.  I wanted to trade, not gamble.

Any ways.... March 2020 - corona virus, lots of spare time and lots of volatility... I started pouring over the charts again and looking for some easy quick trades on the back of the volatility.  

Coffee came to mind.  Because of the fundamentals.   The virus was ravaging the west, sadly we knew it was going to do the same in South America,  This was surly going to have some big impacts on the price over the next year or so.  Simple supply and demand... farmers in fear, logistics in disruption... re-supply, distribution.  Poor economic recovery etc.  I started taking a look.

It was then I did a lot of work on the charts.... One particular theme emerged.  May 2019. Tuesday 7th May 2019 to be precise lol.  Thats the date I think the price turned.  I think that was the bottom... Of your pivot point theory. The bottom was retested in June, but the price held.  This was all pre-covid.... look at the price action from May 2019 to Jan 2020... 9k up to 14k.... the bounce off the 14k mark was the top of the down trend, down to 9.5k so a higher low and the start of the new up trend...  all things being equal....

However - this is where the spanner is thrown in the works.  Covid. dollar movement etc...  would this have gone lower had the covid factor not played out?  

Where we are now.... I think coffee has some real potential and firm foundation moving forwards.  Inflation, declining dollar price, turmoil in South America, disruption to farming, logistic in the country etc... on top of the reversal I believe happened in 2019.  

Just wanted to say thanks for the interesting charts and discussion topic.  Glad I have finally found one on coffee.

Trade: Short Term - Aug-Oct

Currently short coffee - entry 11680 planned exit 10500.

Trade: Long Term - Nov-March

Planned entry 10500 - planned exit 13k.

Macro ::::: BIG TEST Nov-Jan 2020

If 10k holds then I'm going to go big and accumulate over the years.  Im thinking a move from 10k to 20k by late 2021 and 30k by 2024.

 Any one know of any decent coffee ETFS for the SIPP or ISA?

 

 

 

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2 hours ago, deankh said:

haha. yeah the amount I spend on coffee!!!  I should get a discount on the cfd's 

Do you find it easier to trade coffee than the other commodities (which don't require so much margin)?  I've heard that many traders specialize in particular commodities or markets.

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