#145: BEFORE YOU EAT BREAD, PROFIT ON WHEAT
Some people in the Czech Republic (where I originally come from) love recalling the time of deep communism.
Their common argument is “bread was cheaper during communism”.
I’m honestly not really sure what they mean by that. To me, bread still seems to be damn cheap. And after all the inflation, I think it’s even cheaper than during communism.
So it triggers me a bit when I have to listen to this silly argument.
I think it’s just a stupid opinion. So I always reply with a similarly dull answer:
“If you think bread is expensive, compensate for it with some Wheat trading”.
Of course, that’s where the conversation usually ends (which is understandable).
But we are traders, so let’s go a bit further.
Of course, I never mean “compensate for it with some Wheat trading” literally. But it doesn’t mean I am not a big fan of the Wheat market.
I think it’s a really great market for breakout swing trading.
In fact, we have quite a few Wheat breakout strategies in our hedge fund database, and some included in our CTA program.
And this is what they, in general, look like:
I think it’s good enough to consider them a part of the trading portfolio. Of course, the equity you’re seeing is an out-of-sample compilation only (no in-sample included). And the performance beyond the vertical blue line is since the strategy completion (all our hedge fund strategies were developed and robustness-tested with the framework I share in the Breakout Strategies Masterclass).
So, perhaps, next time, before you eat bread - bring these examples to your mind.
There is definitely some nice potential in the Wheat market.
As well as in other futures markets - with good, robust breakout strategies.
Happy breakout trading.
Tomas
