Grain charts are too erratic for me to trade profitably today. When this happens, I read a book and watch the charts. When the charts begin to look right to me again, I'll begin to trade. Until then, I watch and wait.
I watch for three conditions in order to trade:
- Tight spreads. On this measure, soybeans and corn are fine. Wheat spreads haven't widened to the point that I won't trade them.
- Sustained, reliable movements, either up or down. This is hard to describe, but I know what it looks like. Perhaps the term market noise is a good way to describe poor trading conditions. Right now, the charts don't look right.
- Volatility. Without volatility, it become worthless to try to trade because the risk/loss ration is too high and profits can't be obtained.
