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USDA Crop Report Release Today

Posted by David Bean on

The USDA Crop Report came out at 12:00 noon EST today. We made the video below before the report and we were long Soybeans. It will be interesting to see if the news stops us out of our position or if it moves in our favor. We also had the EIA Weekly Inventories Report for Crude Oil out today at 10:30 am EST. Our strategy for this report went long on the trade. Crude is up from our entry price at the moment. We will see how the rest of the day goes.

There are two main points that I want you to take from this. (below the video)

This first point is, we trade the strategy the way we tested it. When these strategies were developed, we did not remove the historical dates for these reports so it must be traded the way it was tested in order to follow the strategy. You could go back and find the dates for these reports and see if it is best to exit before the release of the report or if there is an actual way to trade the report. I found Crop Production historical reports back to January 1964 in the USDA database. You won't find me sitting up at 2 am reading the 1960's crop production reports to find day trade strategies in the current market environment. However, the historical dates in which they were released could help us filter trades by not trading on those days or taking takes the way we do with Crude Oil Weekly Inventories (by using that date as a catalyst for a trade). Obviously our Crude Oil Weekly Inventories strategy is different that Soybeans DayTrader III since it waits for the report to be released in order to take a trade while Soybeans DayTrader III is a strategy based on price action and not news reports.

Why is tracking reports such as the USDA Crop Report relevant if the strategy does not trade based on the report?

This leads us to our second point. Double check your automation before these types of reports (computer is on and it is connected to the internet). Automation can be a Catch-22 if you do it so that you do not have to watch price action or find that watching price action creates emotions followed by actions where you over ride your strategies. The reason it is a Catch-22 is that it is still important to make sure that your automation is working and that you computer hasn't crashed, the internet is still connected, or the power is still on. This requires you to "check in on it" (which can then capture your emotions). For the most part, you can let automated trading "do it's thing" and not watch the market or your trades during the day with current technologies such as the platforms we support and by using a VPS or Dedicated Server. Since we should check our automation from time to time, checking it around these news events, fast markets, or scheduled reports is the best time to check it. I don't want to log in at the end of the day and see that automation was off, my stop loss wasn't activated, and I'm on the wrong side of a limit move.

 


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