Corn/Wheat/Soybean Seasonal Trade

Entry Logic

• Exact Entry Trigger: Enter long agricultural futures (e.g., ZC, ZW, ZS) during their typical seasonal strength periods. For example, go long corn in the spring and summer.
• Confirmation: The price action should confirm the seasonal tendency, with the futures trading above their 50-day moving average.
• Timeframe: Daily chart.
• Location Context: Not applicable.
• Market Condition: A market that is influenced by seasonal patterns.

Exit Logic

• Profit Targets: A fixed target based on the historical seasonal pattern.
• Scaling Out: Not recommended.
• Trailing Stop: Trail the stop loss below the 50-day moving average.
• Signal Failure Exit: Exit if the price breaks below the 50-day moving average.
• Opposite Signal Exit: Not applicable.
• Time Expiration: Exit the trade at the end of the seasonal window.
• Momentum Loss: Not applicable.

Stop Loss Structure

• Hard Stop: A fixed stop based on a percentage of the contract value.
• Soft Stop: Not used.
• Max Dollar Loss: Varies by contract.
• Max Percent Loss: 2% of account capital.
• Structural Stop: Not applicable.

Risk Management Framework

• Risk Per Trade: 1% of account capital.
• Maximum Daily Loss Limit: Not applicable.
• Maximum Weekly Loss Limit: Not applicable.
• Maximum Drawdown: 15% from peak equity.
• R:R Requirement: Minimum 2:1 risk-reward ratio.

Position Sizing Model

• Sizing Approach: Fixed contract size.
• Volatility Adjustment: Not applicable.
• Conviction Sizing: Not applicable.
• Scaling In: Not recommended.
• Scaling Out: Not recommended.

Trade Filtering

• Market Conditions to Avoid: A market that is not following its typical seasonal pattern.
• Specific Setups Required: A clear seasonal tendency with confirming price action.
• Instruments: ZC (Corn futures), ZW (Wheat futures), ZS (Soybean futures).
• Time Restrictions: Trade only during the specific seasonal windows for each commodity.
• Chop/News Avoidance: Be aware of major weather events or government reports that could disrupt the seasonal pattern.

Context Framework

• Trend Direction: Trade in the direction of the seasonal trend.
• VWAP Relationship: Not applicable.
• MA Relationship: The price should be above the 50-day moving average for long trades.
• Range Location: Not applicable.
• Higher TF Alignment: Not applicable.

Trade Management Rules

• Breakeven: Not applicable.
• Scale Out: Not applicable.
• Add Size: Not recommended.
• Fast vs Slow Moves: This is a slow-moving strategy. Be patient.

Time Rules

• Optimal Trading Window: The specific seasonal window for each commodity.
• Times to Avoid: Outside of the seasonal window.
• Session Notes: This strategy can be traded in any session.

Setup Classification

• A+ Setup: A strong seasonal tendency with confirming price action and favorable weather conditions.
• A Setup: A good seasonal tendency with confirming price action.
• B Setup: A weak seasonal tendency or conflicting price action.
• C Setup: Avoid. No clear seasonal pattern.

Market Selection Criteria

• Instruments: ZC, ZW, ZS.
• Volume/Liquidity: High volume and liquidity are essential.
• Volatility: Moderate volatility is preferred.

Statistical Edge Metrics

• Win Rate: 60-70%.
• Avg Win: 2.5R.
• Avg Loss: 1R.
• Profit Factor: 1.75.
• Expectancy: 0.75R per trade.

Failure Conditions

• When Strategy Fails: When a major event, such as a drought or a trade war, disrupts the typical seasonal pattern.
• Specific Scenarios to Avoid: Trading this strategy when there are known factors that could negatively impact the seasonal tendency.

Psychological Rules

• Mental Discipline: Have a good understanding of the fundamentals of the agricultural markets. Do not trade based on emotion.

Advanced Components

• Regime Detection: Not applicable.
• Filters: Monitor weather forecasts and government reports.
• Correlation: This strategy is based on the correlation between price and seasonal patterns.
• MTF Alignment: Not applicable.

Location

• Where Strongest: When the market is following its typical seasonal pattern.
• Where Weakest: When there are major disruptions to the supply and demand fundamentals.