I have taken profits on cocoa. Consistent with my new resolution not to take profits on weakness, I held my position through a pullback. This morning the price was up again, but no higher than the top of the recent range, and I took the chance to exit. I have not hit my profit target of 2 risk units, but that is because I entered the trade too late with too little leverage. Given that the cocoa market is prone to quick runs upwards that are reversed equally quickly — see chart — and that the price has reached a near-term plateau, and that there is a lot of alarm in the price, I decided that to hold on would be to compound the mistakes I made on entry, so took profits of around 1.5 risk units. The situation in Ivory Coast remains unresolved and the cocoa price may head upwards again, but on the other hand a lot of political risk is priced in (there had even been talk of an AU military intervention, which I’ll believe when I see it), and there could be plenty of time for prices to fall even if they subsequently rise again. Cocoa is one of the few agricultural markets that seems to have ample supplies this year following a good harvest (and much of Ivory Coast’s harvest has already been exported).

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