Latest Trades (9 to 14 Feb 2022) -Shorting Iron Ore Stocks

Since my last trading update, I have made 5 more trades, all involving Rio Tinto and Champion Iron. The first 3 were losses, the last 2 were wins. Fortunately, the 2 wins added up were greater than the 3 losses.

Below is a summary of these 5 trades. Do note that these are all short trades via CFD, so I’ll make a profit if the prices go down. The profits stated are approximate, as the positions were established using many small trades, and my trading platform’s history function does not capture a consolidated profit figure.

Summary of Trades

Stock ShortedEntry priceExit pricePosition SizeProfit
1Champion Iron7.08 – 7.14$660k-$10k
2Rio Tinto (Australia)117.349 – 117.416$660k-$25k
3Rio Tinto PLC (UK)5584 – 56145787 – 5790$400k-$14k
4Rio Tinto PLC (UK)5681 – 58115665 -5694$3M$36k
5Rio Tinto PLC (UK)5683 – 57415651 – 5654$3M$28k
Summary of short trades taken

Below is a screenshot of my last trade taken from my phone trading app.

Prices slipped before I could capture profits at this level, so I ended up with only about $28k in profit (factoring in trading transaction charges).

I increased my position sizes significantly for the last 2 trades, as I had greater confidence that my trades would go well, due to market developments. It was not because I wanted to quickly make back my losses. Please do not carry out any low conviction trades to cover recent losses, as these most likely will not turn out well.

I held the 5 trades only for 1-2 days each. This is because the sector is very volatile with changes in market dynamics every day. Thus it would be prudent to not be too greedy and take quick profits where possible.

Iron Ore Market Outlook

Iron ore prices have been very volatile.

Iron ore price as at 16 Feb 2022

There are massive forces at play in both the bull and the bear camps. The bulls think that China property controls will ease to increase steel and hence iron ore demand, and inflation is good for commodities in general. The bears feel that current and future fundamentals do not support the run-up in prices. And China is trying hard to suppress the prices to relieve costs for its industries.

conclusion

Even though the volatility may reduce predictability and hence lower the % of successful trades, it may also result in more trading opportunities being generated. Going ahead, I will continue to monitor closely and make quick trades where possible.

Author: novaliser

I have been trading since 2012, and retired from the corporate world in Dec 2021 after accumulating enough profits to feel comfortable living without a stable monthly income.

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