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Commodity Supply and Demand
Fundamental analysis in commodity trading has to do with anticipating commodity supply and demand. Successful traders who sell commodity futures and those who buy commodity futures learn and follow the various aspects of commodity production. Gold futures are affected by the fact that gold mining companies are digging deeper for gold in developed countries and exploring in politically unstable regions of the world. Corn futures are affected by drought, flooding, and the worldwide acreage planted. Oil futures are affected by disasters such as the BP oil spill in the Gulf of Mexico. Commodity supply and demand is the basis of commodity price. Anticipated commodity supply and demand is the basis of commodity futures price. Commodity demand rises for industrial metals like copper and energy commodities such as natural gas during an economic recovery. Thus commodity supply and demand together determine commodity price. To understand how commodity supply and demand, as well as market factors, determine commodity prices a new trader ought to consider Commodity and Futures Training. For the more advanced trader in commodity options a course such as Options Training with Stephen Bigelow can be very useful.
Traders in commodities buy futures and sell futures. Buying puts, buying calls, selling puts, and selling calls on commodity futures is also done and can be profitable as well. Trading supply and demand has to do with fundamentals of the individual stocks, options markets, commodities, and futures of the equity market that one is trading. Technical trading has to do with anticipating the actions of others in the market. Unlike trading other equities basic supply in the case of commodities really has to do with just how much of the commodity there is for sale, not how much stock, for example, is available at a given price. Demand for agricultural commodities has to do with how many hungry people there are and how much they can pay for rice, wheat corn, milk, eggs, and meat. Demand for energy commodities goes with a thriving economy as well as severe northern winters. It drops during a recession and when a northern hemisphere January is mild.
2. Fundamental analysis in commodity
trading has to do with anticipating
commodity supply and demand.
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3. Successful traders who sell commodity
futures and those who buy commodity
futures learn and follow the various
aspects of commodity production.
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4. Gold futures are affected by the fact that
gold mining companies are digging
deeper for gold in developed countries
and exploring in politically unstable
regions of the world.
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5. Corn futures are affected by
drought, flooding, and the worldwide
acreage planted.
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6. Oil futures are affected by disasters such
as the BP oil spill in the Gulf of Mexico.
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7. Commodity supply and demand is the
basis of commodity price. Anticipated
commodity supply and demand is the
basis of commodity futures price.
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8. Commodity demand rises for industrial
metals like copper and energy
commodities such as natural gas during
an economic recovery.
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9. Thus commodity supply and demand
together determine commodity price.
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10. To understand how commodity supply
and demand, as well as market factors,
determine commodity prices a new
trader ought to consider Commodity and
Futures Training.
www.CandlestickForums.com
11. For the more advanced trader in
commodity options a course such as
Options Training with Stephen Bigelow
can be very useful.
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13. Buying puts, buying calls, selling
puts, and selling calls on commodity
futures is also done and can be
profitable as well.
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14. Trading supply and demand has to do
with fundamentals of the individual
stocks, options
markets, commodities, and futures of
the equity market that one is trading.
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15. Technical trading has to do with
anticipating the actions of others in the
market.
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16. Unlike trading other equities basic
supply in the case of commodities really
has to do with just how much of the
commodity there is for sale, not how
much stock, for example, is available at a
given price.
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17. Demand for agricultural commodities
has to do with how many hungry people
there are and how much they can pay
for rice, wheat corn, milk, eggs, and
meat.
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18. Demand for energy commodities goes
with a thriving economy as well as
severe northern winters.
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19. It drops during a recession and when a
northern hemisphere January is mild.
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20. Successful options trading in commodity
futures is just as strongly related to
commodity supply and demand as is
buying and selling commodity futures.
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21. Buying options gives the buyer the
option but not the obligation to
purchase or sell if commodity futures
price movement is beneficial.
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22. Selling options on commodity futures
entails the same set of risks as buying
and selling stock options.
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23. It tends to be more profitable over the
long run but can result in occasional
substantial losses.
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24. In commodity options, just like stock
options, it is the large investment houses
and companies with deep pockets who
typically engage in options trading of
commodity futures.
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25. All trading in futures and options may
ultimately depend upon supply and
demand.
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26. However, the business of buying and
selling at the optimal price is most
commonly and most efficiently assisted
by use of technical analysis tools such as
Candlestick analysis.
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27. In the end everyone knows the
fundamentals and it is the ability to
predict the sum total of what other
traders will do that leads to profits.
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