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Online Commodity Trading
Commodity traders often concern themselves with long term fundamentals in trading futures on oil, agricultural products, and other commodities. As such they buy or sell futures that may not expire for a year or more. However, even futures contracts for a year hence can change in value in minutes when new news hits the market. Online commodity trading takes advantage of short term fluctuations in commodity futures prices. Online commodity trading takes advantage of any of several profitable day trading strategies. With profits in mind let us look at a couple of potentially profitable approaches to online commodity trading.
Is the Trend Up or Down?
Trend following in day trading applies to commodities futures just as much as to gold, oil, or pork bellies. Precious metals trend in directions opposed the US dollar, as do crude oil prices. Over short time frames a trader can buy a rising commodity future or sell short when a futures price is falling. Doing so successfully requires technical analysis skills as well as an eye on the fundamentals that eventually determine price. Traders watch moving averages look for channel breakouts and use age old tools like Japanese candlestick signals to help anticipate price changes. Traders tend to jump in and out of trades as the market moves, taking small profits throughout the day.
Define a Range
Another strategy for online commodity trading is to use technical analysis and a good grasp of the fundamentals to define a range in which a commodity future trades. Range trading in day trading is similar to trend following in that the trader limits his trades to a short stretch of trading and backs out before he loses his profits. Traders analyze fundamentals and keep track of market sentiment by way of technical analysis. In moderately active markets this strategy can work well. In very volatile trading it may be difficult to define a range as market inefficiency is rampant.
Hair Thin Profits
Traders who repeatedly gain hair thin profits jumping in and out of trades are scalping in day trading. This technique relies upon close attention to minute market changes and rapid response. Traders studiously avoid the old bugaboos of greed and fear and use a disciplined approach to picking and executing their trades.
What Is In the News?
Online commodity trading allows you to profit from the news in day trading. There are two ways to profit from the news. One is to have a crystal ball and anticipate it. The other is to have the fundamental background and technical skills necessary to read the market as the news breaks and make the most profitable trades. There is all too often over reaction and over correction to breaking news. Smart traders can reap handsome profits from a timely read of the news in online commodity trading.
They Must All Be Wrong!
A contrarian approach to day trading ...
2. COMMODITY TRADERS
OFTEN CONCERN
THEMSELVES WITH LONG
TERM FUNDAMENTALS IN
TRADING FUTURES ON
OIL, AGRICULTURAL
PRODUCTS, AND OTHER
COMMODITIES.
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3. AS SUCH THEY BUY OR SELL
FUTURES THAT MAY NOT
EXPIRE FOR A YEAR OR
MORE.
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4. HOWEVER, EVEN FUTURES
CONTRACTS FOR A YEAR
HENCE CAN CHANGE IN
VALUE IN MINUTES WHEN
NEW NEWS HITS THE
MARKET.
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5. ONLINE COMMODITY
TRADING TAKES ADVANTAGE
OF SHORT TERM
FLUCTUATIONS IN
COMMODITY FUTURES
PRICES.
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6. ONLINE COMMODITY
TRADING TAKES ADVANTAGE
OF ANY OF SEVERAL
PROFITABLE DAY TRADING
STRATEGIES.
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7. WITH PROFITS IN MIND LET
US LOOK AT A COUPLE OF
POTENTIALLY PROFITABLE
APPROACHES TO ONLINE
COMMODITY TRADING.
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8. IS THE TREND UP OR DOWN?
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9. TREND FOLLOWING IN DAY
TRADING APPLIES TO
COMMODITIES FUTURES
JUST AS MUCH AS TO
GOLD, OIL, OR PORK
BELLIES.
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10. PRECIOUS METALS TREND IN
DIRECTIONS OPPOSED THE
US DOLLAR, AS DO CRUDE
OIL PRICES.
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11. OVER SHORT TIME FRAMES A
TRADER CAN BUY A RISING
COMMODITY FUTURE OR
SELL SHORT WHEN A
FUTURES PRICE IS FALLING.
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12. DOING SO SUCCESSFULLY
REQUIRES TECHNICAL
ANALYSIS SKILLS AS WELL
AS AN EYE ON THE
FUNDAMENTALS THAT
EVENTUALLY DETERMINE
PRICE.
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13. TRADERS WATCH MOVING
AVERAGES LOOK FOR
CHANNEL BREAKOUTS AND
USE AGE OLD TOOLS LIKE
JAPANESE CANDLESTICK
SIGNALS TO HELP
ANTICIPATE PRICE CHANGES.
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14. TRADERS TEND TO JUMP IN
AND OUT OF TRADES AS THE
MARKET MOVES, TAKING
SMALL PROFITS
THROUGHOUT THE DAY.
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16. ANOTHER STRATEGY FOR
ONLINE COMMODITY
TRADING IS TO USE
TECHNICAL ANALYSIS AND A
GOOD GRASP OF THE
FUNDAMENTALS TO DEFINE A
RANGE IN WHICH A
COMMODITY FUTURE
TRADES.
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17. RANGE TRADING IN DAY
TRADING IS SIMILAR TO
TREND FOLLOWING IN THAT
THE TRADER LIMITS HIS
TRADES TO A SHORT
STRETCH OF TRADING AND
BACKS OUT BEFORE HE
LOSES HIS PROFITS.
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22. TRADERS WHO REPEATEDLY
GAIN HAIR THIN PROFITS
JUMPING IN AND OUT OF
TRADES ARE SCALPING IN
DAY TRADING.
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23. THIS TECHNIQUE RELIES
UPON CLOSE ATTENTION TO
MINUTE MARKET CHANGES
AND RAPID RESPONSE.
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24. TRADERS STUDIOUSLY AVOID
THE OLD BUGABOOS OF
GREED AND FEAR AND USE A
DISCIPLINED APPROACH TO
PICKING AND EXECUTING
THEIR TRADES.
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25. WHAT IS IN THE NEWS?
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27. THERE ARE TWO WAYS TO
PROFIT FROM THE NEWS.
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28. ONE IS TO HAVE A CRYSTAL
BALL AND ANTICIPATE IT.
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29. THE OTHER IS TO HAVE THE
FUNDAMENTAL
BACKGROUND AND
TECHNICAL SKILLS
NECESSARY TO READ THE
MARKET AS THE NEWS
BREAKS AND MAKE THE
MOST PROFITABLE TRADES.
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30. THERE IS ALL TOO OFTEN
OVER REACTION AND OVER
CORRECTION TO BREAKING
NEWS.
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31. SMART TRADERS CAN REAP
HANDSOME PROFITS FROM A
TIMELY READ OF THE NEWS
IN ONLINE COMMODITY
TRADING.
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32. THEY MUST ALL BE WRONG!
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33. A CONTRARIAN APPROACH
TO DAY TRADING WORKS IN
COMMODITIES JUST LIKE IT
WORKS IN STOCKS AND
CURRENCIES.
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34. THERE ARE MANY TIMES
WHEN THE VAST MAJORITY
OF TRADERS RESEMBLE
LEMMINGS RUNNING IN
GREAT HERDS OVER A CLIFF
TO FALL INTO THE SEA.
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35. A TRADER WHO TAKES A
DISPASSIONATE APPROACH TO
ONLINE COMMODITY TRADING
CAN AVOID FALLING PREY TO
GREED, FEAR, AND HERD
MENTALITY AND PLACE
PROFITABLE TRADES JUST AS
THE MARKET COMES TO
REALIZE ITS FOLLY AND PRICES
RISE OF FALL TREMENDOUSLY.
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36. AS ALWAYS, ONLINE
COMMODITY TRADING
MEANS THAT YOU NEED TO
BE THERE AT THE TRADE
STATION DOING YOUR JOB
WHEN THERE IS PRICE
ACTION.
GOOD LUCK!
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37. FOR MORE INSIGHTS AND
USEFUL INFORMATION
REGARDING
STOCK, OPTIONS, COMMODITIE
S, AND FUTURES TRADING
VISIT
WWW.PROFITABLETRADINGTIP
S.COM.
