Profitable Commodities Trader

Profitable Commodities
Trader

By www.ProfitableTradingTips.com

Profitable Commodities Trader

 Whatdoes it take to make money trading
wheat, corn, crude oil, or gold bullion?

http://profitabletradingtips.com/trading-investing/profitable-commodities-trader

 What are the ingredients that make a
profitable commodities trader?


 This discussion is about traders who pick
and choose the commodity they want to
trade, follow the markets closely, and
place trades based on opportunity.


 This
is not about companies trading
commodity futures in order to hedge risk.


 Producers and buyers of
wheat, corn, crude oil or gold bullion buy
and sell futures contracts or options on
the same.


 They limit themselves to the commodities
that they deal with.


 The profitable commodities trader, on the
other hand, surveys the markets and
latches on to opportunity when it arises.


In Search of Volatility

 A profitable commodities trader starts by
finding where price action will be, whether in
agricultural commodities, energy
commodities, or precious metals.


 This
requires a combination of
fundamental and technical analysis.


 Many times a profitable commodities
trader will subscribe to an alert service in
order to more efficiently spot trading
opportunities.


 A droughtin the Ukraine may drive up
wheat prices while the threat of civil unrest
in the Middle East tends to drive oil and
natural gas prices higher.


 Tothe extent that the profitable
commodities trader has special insight
into supply and demand for a given
commodity he or she has a good head
start.


 Then the issue is to successfully read
market sentiment with technical analysis
tools.


Keeping Your Head while All About
You Are Losing Theirs

 Manytimes news that shakes the
commodities markets occurs when
markets are closed.


 The commodity that is affected will gap up or
down at the open and then exhibit a degree
of market inefficiency for minutes, hours, or
even days as a market consensus is
reestablished.


 It
is this period of market inefficiency that
makes a profitable commodity trader.


 Thesmart trader has done his homework
and knows how to interpret the news.


 He has a clear idea of the range in which
the commodity ought to trade, based upon
fundamentals and his analysis.


 When market psychology, the twin
demons of fear and greed drive prices
higher or lower than fundamentals warrant


 theprofitable commodity trader takes a
contrarian approach to day trading and
trades accordingly.


 He may do this in standard commodities
trading, buying or selling futures.

 Orhe may choose to buy or sell options
on commodity futures.


 Usingthis route helps him or her limit risk
and leverage trading capital.


You Don’t Lose if You Don’t
Trade

 Thefamous baseball pitcher Satchel Page
was criticized for holding the ball in his
hand and not pitching immediately in
tough situations.


 Hiscomment was that when the ball was
in his hand the batter could not hit it.


 If you approach commodity trading like a
trip to the casino you will not be a
profitable commodities trader.


 The profitable commodities trader does
his homework, sets up his trades, and
executes his trades when, and only
when, they make sense.


 Hemay follow any of a number of
profitable day trading strategies.


 What differentiates him from less
successful traders is that he waits for a
good trade, executes it, and waits for the
next.


 If
he does not understand what is going
on he follows the sense of the advice of
Satchel Page and does not make a trade.


 For
more insights and useful information
about trading stocks, commodities, or
Forex, visit
www.ProfitableTradingTips.com.


Profitable Commodities Trader

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