Commodity Trading

1. No matter what FX Forex currency trading system you employ whether or not it be a manual or automatic one. No matter if it’s day buying and selling, swing dealing, scalping investing or no matter you have to give it long enough to discover final results. It is well for being sidetracked by what each and every 1 else is doing. Focus on everything you are executing.

2. Most people today don’t review what they may be doing. Keep a buying and selling diary. Why you did that which you did and when. Evaluate what you did well and anything you did not so you can eradicate mistakes and duplicate winning trades.

3. Rome was not built in a day. Don’t surrender too quickly and don’t be expecting to earn a lot of money from day 1. Set goals by all means but keep them achievable.

4. If you’ve bought an FX Currency currency trading system which can be unprofitable cut your losses. Precisely the same obviously applies for your trades. For every trade you make you have to determine a point exactly where you may exit if it goes towards you. Permit your winners run and cut your losers quick. Tend not to depend on prayers to realize your objectives.

You have to be brutal when chopping losses. I understand I’ve been there it is so easy to attend just somewhat bit lengthier in the hope that the trade will start off coming back again. Otherwise you may be tempted to common down. I’d not recommend that unless that you are 100% sure which you in no way will be !!

5. Whichever currency trading system you employ, money management is completely essential. When you allow far too much on one trade you may come up trumps a few times but you may lose out long term, in reality in time more than probably lose everything if you regularly place risky trades like this. It is best to in no way chance over 1-3% of one’s trading cash on one particular trade.

It’s said that 85% of Forex traders are losing their money in the first three months of their trading, I think in some market cases it exceeds this ratio and may hits 95%, most of people say this loss is a result of trading while having no strong knowledge about Forex market, I don’t agree this all the way.
For me I think the most important reason is trading style including strategy, money management and risk management, another important reason is crowding up your mind with a lot of technical and fundamental tools and trying to apply all of them at once.
Theoretically all analysis methods “wither it’s technical or fundamental” are correct ways because they are only measuring tools, they differs in the accuracy of their results and this varies from time to time, they just give you inputs and you are responsible of applying these inputs that’s why I don’t mind which indicator you are using, just try not to crowd your mind with a lot of them.
To move yourself into the successful 15% you don’t need to know a lot in analysis field, you don’t need to have a big capital too. I wouldn’t encourage you to be calm, concentrate, look at your charts and go the way they tell you and such advices. We’ll be instead discussing the actual steps that you can take in order to get yourself out of loss and list your name in the 15% successful traders list. The best resource for FOREX  trading is MoneyTec MoneyTec,   – Active Traders Community Forum, Chat. MoneyTec is an online trading community that promotes mature, intelligent & respectful discussion in a positive & safe environment for everyone.
My strategy depends on simplicity as it just includes 2 indicators for the technical part of it. Let’s see how would it work:
a)    Money Management:
1.    First of all count your capital well and I mean by this the money you can afford to lose “this is rule no. 1 in investment as this will remove stress from you”.
2.    Decide your monthly return average expectation from this money : This will make you able to count the average weekly and daily return “Weekly and Daily Target”.
3.    Decide what will you do with your profits in case you achieve your targets, how much will you get out from it and how much will you re-invest : This will be enough to have a steady and stable trading strategy.
4.    Most important point, limit your trade size, this shouldn’t exceed 5% of your balance if you want to survive in this market.
These are all what we need from money management right now, it’s a huge subject to be involved in.
b)    Risk Management :
1.    Limit your loss : The whole money you can afford to loss from your investment budget.
2.    According to your daily and weekly target, you could limit your daily and weekly loss, so if it touch that limit you stop trading till the other period of time, risking of $1 per $3 expected profit is good while 1: 2 still accepted.
3.    Keep in mind that “If you lost a day, it means you lost that day’s profit of the total month’s profit” don’t try and squeeze yourself the day after to get a double profit, otherwise you will be spoiling your trading system.
c)    Technical Trading System :
This trading system is a common old system traders were used to use it randomly, we will be using it in a more modern way, it contains of :
1.    2 Exponential Moving Average (EMA) of values 7 – 15 .
2.    Relative Strength Index (RSI) as a confirmation tool.
Well, now as we have everything setup, it isn’t so hard to understand that system, the usual way was used by traders is : “once EMA-7 cross EMA-15 you go with it, so if it cross to up, you buy, otherwise you are selling”, this is completely true but you need to confirm this signal by another tool like “RSI”, once you get Moving Averages signal you check your RSI line direction and value, if it’s positive you can start trading, if not you should ignore till you get a positive signal that everything is fine, your stop loss would be if the EMA-15 returns to cross EMA-7 and your stop loss would be 20% of your daily affordable loss that you decided before, so you have a chance to trade for 5 times per day if you lost all trades.
Keep in mind that you shouldn’t put all trade size limit “which you decide before while setting up your money management section” in just one trade, you may need to support your trade later or add more fund to it.
Last thing to be said is the classical advice “Don’t be greedy and don’t feel panic”, this is the best feature we have in Forex, take profit and stop loss points.

Washington, DC, United States (AHN) – Kanye West’s infamous “George Bush doesn’t care about black people” rant disgusted the very same person he referred to. Former president George W. Bush said it was one of his “most disgusting” moments in his term as the country’s leader.

In an interview with Matt Lauer, Bush said he didn’t appreciate the hip-hop superstar calling him a racist during a segment for the Hurricane Katrina relief benefit concert in 2005.

He told the host on his “Matt Lauer Reports” special on NBC, via EW.com, “He called me a racist. And I didn’t appreciate it then. I don’t appreciate it now. It’s one thing to say, ‘I don’t appreciate the way he’s handled his business. It’s another thing to say, ‘This man’s a racist.” I resent it, it’s not true.”

Lauer also quoted lines from Bush’s new book “Decision Points,” which read: “Five years later I can barely write those words without feeling disgust. You go on: ‘ I faced a lot of criticism as president. I didn’t like hearing people claim that I lied about Iraq’s weapons of mass destruction or cut taxes to benefit the rich. But the suggestion that I was racist because of the response to Katrina represented an all-time low.’”

Bush admitted that that was the worst moment of his presidency.

Lauer pointed out that people might give him heat for mentioning that particular moment in the book, but Bush replied, “Don’t care.”

He said that while the devastating situation in Louisiana affected him deeply, Kanye’s words were different because it was a “disgusting moment, pure and simple.”

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Los Angeles, CA, United States (AHN) – Los Angeles Dodgers manager Joe Torre has reportedly decided to step down from his post after the season, the team reported in a statement Friday.

A press conference is scheduled for 5p PT, and former Yankee great/Dodgers bench coach Don Mattingly will be named his replacement.

“It has been an incredible honor to wear the Dodger uniform and I will always carry with me some very special memories from the past three seasons,” Torre said in the Dodgers’ statement. “This was not a decision I took lightly but I believe it’s the right one for myself and my family and I’m truly thrilled that Donnie will be the one leading the Dodgers. It’s time that the Dodgers had a new voice and I have the utmost confidence in him. I know he’s ready for the challenge.”

Torre was ready to take over the Dodgers after falling out of favor in New York for the Yankees poor postseason showings in his latter years as skipper.

He enjoyed a remarkable run in New York, however, leading the Yankees to World Series titles in four of his first five years there.

Torre was unable to replicate his success in Hollywood, as the Dodgers won a pair of NL West titles but were knocked off by the Phillies twice in the NLCS.

This season, the team is in disarray due to mediocre play and the McCourt’s ownership/divorce drama being played out in court and in public.

Torre, 70, has reportedly been offered a position with the club, but is unlikely to accept to keep his options open and perhaps manage again.

Dodgers GM Ned Colletti had praise for both Torre and Mattingly in the team statement.

Ned Colletti said this of Mattingly and Torre:

“Over the past three years, I’ve had the opportunity to work with Don closely and have gotten to know him both personally and professionally and I’m convinced that he’s the right person to lead the Dodgers. His work ethic is unparalleled, his baseball knowledge is vast and his leadership skills have been established during more than three decades in professional baseball.

“Donnie has also learned alongside the best in the business. Joe Torre has been a great friend, a strong leader and an incredible presence for this organization and I cannot thank him enough for his service to the Dodgers. I respect his decision to step aside and I look forward to the day where I can watch him take his rightful place in Cooperstown among baseball’s legends.”

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Today many traders buy commodity trading systems and spent money on expensive software when really all they need is to do a bit of research on the net and build their own.

Here we will show you how to build your own commodity trading system that will help you pile up big gains, even if you have never traded before.

First things first!

Let’s look at the logic the commodity trading system is based on:

1. Catching the big long term trends and these only come a few times a year. These are the ones to focus on not short term moves or day trading, this system is geared for profit not low odds trades in short term market noise.

2. This commodity trading system does not predict, it only acts on confirmation of the tend.

3. The system is simple. Traders think that the more complicated a system the better it is likely to perform, the exact opposite is however true.

4. This system uses the same trading methodology for ALL markets and is based on a psychological flaw most traders have and lose.

5. As this system is based on long term trends it should take no more than 30 minutes a day and will work off the closing price ONLY.

Putting it together

This commodity trading system is technically based, so let’s look at what we Need the package to contain. All we want is weekly and daily charts and two basic indictors Bollinger bands and stochastics.

A good package on the web is available at futuresource.com, but there are many others, don’t buy one! You don’t need to.

Trading rules

Trading rules are simple:

1. Look for important valid (several tests over long time span) resistance and support on the weekly chart and note the trend, then look for the same pattern on the daily charts.

2. Once you have found a market that fits the above criteria look for breaks of support or resistance. Don’try and predict wait for the move to get underway i.e you have confirmation (via the stochastic indicator) this is when the odds of the trend continuing are highest.

3. Check the stochastic indicator supports the move this VERY important.

4. Enter with at the money or in the money. Do not buy out eh money options and remember keep time on your side.

5. Don’t move stops to soon, get stop in below breakout point and move immediately to entry if the position moves your way. Wait for larger profits and cover the position with covered write position.

That’s it; If you are not familiar with all the terms check our other articles.

Why will this commodity system work?

It’s based on sound logic, breakouts are easy to understand and trade, most traders wait for market pullbacks and miss the major moves. This system gets you in on ALL the major moves and confirms strength before buying, to get the odds on your side.

Keep this fact in mind Most major trends develop from market highs, that means you have to trade breakouts.

Most traders get stopped out by volatility, but this system assumes the trend will continue rather than reverse as it’s already in motion, so stops are kept wide. When the profit becomes big you can put in an insurance policy, in the form of a covered write option strategy.

Finally, options can be used but unlike the losing majority you won’t buy out the money options with little chance of success. You will keep time on your side and buy in at or near the money.

The other advantage of this system is it costs nothing and is easy to understand.

This means when you practice it, you will have confidence and be able to trade with Discipline, which is a key to trading success with a commodity trading system.

Don’t listen to traders who try and tell you trading commodity systems needs to be complicated, it does not. A simple commodity trading system like the above, traded with discipline is all you need.

To rescue US economy, FOMC has cut interest rate from 6% to 0.25%, not much ammunition left. Japan which is the world’s 2nd biggest economy has suffered due to its strong yen. Even strong and stable Toyota has reported loss. China and Asia which have relied on US for most of their exports have started to show signs of weakness.

I say with confidence that 2009 will be a bad year for businesses, employees and global economy. We will see more cost cutting by firm in the form of retrenchments.

When people lose their jobs, they will spend conservatively. Some people may even have to sell stocks and property in order to raise cash for their daily expenses. Do you believe that in this kind of environment stock investments will do well?

Have you learned anything in 2009? If you have not, then learn that stock investment does not do well in all economy environment.

I think the current business cycle is moving downwards from the peak and we are still far from the bottom. I perceived that stock market is going to test its low and move down even much more in 2009.

I have since switched from stock investment to forex and commodity trading at the start of 2008. Here are some of my commodity trades.


14 trades were executed: 10 wins, 3 losses, 1 breakeven

Here are the trades on commodities from 1 Dec to 24 Dec:

1. On 23 Dec I closed my position at 10.41, profit is 28 ticks (US$280).

Original trade:
Shorted 1000 spot silver at 10.69
Stop level at 10.90
Target level at 10.08

2. On 23 Dec I closed my position at 39.33, profit is 33 ticks (US$66)

Original trade:
Shorted 2 lot supermini oil at 39.66
Stop level at 40.50
Target level at 38.72

3. On 19 Dec target level reached for silver. Close position at 11.12, 14 ticks profit (US$140).

Original trade:
Shorted 1000 spot silver at 10.91
Stop level at 11.12
Target level at 11.12

4. On 19 Dec I close my position at 10.97, profit is 10 ticks, US$99.65.

Original trade:
Shorted 1000 spot silver at 11.07
Stop level at 11.30
Target level at 10.87

5. On 17 Dec I close spot silver position at 11.44, profit is 25 ticks, US$250.

Original trade:
Bought 1000 spot silver at 11.19
Stop level at 10.79
Target level at 11.61

6. On 17 Dec target reached for silver. Profit is 49 ticks.

Original trade details:
Bought 1000 spot silver at 10.68
Stop level at 10.40
Target level at 11.17
Closed at 11.17 (Profit is 49 ticks, US$490)

7. On 16 Dec profit stop at 45.81 is triggered. Profit is 40 pips.

Original trade:
Bought 1 lot of supermini Oil at 45.41
Stop level at 43.70
Target level at 47.00

8. On 16 Dec oil trade triggered stop at 44.00. Loss is US$74.

Original trade:
I bought 1 lot of supermini Oil again at 45.41
Stop level at 43.70
Target level at 47.00

9. On 16 Dec oil trade stop triggered at breakeven

Original trade:
Open Long: 1 lot supermini Oil @ 44.67
Stop level: 44.67 (Shifted to breakeven)
Target level: 46.92

10. On 12 Dec gold trade triggered stop.

Original trade:
Open Long: 100 Spot Gold at 833.43
Stop level at 819.00
Target level at 846.38

11. On 10 Dec target level reached for oil

Original trade:
Open short: 1 Supermini Oil @ 44.25
Stop level: 45.00Target level: 43.13
Close at 43.13, profit is 112 ticks (US$112)

12. On 9 Dec cut loss on oil trade

Original trade:
Open Long: 1 supermini Oil @ 44.27
Stop level: 42.00
Target level: 46.80
Closed: 43.42 (Loss is US$32.00)

13. On 8 Dec took profit on gold

Original trade:
Open Long: 100 Spot Gold @ 770.25
Stop level: 739
Target level: 799.50Closed: 774.38 (Profit is US$413.00)

14. On 5 Dec target level reached for oil

Original trade:
Open Short: 1 lot Supermini Oil @ 45.56
Stop level: 48.10Target level: 42.83
Closed: 42.83 (Profit is US$273)

If you are interested to generate alternative income by tapping on BL TS system, send an email to me at metal.commodity@gmail.com.

To open a commodity trading account, click here to open.

Risk Disclosure:
Commodity trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to participate in the futures trading markets. Don’t trade with money you can’t afford to lose. This website is neither a solicitation to invest nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.

Commodity trading online has become much more of an interesting business endeavor with real time commodity quotes and live charting services now offered by a number of Internet based commodity futures brokers.

Internet technology has made the type of commodity trading services previously reserved for the deep pockets professional trader available to even small traders who have limited amounts of risk capital to trade. However, whenever you trade commodities the risk of sudden adverse price movements are still present, so even with great trading software, charts, and other facilities a trader should always protect his capital by using stop loss orders.

As always, great trading platforms or not commodities should only be traded with true risk capital. By that I mean funds that if lost would not impact your standard of living at all. No one likes to lose money but if you lose risk capital your life would go on without missing a beat. If you disregard this advice and risk your mortgage payment money you will almost certainly lose.

Commodity trading online makes the collection of commodity information, up to date prices, weather forecasts, USDA and CBOT reports, and commodity charts so much more convenience to access compared to old before the Internet trading days. However, greater convenience doesn’t mean that it is easy to become a successful commodity trader. Commodity trading requires skill sets and discipline that some people just don’t have.

One good thing about online commodity trading is that most online commodity brokers offer demo trading accounts that will let you try out their trading platforms without risking real money. While trading a demo account is not the same as trading your own funds, believe me, the emotional factors are different, you can still get a good feel for what is required in order to be successful and if online commodity trading is for you.

There are so many commodities that you can trade it is easy to at first become confused as each commodity futures contract is a bit different. In getting started it is best to limit yourself to just one or two futures contracts.

There are contracts in the precious metals, like gold, silver, and platinum.

Then you have contracts in the base metals like copper, aluminum, nickel, zinc, and tin.

Don’t forget the “soft” commodities like sugar, cocoa, and coffee.

The grains have a lot of action these days and are subject to weather influences. Record prices were hit this year in corn, soybeans, rice, and wheat.

Then the big daddy of them all would be crude oil and the entire energy complex including natural gas and heating oil. With crude oil in a tremendous bull market and trading above $130 a barrel new trading price records seem to be made every few days. There is plenty of excitement, profit potential, and risk in the energy complex.

Commodity trading online can be a fantastic business for the well informed trader who takes the time to develop the necessary skill sets to trade well consistency. Commodity trading is not for the lazy who rely on luck for trading profits. Chances are their money will not last long in the extremely competitive trading environment offered by the commodity markets.

If you have an interest in online commodity trading you can run a Google search for “commodity trading online” and find a number of commodity resources. To find online brokers run a Google search for “online commodity brokers” and you will find plenty of firms to research.

In researching online commodity brokers make sure that they are members of the NFA and are registered with the CFTC. By dealing with firms who are NFA members and registered with the CFTC you will have some measure of protection as to how your funds are handled and as to the accuracy and fulfillment of your orders.

With most online commodity trading brokerage firms just a few mouse clicks will provide you with a world of useful information that will assist you in making better trading decisions.

So many times I hear clients when in a draw down say,”There are changes going on in commodity trading and trend following.” The commodity markets are changing. They are not like what they used to be. Trend following is dead. This draw down proves trend following is dead.

Well I will give you my 15 years plus of experience and counter these thoughts. First of all, nothing ever changes. You need to really know what trend following is, what causes it. Not trying to be funny, but commodity trading has been going on since the times of Joseph in Egypt selling wheat. If you read your bible, he cornered the wheat market and there was a trend in wheat. The price went up. There will always be shortages, panics, fears and hedgers and for this reason there will be trends. One can look back at charts from the 1800s and look at wheat or even cotton. What do you think happened to the price of cotton during the US civil war. Do you I need to remind you what happened to crude in the first gulf war. Human nature never changes…fear and greed don’t ever seem to change…so there are trends. If you want to consider making money in commodities one of the ways I feel most strongly about is trend following. No predicting…just reacting and trying to catch a trend or as a surfer tries to catch a wave. Not too much different.

Now if you believe there are trends, then you need to realize they do not happen when we want them. There can be years at a time…NOTHING HAPPENS. At this point most non professional investors give up and claim trend following is dead and commodity trading advisors stink. Well, so many times after this trend following comes back from the dead and commodity trading advisors hit new record trading peaks. This brings me back to my holy grail word “PATIENCE”. If you can be patient, disciplined, have a sound trading methodology based on risk management and money management, you stand the potential overtime to grind out some decent returns.

Next thought… again those same inexperienced commodity traders say, “The commodity markets are changing. I need to change my system or my methodology.” Again with years of experience watching what has the chance to work and seeing all that did not. The only things that can work over time are simple ideas based on with strong risk and money management.

To give you example, Richard Donchian used a very simple idea. Buy the 22 day high…sell the 14 day low. This is the basis… not too complicated, but needs more risk and money management filters. Not sure if it was John Henry from JWH or Dunn Capital…either of them stated all rules of our system can be written on the back of an envelope. Pretty funny since both at them at various points of their careers were managing in excess of $1 Billion US Dollars. If you want to be a winner in the commodity trading arena realize this takes time, discipline and patience. This is not a get rich quick. This is a compound your way to wealth if you follow the rules of risk management & money management. All of this is easy to say, but when you are down either in your trading account or when your commodity trading advisor is down 20% or greater and you want to quit, Remember: Do you want to be a winner or a loser.

Understand exactly how your mechanical trading system works. Don’t think you will buy a black box and make money. Ask questions to your commodity trading advisor… what gets you in a trade..out of a trade… with a loss or a profit.. How much risk per trade.. how much risk per sector… how much portfolio open trade risk…or margin to equity. If you do not do your homework ahead of time, don’t even think about commodity trading. These are the hard truths about commodity trading. This is not easy. Futures and commodity trading involve substantial risk. People can and do lose money trading.

Author: Andrew Abraham
Article Source: EzineArticles.com
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