Interesting Trading Information About Profitable Commodities Trading
Time is the most important factor in determining market movements. By the studying of past price records and charts you will be able to prove to yourself history does repeat and by knowing the past you can tell the future. There is a definite relation between price and time. By studying time cycles and time periods you will learn why market tops and bottoms are found at certain times, and why resistance levels are so strong at certain times, and prices hold around them. The most money is made when fast moves and extreme fluctuations occur at the end of major time-cycles. ~ William D. Gann
For those of you that trade the futures markets, there are a lot of other things outside the future markets that you should be following. But, I guess my bigger message is for those of you that aren’t in the futures markets, whether you trade them or not, the futures markets have a tremendous impact on what happens in the other markets. That’s why you should soak up every piece of good trading knowledge like a sponge in a quest to clearly see the bigger picture.
I can say with amazing accuracy that any commodity market will have a reaction with a contrary move up or down in the opposite trend direction (or by stopping an existing uptrend or downtrend) upon the commodity prices hitting correctly drawn and relevant geometric angles which have been pre-drawn on a properly formatted long-range bar-chart. ~ David Green
Buying Higher Swing Lows and Selling Lower Swing Highs I believe is the best way to identify commodity futures trading market direction and define a bullishly or bearishly structured market. It's based on the observation by looking at a price bar-chart of any market (commodity futures, forex or stocks) you should be able to fairly easily observe that a bear market trend mostly consists of a series of lower-highs whereas a bull market trend mostly consists of a series of higher-lows. A swing-low is defined as a low day (or bar) with higher prices both in front and behind the low day (or bar), thus forming a swing-low. This swing-low must also be above the previous swing-low, thus forming a higher swing-low. A swing-high is defined as a high day (or bar) with lower prices both in front and behind the high day bar, thus forming a swing-high. This swing-high must also be under the prior swing-high, thus forming a lower swing-high. ~ David Green
How a Commodity Futures Trading System can Help Traders
A commodity trading system provides a defined structure that is adopted by traders. The systems generate instructions that are derived from predetermined rules. It is important to test and research the trading system you use in the trade. The systems are able to specify capitalization levels and this is based on suggested performance, equity-drawdowns and potential risks identified. The trading system also determines the right time to execute an order and the time to exit a position.
One challenge with discretionary or manual trading without a system is the trader rarely trades with a plan. The trader follows the “hot” market-trends and spends many hours analyzing the market. There is a tendency to over-study a single market using a nion-system trading method.
However, a good trading system has a predetermined methodology. The trading-system also has the capability to trade multiple markets and sectors thus widening your scope of executing orders. In addition, less time is spent by the trdaingsystem analyzing the financial markets and planning for the next trading day. Non-system based trading can lead to more erratic trading results that can cause more losses.
A commodity trading system eliminates the stress you have to go through when studying the market, and wondering when is the right time to execute an order and exit a position. The commodity trading is very entailing and it can occupy someone’s time to an extent that only a little time is spend in the actual trading. In addition, erroneous executions of orders can result to untimely losses.
By trading a commodity trading system, traders are able to save the time they take in trading. In addition, markets can evaporate sharply and unexpectedly for some reason that you do not understand. What this means is that you can easily find yourself on the wrong side of the market trends and this may result to loss of money or be placed in a situation where you cannot make a decision.
There are traders who trade smartly for a long time and with only one adverse move, they lose all the profits they have gathered for a long period. These mistakes can easily occur when you are trading manually. This does not means that systems do not get into the wrong side. Often, a trdaing system will also lose in their positions. However, when you analyze the losing trades recorded by the time-tested and proven trading systems, you may find they are less than the winning trades.
The end result is you will most likely gain in a specific time when you are using a good trading-system. In addition, the software programs are created with a lot of intelligence in market analysis and risk mitigation in commodity futures trading and therefore try to minimize the risk of loss and avoid high equity drawdown. However, that does not necessarily imply they stop losses. They will still get into losses and risky trades and this is where you find your system records losses. One important aspect you need to understand is you should follow the rules of the trading-system closely.