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Trading Commodity Futures http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures We wrote recently about Winning with Commodities. What one trades are commodity futures. For example, when a trader expects the price of gold to rise he can buy gold bullion or shares in an exchange traded fund that tracks the price of gold bullion. And by trading commodity futures on gold bullion he can lock in a price to buy or sell gold at a later date. Trading commodity futures is a common practice by both the producers and buyers of commodities such as wheat, corn, soybeans or live cattle. They do this in order to hedge their risk in case of a price change. And speculators trading commodity futures buy and sell futures on the same commodities in search of profits. Basics of Commodity Trading The basics of any commodity have to do with supply and demand and how these affect current price. Gold futures go up when the economy weakens and down when the economy is strong. Gold bugs hoard gold as a hedge against inflation. In trading gold a trader bases his trades on both fundamentals and short term market sentiment. Traders jump in and out of the gold market based upon their analysis of prices. When there is a drought in the American Corn Belt, Brazil or Ukraine wheat, corn and soybean prices go up as traders expect a production shortfall. When there are ideal growing conditions in the major grain producing regions of the world the prices of corn, wheat and soybeans tend to fall as a market glut is expected. When there is another threat of war in the Middle East the price of oil rises. Those trading commodity futures on oil will expect to see higher prices in the short term but a return to normal in a year or so. The introduction of fracking technology has greatly increased oil and gas supplies in the USA and is expected to keep prices low and stable for years. Nevertheless, chaos in other oil producing regions of the world tends to drive prices in the short term. Traders buy and sell futures contracts on oil and other products based on their analysis of where the market will be in a few months or years. Short Term Market Sentiment Markets are never totally efficient in the short term. So, there is profit to be made in trading commodity futures when either good or bad news hits the markets for precious metals, energy products or agricultural products.
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http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
We wrote recently about Winning with Commodities. What one trades are commodity futures.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
For example, when a trader expects the price of gold to rise he can buy gold bullion or shares in an exchange traded fund that tracks the price of gold bullion.
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http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
And by trading commodity futures on gold bullion he can lock in a price to buy or sell gold at a later date.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Trading commodity futures is a common practice by both the producers and buyers of commodities such as wheat, corn, soybeans or live cattle.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
They do this in order to hedge their risk in case of a price change.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
And speculators trading commodity futures buy and sell futures on the same commodities in search of profits.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Basics of Commodity Trading
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
The basics of any commodity have to do with supply and demand and how these affect current price.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Gold futures go up when the economy weakens and down when the economy is strong.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Gold bugs hoard gold as a hedge against inflation.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
In trading gold a trader bases his trades on both fundamentals and short term market sentiment.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Traders jump in and out of the gold market based upon their analysis of prices.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
When there is a drought in the American Corn Belt, Brazil or Ukraine wheat, corn and soybean prices go up as traders expect a production shortfall.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
When there are ideal growing conditions in the major grain producing regions of the world the prices of corn, wheat and soybeans tend to fall as a market glut is expected.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
When there is another threat of war in the Middle East the price of oil rises.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Those trading commodity futures on oil will expect to see higher prices in the short term but a return to normal in a year or so
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
The introduction of fracking technology has greatly increased oil and gas supplies in the USA and is expected to keep prices low and stable for years.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Nevertheless, chaos in other oil producing regions of the world tends to drive prices in the short term
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Traders buy and sell futures contracts on oil and other products based on their analysis of where the market will be in a few months or years.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Short Term Market Sentiment
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Markets are never totally efficient in the short term.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
So, there is profit to be made in trading commodity futures when either good or bad news hits the markets for precious metals, energy products or agricultural products.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Although the fundamentals of any commodity are available to all traders the tactics used by each will differ.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Thus trading commodities is a daily, hour by hour, minute by minute job as the trader watches and searches for opportunities in his market.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Knowing the fundamentals of a commodity is essential to futures trading.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Skill in the use technical indicators and the ability to be there when changes happen leads to profits in trading commodity futures.
http://profitabletradingtips.com/profitable-trading-tips/trading-commodity-futures
Whether you prefer a heavily statistically based trading tool or something as basic and easy to read as Japanese Candlesticks you can take advantage of short term market sentiment in trading commodity futures.