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Commodity Pattern Analysis
In order to succeed in commodity trading traders learn both fundamental and technical analysis. Fundamental commodity analysis tells the trader about long term price trends and commodity supply and demand. Commodity fundamentals change with time taking the commodity price with them. As prices change over time they move in patterns. It is commodity pattern analysis that is the basis of technical analysis in commodity trading. Commodity pattern analysis goes back centuries to the recognition of Candlestick patterns. These are price movement patterns that predict subsequent price changes. Traders reading Candlestick pattern formations can anticipate and profit from price movement in commodity futures trading. A new trader taking Commodity and Futures training can learn both the basics of how commodities are traded and more advanced trading tactics. Candlestick patterns such as the bullish engulfing pattern give traders a heads up for market reversal while other patterns signal general market trends.
Commodity price patterns can be both long and short term. Agricultural commodities typically have an annual pattern based upon an annual harvest. Even though a commodity such as corn can be stored there is a cost to storage. Thus corn will be cheaper after the harvest and more expensive as the year progresses. This applies to corn futures as well when traders anticipate corn pricing and trade futures accordingly. Very long term patterns can also develop in agricultural commodities associated with the eleven year solar cycle with its effect upon weather patterns. Commodity pattern analysis over an eleven year term will note a rise and fall in prices associated with rain fall, production, and grain futures.