Commodity Pattern Analysis

227 views

Published on

http://www.candlestickforums.com/

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.

Published in: News & Politics
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
227
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
6
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Commodity Pattern Analysis

  1. 1. Commodity Pattern Analysis By www.CandlestickForums.com
  2. 2. In order to succeed in commoditytrading traders learn both fundamental and technical analysis. www.CandlestickForums.com
  3. 3. Fundamental commodity analysis tellsthe trader about long term price trends and commodity supply and demand. www.CandlestickForums.com
  4. 4. Commodity fundamentals change withtime taking the commodity price with them. www.CandlestickForums.com
  5. 5. As prices change over time they move in patterns. www.CandlestickForums.com
  6. 6. It is commodity pattern analysis that is the basis of technical analysis in commodity trading. www.CandlestickForums.com
  7. 7. Commodity pattern analysis goes back centuries to the recognition of Candlestick patterns. www.CandlestickForums.com
  8. 8. These are price movement patterns that predict subsequent price changes. www.CandlestickForums.com
  9. 9. Traders reading Candlestick patternformations can anticipate and profitfrom price movement in commodity futures trading. www.CandlestickForums.com
  10. 10. A new trader taking Commodity and Futures training can learn both thebasics of how commodities are traded and more advanced trading tactics. www.CandlestickForums.com
  11. 11. Candlestick patterns such as the bullish engulfing pattern give traders a heads up for market reversal while otherpatterns signal general market trends. www.CandlestickForums.com
  12. 12. Commodity price patterns can be both long and short term. www.CandlestickForums.com
  13. 13. Agricultural commodities typically havean annual pattern based upon an annual harvest. www.CandlestickForums.com
  14. 14. Even though a commodity such as corncan be stored there is a cost to storage. Thus corn will be cheaper after theharvest and more expensive as the year progresses. www.CandlestickForums.com
  15. 15. This applies to corn futures as well whentraders anticipate corn pricing and trade futures accordingly. www.CandlestickForums.com
  16. 16. Very long term patterns can also develop in agricultural commodities associated with the eleven year solar cycle with its effect upon weather patterns. www.CandlestickForums.com
  17. 17. Commodity pattern analysis over aneleven year term will note a rise and fall in prices associated with rain fall, production, and grain futures. www.CandlestickForums.com
  18. 18. Commodity pattern analysis is mostpertinent to short term and day trading of commodity futures. www.CandlestickForums.com
  19. 19. Although all traders have access to the same information there will be variations in interpretation. www.CandlestickForums.com
  20. 20. Traders will interpret the fundamentals differently and they will interpret the actions of other traders differently. www.CandlestickForums.com
  21. 21. That is, their fundamental analysis and technical analysis will vary. www.CandlestickForums.com
  22. 22. There is no set commodity price butmoving commodity prices based upon the actions of thousands of traders. www.CandlestickForums.com
  23. 23. Using Candlestick analysis a trader is able to anticipate price movement inthis moving market with a high degree of reliability. www.CandlestickForums.com
  24. 24. By accurate price anticipation the traderusing Candlestick basics and Candlestick trading tactics can commonly makesuccessful trades in everything from gold futures to oil futures. www.CandlestickForums.com
  25. 25. Commodity pattern analysis is not just applied to trading futures in commodities but to options trading commodity futures as well. www.CandlestickForums.com
  26. 26. Buying calls on commodity futures gives the trader the right to buy a futures contract on or before the contractexpiration date and buying puts confersthe right to sell futures within the time frame of the contract. www.CandlestickForums.com
  27. 27. In neither case is there an obligation tobuy or sell. Thus the options trader pays a premium to gain the opportunity forprofit but limits his loss to the amount of the premium paid. www.CandlestickForums.com
  28. 28. On the other hand selling calls andselling puts confers the obligation to buy or sell. www.CandlestickForums.com
  29. 29. The trader in commodity futures options will also use tools like Candlestick chart formations to anticipate price movement and profit. www.CandlestickForums.com

×