3. This market is an auction market
in which participants buy and
sell commodities and/or futures
contracts. They buy and sell on a
specified upcoming date.
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4. In other words this market
requires a financial contract that
obligates a buyer to purchase an
asset and a seller to sell an asset at
as a financial instrument or
physical commodity at a
predetermined upcoming date
and price.
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5. Some contacts may call for the
physical delivery of the asset,
while other contracts are settled
in cash. In fact, the likelihood of
physical delivery of
a commodity is extremely low.
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6. In this market an investor can
hedge or speculate on the price
movement of the underlying
asset. For instance, hedging is to
make an investment to reduce the
risk of adverse price movements
in an asset.
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7. An example is to own stock
and then sell a contract stating
that you will sell your stock at
a set price. You then are able
to avoid market fluctuations.
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8. This type of contract is
standardized and the upcoming
date of delivery is called the
delivery date or the final
settlement date. The official price
of the contract at the end of the
day’s trading session on the
exchange is called the settlement
price for that day of business.
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9. This type of contract gives the
holder the obligation to make or
take delivery under the terms of
the contract, whereas options
trading, grants the buyer the
right, but not the obligation to
establish a position previously
held by the seller of the option.
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10. For example, if you were long in a
contract, you could go short the
same type of contract to offset
your position. This would serve as
your exit position just like selling
a stock in the equity markets
would close a trade.
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11. The owner of an options
contract may exercise the
contract, but both parties of a
futures contract must fulfill
the contract on the settlement
date.
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12. As stated previously, the seller
delivers the underlying asset to
the buyer, or if it is a cash-settled
contract, the cash is transferred
from the future trader who
sustained a loss to the one who
made the profit.
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13. In order to exit the commitment
prior to the settlement date, the
holder of the position must offset
their position by either selling a
long position or buying back
(covering) a short position, thus
effectively closing out the position
and contract obligations.
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14. There is a lot more to this market
and every investor should do their
homework before trading
commodities. Continue to
research and find a trading
strategy that works for you.
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16. The holidays usually do not
provide a major direction for the
markets. Most traders are gone.
The simple techniques provided
by candlestick signals reveal the
same information in lethargic
markets as they do in active
markets.
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17. The holidays usually do not
provide a major direction for the
markets. Most traders are gone.
The simple techniques provided
by candlestick signals reveal the
same information in lethargic
markets as they do in active
markets.
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18. However, 2008 was a relatively
profitable year. Although there
were times when the markets
were not moving, when the
markets did move, some huge
profits were made. This is why it
is important to let the markets tell
you what the markets are doing.
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21. There were numerous periods
where the Dow just went
sideways, making it difficult to
make money either long or short.
Unlike the trends we saw in late
2006 going into 2007. Being able
to analyze the market trends
allowed for exploiting profits by
being positioned correctly
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24. One of the main functions of
candlestick analysis is to discover
what patterns are occurring. This
becomes extremely important in
how to trade the market. The
power of candlestick signals is
incorporated in the ability to
analyze what investor sentiment
is producing.
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25. There will be some big profits to
be made in 2009. Where are they
going to be? That we do not
know! But taking advantage of the
information that is built into
candlestick signals will allow us to
place funds in the markets at the
right places at the right times.
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