Best Commodities to Trade

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Best Commodities to Trade

The best commodities to trade will depend upon a variety of circumstances, always including market timing. Commodity groups include energy, food and fiber, grains, interest rates, meats, metals, and stock indices. In all of these commodities markets there are factors that determine whether commodity prices will rise or fall when trading commodity futures. For traders with a great deal of expertise in a given commodity the best commodities to trade may be the most variable as these will be where the most profit potential lies. For the new comer to commodity trading the best commodities to trade may be those with less market volatility and, therefore, less risk of substantial loss. As with all trading it is wise to learn the basics first. Commodity and futures training is a good place to start. Learning the use of Candlestick charting techniques will help the beginning, and seasoned, trader to profit by anticipating price movement in commodities.

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Best Commodities to Trade

  1. 1. Best Commodities to Trade By www.CandlestickForums.com
  2. 2. The best commodities to trade willdepend upon a variety of circumstances, always including market timing. www.CandlestickForums.com
  3. 3. Commodity groups include energy, food and fiber, grains, interest rates, meats, metals, and stock indices. www.CandlestickForums.com
  4. 4. In all of these commodities markets there are factors that determinewhether commodity prices will rise orfall when trading commodity futures. www.CandlestickForums.com
  5. 5. For traders with a great deal of expertise in a given commodity the best commodities to trade may be the mostvariable as these will be where the most profit potential lies. www.CandlestickForums.com
  6. 6. For the new comer to commoditytrading the best commodities to trademay be those with less market volatility and, therefore, less risk of substantial loss. www.CandlestickForums.com
  7. 7. As with all trading it is wise to learn the basics first. www.CandlestickForums.com
  8. 8. Commodity and futures training is a good place to start. www.CandlestickForums.com
  9. 9. Learning the use of Candlestick charting techniques will help the beginning, andseasoned, trader to profit by anticipating price movement in commodities. www.CandlestickForums.com
  10. 10. Often times commodity trading is trend trading. www.CandlestickForums.com
  11. 11. In the arena of traders there arefollowers of long term trends and short term trends. www.CandlestickForums.com
  12. 12. The longer the trend the more important it is to do fundamentalanalysis of the commodity involved. www.CandlestickForums.com
  13. 13. The shorter the trend the moreimportant it is to do technical analysis. www.CandlestickForums.com
  14. 14. In all commodities trading fundamentaland technical analysis have their places. www.CandlestickForums.com
  15. 15. For example, a trader who is expecting a long term rise in prices of corn futures will still want use tools such as Candlestick pattern formations www.CandlestickForums.com
  16. 16. to watch daily futures price movementin order to get the best purchase priceeven though he or she may be holding futures contracts for months or years. www.CandlestickForums.com
  17. 17. In trading commodities it is essential to know when large price movements usually occur. www.CandlestickForums.com
  18. 18. In trading agricultural commodities, such as live cattle commodity trading, a severe winter on the North American Great Plains may result in the deaths of many cattle. www.CandlestickForums.com
  19. 19. This will drive the price of beef up. www.CandlestickForums.com
  20. 20. An astute trader may see a weather mapof a severe storm passing over Nebraska and Iowa and anticipate a drop in June live cattle futures. www.CandlestickForums.com
  21. 21. Just as there is reason for diversifying astock portfolio there can be reasons to diversify when trading futures on commodities. www.CandlestickForums.com
  22. 22. Although the possible return oninvestment in just trading interest ratesor gold futures may be inviting, hedging in the form of trading a balanced portfolio of commodities may be safer and more profitable in the long run. www.CandlestickForums.com
  23. 23. Factors to consider when choosing the best commodities to trade are marketliquidity as well as fundamental trends. www.CandlestickForums.com
  24. 24. For interest rates and currencies thetrader will need insight into economics and politics as well as the banking systems of the countries involved. www.CandlestickForums.com
  25. 25. Trading oil futures, energy credits,natural gas futures and the like alsorequire a sense of the economy as a recession can decrease demand substantially. www.CandlestickForums.com
  26. 26. Trading precious metals futures also has a lot to do with the economy and monetary policy. www.CandlestickForums.com
  27. 27. Many who trade in gold believe that theUS and other nations will not be able to avoid inflation over time and, as such,habitually trade gold futures in the belief that the precious metal can only go up over time. www.CandlestickForums.com
  28. 28. A view of history will show that this is not the case as when gold prices plummeted in the 1980’s. www.CandlestickForums.com
  29. 29. In the end the best commodities totrade are the ones the trader knows the most about and is willing to followclosely enough to anticipate the market. www.CandlestickForums.com

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