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Commodity Price Breakout
In order to accurately anticipate a commodity price breakout, traders need to routinely do both fundamental and technical analysis. Of the two types of analysis, technical analysis is typically more important than fundamental analysis for predicting sharp turns in the market. When the fundamentals of a commodity change anyone who was able to correctly anticipate the commodity price and traded according will have profited. However, fundamental changes in commodities are often something that traders read about and not what most will typically predict. When the commodity price breakout has happened it is up to the day trader to effectively trade commodities market changes via trading signals. It is wise for the trader new to commodities trading to learn the basics through Commodities and Futures Trading before engaging in live commodity trading. For those interested in options trading on the commodities markets Options Training with Stephen Bigelow is a wise choice.
A commodity price breakout can be either up or down form an established trend. A large number of factors can cause a dramatic shift in commodities prices. Oil futures are obviously subject to different factors than are corn futures, or gold futures. What is important is for the trader to know and understand the commodity being traded. Economic factors can drastically change the commodity futures prices of oil and gold whereas weather conditions can strongly affect the price of corn futures. Fundamental commodity analysis will alert the trader to when a commodity may be ready for a commodity price breakout. However, it is through the use of technical analysis tools such as Candlestick pattern formations and Candlestick trading tactics that the trader may be able to anticipate the day, hour, or minute, as opposed to the month or year, that a commodity price breakout will occur.