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Hedging Commodities
By: www.CandleStickForums.com
There are records of traders hedging
commodities as early as 17th century
Holland and Japan (Tulips and Rice).
It was in 1848 that the Chicago Board
of Trade was founded. Centrally
located for United States agriculture
the commodities exchange became the
most important in the world for
hedging commodities.
By: www.CandleStickForums.com
The necessity for
trading commodity futures comes
from the uncertainties of crop and
livestock production. A drought
with a subsequent bad harvest or
loss of livestock can be devastating
for farmers and ranchers.
By: www.CandleStickForums.com
Thus many large operations and,
especially, cooperatives have
engaged in hedging commodities
for many years. Commodity and
futures training will show
beginning commodities
traders how profits are made
from trading commodities.
By: www.CandleStickForums.com
Commodities trading began with
producers and their buyers coming
together to create a stable market
for agricultural products.
Today commodity futures are still
largely the province of those
actively involved in agriculture.
By: www.CandleStickForums.com
However, trading in commodities
is not limited to growers and
processors of agricultural products.
Many who are trading
commodities online are able to
profit from the movements in the
grain and meat markets without
ever planting a row of corn or
butchering a steer.
By: www.CandleStickForums.com
Candlestick basics have worked in
Japanese rice trading for centuries
and Candlestick chart analysis is
useful today in trading everything
from rice to gold to environmental
credits.
By: www.CandleStickForums.com
Hedging commodities such as
cotton, corn, or soybeans protects
the producer against loss from
falling prices and protects buyers
from a rise in price. The producer
will sell futures in his or her crop
and the buyer will buy futures.
By: www.CandleStickForums.com
Both are protected against
substantial loss in case of a major
move in the market. However,
neither trader needs to hold his or
her position through until
expiration.
By: www.CandleStickForums.com
If the market takes an
advantageous turn the farmer can
buy back his futures for a profit
just as the eventual buyer can sell
futures to offset his position. In
this case both go back to having
normal market risk at the point of
sale at harvest.
By: www.CandleStickForums.com
In deciding whether to buy or sell
commodities traders rely
upon technical
analysis deriving technical
indicators from tools such
as Candlestick pattern formations.
By: www.CandleStickForums.com
Hedging commodities is no longer
limited to agricultural products.
There are commodities markets in
minerals such as gold and silver
and commodity investing in non
tangibles such as environmental
credits and interest rate futures.
By: www.CandleStickForums.com
To become a successful commodity
trader start by learning the
basics of Commodity and Futures
Trading, move on to simulation
trading, then fundamental
analysis of the market in question,
and finally beginning commodity
futures trading.
By: www.CandleStickForums.com
Hedging commodities is a
necessity for producers and
commodity processors. Hedging
commodities is an opportunity for
the trader. Technical analysis with
Candlesticks has worked for
traders for centuries and works
today.
By: www.CandleStickForums.com
These technical analysis tools allow
you to let the market tell you what
the market will do. As weather
conditions in Brazil changes so will
the commodity market in US
soybeans.
By: www.CandleStickForums.com
When the dollar goes up or down
gold will typically move in the
other direction. Knowing
fundamentals is important
but keeping abreast of market
moves and predicting the next
move with Candlestick trading can
improve your results.
By: www.CandleStickForums.com

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Hedging commodities

  • 2. There are records of traders hedging commodities as early as 17th century Holland and Japan (Tulips and Rice). It was in 1848 that the Chicago Board of Trade was founded. Centrally located for United States agriculture the commodities exchange became the most important in the world for hedging commodities. By: www.CandleStickForums.com
  • 3. The necessity for trading commodity futures comes from the uncertainties of crop and livestock production. A drought with a subsequent bad harvest or loss of livestock can be devastating for farmers and ranchers. By: www.CandleStickForums.com
  • 4. Thus many large operations and, especially, cooperatives have engaged in hedging commodities for many years. Commodity and futures training will show beginning commodities traders how profits are made from trading commodities. By: www.CandleStickForums.com
  • 5. Commodities trading began with producers and their buyers coming together to create a stable market for agricultural products. Today commodity futures are still largely the province of those actively involved in agriculture. By: www.CandleStickForums.com
  • 6. However, trading in commodities is not limited to growers and processors of agricultural products. Many who are trading commodities online are able to profit from the movements in the grain and meat markets without ever planting a row of corn or butchering a steer. By: www.CandleStickForums.com
  • 7. Candlestick basics have worked in Japanese rice trading for centuries and Candlestick chart analysis is useful today in trading everything from rice to gold to environmental credits. By: www.CandleStickForums.com
  • 8. Hedging commodities such as cotton, corn, or soybeans protects the producer against loss from falling prices and protects buyers from a rise in price. The producer will sell futures in his or her crop and the buyer will buy futures. By: www.CandleStickForums.com
  • 9. Both are protected against substantial loss in case of a major move in the market. However, neither trader needs to hold his or her position through until expiration. By: www.CandleStickForums.com
  • 10. If the market takes an advantageous turn the farmer can buy back his futures for a profit just as the eventual buyer can sell futures to offset his position. In this case both go back to having normal market risk at the point of sale at harvest. By: www.CandleStickForums.com
  • 11. In deciding whether to buy or sell commodities traders rely upon technical analysis deriving technical indicators from tools such as Candlestick pattern formations. By: www.CandleStickForums.com
  • 12. Hedging commodities is no longer limited to agricultural products. There are commodities markets in minerals such as gold and silver and commodity investing in non tangibles such as environmental credits and interest rate futures. By: www.CandleStickForums.com
  • 13. To become a successful commodity trader start by learning the basics of Commodity and Futures Trading, move on to simulation trading, then fundamental analysis of the market in question, and finally beginning commodity futures trading. By: www.CandleStickForums.com
  • 14. Hedging commodities is a necessity for producers and commodity processors. Hedging commodities is an opportunity for the trader. Technical analysis with Candlesticks has worked for traders for centuries and works today. By: www.CandleStickForums.com
  • 15. These technical analysis tools allow you to let the market tell you what the market will do. As weather conditions in Brazil changes so will the commodity market in US soybeans. By: www.CandleStickForums.com
  • 16. When the dollar goes up or down gold will typically move in the other direction. Knowing fundamentals is important but keeping abreast of market moves and predicting the next move with Candlestick trading can improve your results. By: www.CandleStickForums.com