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Commodities Trading By www.ProfitableTradingTips.com

Commodities Trading

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http://profitabletradingtips.com/trading-investing/commodities-trading Commodities Trading As currencies fall in value commodities appear to rise. In fact, commodities such as gold, oil, and agriculture products simply retain their value in the face of inflation and currency devaluation. Those engaged in commodities trading know that fact. Traders engaged in commodities trading also know that supply and demand, the fundamentals, are basic to commodity prices. Those who wish to profit from commodities trading learn technical analysis. This is the analysis of past price movement with the purpose of predicting future price movement. One trades commodities in a futures market. Traders enter into contracts to buy or sell specified quantities of a given commodity on a specified future date. To profit from commodities trading one needs a firm grasp of the fundamentals that determine pricing and a clear sense of how the market reacts to changes in information. Commodity Futures Futures are standardized contracts between two parties to buy or sell a specific, standardized, amount of virtually anything. The price is agreed upon at the time of the contract and holds until the date of delivery. Most futures traders do not actually sell or buy commodities as they simply exit the contract by making the opposite trade prior to the delivery date. Although the price set in the futures contract for corn, beef, oil, gold, or other commodities is set the value of the contract varies and that is where the profit lies in commodities trading. In today’s world online commodities trading is common. Traders follow the news pertinent to the value of gold, cattle, or wheat. They follow pricing patterns in order to understand evolving market sentiment. Depending on the perceived changes in supply and demand the value of a commodity futures contract will rise or fall. In commodities trading one can buy or sell a contract for crude oil that is not deliverable for a decade but still make profits today. The trader simply seeks to enter and exit the trade at the most profitable times. Many traders use options in commodity trading. In doing so, they limit their risk and often leverage their investment capital. Futures Markets The following is a list of United States Futures exchanges: CBOE Futures Exchange (CFE) Chicago Mercantile Exchange (CME) Chicago Board of Trade (CBOT) Chicago Climate Exchange (CCE) ELX Futures (Electronic Liquidity Exchange) ICE Futures U.S. Kansas City Board of Trade (KCBT) Minneapolis Grain Exchange (MGEX) Nadex (formerly HedgeStreet) NASDAQ OMX Futures Exchange (NFX) New York Mercantile Exchange (NYMEX) and (COMEX) NYSE Liffe US OneChicago, LLC (Single-stock futures (SSF’s) and Futures on ETFs) The CME group owns CME, CBOT, NYMEX, and COMEX. Predicting the Future Will there be a drought in Eurasia, Brazil, or North America? These are the world bread baskets f

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Page 1: Commodities Trading

Commodities TradingBy

www.ProfitableTradingTips.com

Page 2: Commodities Trading

As currencies fall in value commodities appear to

rise. www.ProfitableTradingTips.com

Page 3: Commodities Trading

In fact, commodities such as gold, oil, and

agriculture products simply retain their value

in the face of inflation and currency devaluation. www.ProfitableTradingTips.com

Page 4: Commodities Trading

Those engaged in commodities trading

know that fact. www.ProfitableTradingTips.com

Page 5: Commodities Trading

Traders engaged in commodities trading also

know that supply and demand, the

fundamentals, are basic to commodity prices.www.ProfitableTradingTips.com

Page 6: Commodities Trading

Those who wish to profit from commodities trading

learn technical analysis. www.ProfitableTradingTips.com

Page 7: Commodities Trading

This is the analysis of past price movement with the purpose of predicting

future price movement. www.ProfitableTradingTips.com

Page 8: Commodities Trading

One trades commodities in a futures market.

www.ProfitableTradingTips.com

Page 9: Commodities Trading

Traders enter into contracts to buy or sell

specified quantities of a given commodity on a specified future date. www.ProfitableTradingTips.com

Page 10: Commodities Trading

To profit from commodities trading one needs a firm grasp of the

fundamentals that determine pricing

www.ProfitableTradingTips.com

Page 11: Commodities Trading

and a clear sense of how the market reacts to

changes in information.

www.ProfitableTradingTips.com

Page 12: Commodities Trading

Commodity Futures

www.ProfitableTradingTips.com

Page 13: Commodities Trading

Futures are standardized contracts between two parties to buy or sell a specific, standardized,

amount of virtually anything.

www.ProfitableTradingTips.com

Page 14: Commodities Trading

The price is agreed upon at the time of the contract and holds until the date of

delivery.www.ProfitableTradingTips.com

Page 15: Commodities Trading

Most futures traders do not actually sell or buy

commodities as they simply exit the contract

www.ProfitableTradingTips.com

Page 16: Commodities Trading

by making the opposite trade prior to the delivery

date.www.ProfitableTradingTips.com

Page 17: Commodities Trading

Although the price set in the futures contract for corn, beef, oil, gold, or

other commodities is set www.ProfitableTradingTips.com

Page 18: Commodities Trading

the value of the contract varies and that is where

the profit lies in commodities trading. www.ProfitableTradingTips.com

Page 20: Commodities Trading

Traders follow the news pertinent to the value of

gold, cattle, or wheat. www.ProfitableTradingTips.com

Page 21: Commodities Trading

They follow pricing patterns in order to

understand evolving market sentiment.

www.ProfitableTradingTips.com

Page 22: Commodities Trading

Depending on the perceived changes in

supply and demand the value of a commodity

futures contract will rise or fall.

www.ProfitableTradingTips.com

Page 23: Commodities Trading

In commodities trading one can buy or sell a

contract for crude oil that is not deliverable for a decade but still make

profits today. www.ProfitableTradingTips.com

Page 24: Commodities Trading

The trader simply seeks to enter and exit the trade

at the most profitable times.

www.ProfitableTradingTips.com

Page 25: Commodities Trading

Many traders use options in commodity trading.

www.ProfitableTradingTips.com

Page 26: Commodities Trading

In doing so, they limit their risk and often

leverage their investment capital.

www.ProfitableTradingTips.com

Page 27: Commodities Trading

Futures Markets

www.ProfitableTradingTips.com

Page 28: Commodities Trading

The following is a list of United States Futures

exchanges:

www.ProfitableTradingTips.com

Page 29: Commodities Trading

CBOE Futures Exchange (CFE)Chicago Mercantile Exchange (CME)

Chicago Board of Trade (CBOT)Chicago Climate Exchange (CCE)

ELX Futures (Electronic Liquidity Exchange)ICE Futures U.S.

Kansas City Board of Trade (KCBT)Minneapolis Grain Exchange (MGEX)

Nadex (formerly HedgeStreet)NASDAQ OMX Futures Exchange (NFX)

New York Mercantile Exchange (NYMEX) and (COMEX)NYSE Liffe US

OneChicago, LLC (Single-stock futures (SSF's) and Futures on ETFs)

www.ProfitableTradingTips.com

Page 30: Commodities Trading

The CME group owns CME, CBOT, NYMEX, and

COMEX.

www.ProfitableTradingTips.com

Page 31: Commodities Trading

Predicting the Future

www.ProfitableTradingTips.com

Page 32: Commodities Trading

Will there be a drought in Eurasia, Brazil, or North

America? www.ProfitableTradingTips.com

Page 33: Commodities Trading

These are the world bread baskets for wheat, corn,

and soybeans. www.ProfitableTradingTips.com

Page 34: Commodities Trading

Will overly strong monsoon rains or a

persistent drought affect the rice harvests in

Southern Asia? www.ProfitableTradingTips.com

Page 35: Commodities Trading

Commodities trading in these foodstuffs requires a clear sense of what will

affect supply and demand.

www.ProfitableTradingTips.com

Page 36: Commodities Trading

Gold goes up when currencies falter or war

threatenswww.ProfitableTradingTips.com

Page 37: Commodities Trading

and oil goes up when there is unrest in the

Middle East or a hurricane approaching

the Gulf of Mexico. www.ProfitableTradingTips.com

Page 38: Commodities Trading

In commodities trading, traders keep an eye on the facts and the other

eye on how the market is reacting.

www.ProfitableTradingTips.com

Page 39: Commodities Trading

Timing the market as a day trader in commodities trading is also important, especially

important news breaks.www.ProfitableTradingTips.com