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Commodity Trends
In trading commodities traders follow trends, anticipate market reversal, and use technical analysis tools such as Candlestick chart patterns to trade successfully when a commodity establishes itself in trend or a trading range. Commodity trends vary with the type of commodity. Trends differ over short or long term. However, technical analysis with Candlestick charting will predict future market moves as successfully with corn futures or gold futures as it did in the rice market in Japan during the reign of the Samurai. Trading of commodity trends can be very successful so long as the trader uses both fundamental commodity analysis and technical analysis indicators to verify the probability of the trend lasting or reversing. Learning how to trade commodity trends and market reversal is part of commodity and futures training.
3. anticipate market reversal, and use
technical analysis tools such as
Candlestick chart patterns to trade
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4. successfully when a commodity
establishes itself in trend or a trading
range.
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5. Commodity trends vary with the type of
commodity. Trends differ over short or
long term.
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6. However, technical analysis with
Candlestick charting will predict future
market moves as successfully with corn
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7. futures or gold futures as it did in the
rice market in Japan during the reign of
the Samurai.
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8. Trading of commodity trends can be very
successful so long as the trader uses
both fundamental commodity analysis
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9. and technical analysis indicators to verify
the probability of the trend lasting or
reversing.
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10. Learning how to trade commodity
trends and market reversal is part of
commodity and futures training.
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11. Commodity prices and commodity
trends are based on the laws of supply
and demand.
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12. However, when the exact supply and the
exact demand are unknown the market
will speculate.
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13. Knowing the fundamentals of how a
commodity is produced and the depth
and breadth of its market is essential to
successful commodity trading.
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14. Knowing the fundamentals always helps
the trader reduce and manage
investment risk.
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15. However, to profit from trading futures
in commodities the trader will need to
be able to read the market.
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16. Trends tend to establish themselves
when the market is in consensus about
the prospects of a commodity price.
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17. When a recession hits traders in oil
futures will want to sell short on the way
down and will continue to do so as long
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18. as they believe that the price has not
reached a fundamental support level.
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19. Understanding support and resistance
zones is essential in successful trading of
commodity trends.
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20. With knowledgeable use of Candlestick
trading tactics a trader can do well
trading commodity trends or predicting
and profiting from breakouts.
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21. Long term trends are essentially an
organic part of a market.
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22. For example, the development of a new
seed variety may substantially increase
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23. corn production and cause a long term
decrease in the price of corn futures.
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24. On the other hand a drought in a major
crop growing area will probably only
raise prices for a year or until the next
rains.
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25. Knowing and understanding the nature
of trends will help the trader profit by
them.
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26. The longer term trends are typically due
to fundamentals.
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27. Short term trends in commodities or
other trading are typically due to market
sentiment.
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28. In reading market sentiment the trader
will rely on Candlestick analysis to let the
market tell him when the market will do.
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29. Everyone has the same fundamental
information but everyone buys or sells a
little differently.
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30. The psychology of the market is such
that commodity trends feed upon
themselves, almost to excess.
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31. Knowing when to stay with the trend
when to go against it comes with
experience and the use of tried and true
trading tools such as Candlestick basics.
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32. What worked for Japanese rice traders
centuries ago can work for traders today.
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