Investment is a game of money of securing future money by taking a risk today. Trading therefore comes with a list of rules to play by. Commodity trading in particular offers tremendous potential for becoming a completely different asset class.
However, before investing in any kind of commodity, you must do an in depth research and also ask your broker as many questions as possible. Through this category archive we provide you as much information and valuable insights into the world of commodity trading.
We at Cannon Trading are here to help you with your commodity trading needs. You as a trader should select your commodity trading advisor only after performing a due diligence on him/her. We in fact do that for you. This way, you get only the best advice to help you with your commodity trading.
We’ve got the information that you might need at every step of commodity trading, and you’ll find it all right here in the commodity trading section of our blog. Read up, and read on to get equipped!
For 2013 I would like to wish all of you discipline and patience in your trading!
Today’s two sided volatility in crude oil futures fitted my trading model/philosophy well.
Below is a screen shot from today along with the different signals.
If you like a free trial to this ALGO along with the PDF document I created, which explains the set ups ( AND have not had the trial before…) then follow instructions below the chart.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.
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This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading
So you’ve come this far. You’ve evaluated different vehicles of investment, and you have decided to expand your portfolio to include commodity futures. Now what? You are going to need a few tools at your disposal: a knowledgeable commodity broker that is quick on their feet, a reliable, efficient platform that will get you the information you require and executes your trades on a timely basis, and perhaps most importantly a plan.
Let’s begin with the most important requirement: because futures are so highly, there’s no doubt it can be a very risky asset class and you should only be trading with “risk capital”, or money that you can stand to lose and won’t affect your lifestyle if you do. Once you’ve accumulated your risk capital and you’ve come to terms with the nature of trading futures, you can take matters a step further by doing research on what kind of trader you want to be.
Futures trading can be a rewarding investment for those with an in-depth understanding of a particular commodity. In essence, you will be buying or selling a commodity based on its future selling price. For example, if you can buy a futures contract at a low rate and sell it for a higher price, it’s possible to gain a significant profit in the transaction. But before wading into this highly speculative market, there are some things you will need to do and know about trading futures markets.
First, you will need to enter an agreement and create an account with a commodities broker. These brokers are licensed professionals who are allowed to trade in commodities on the trading floor of an exchange. Accordingly, they manage and mediate futures trading between buyers and sellers as well as keep track of the prices of futures contracts. Because of their knowledge of the market, they can help you make sound investments and recommend an investment strategy that suits your profile.
One Way to Eliminate Fear and Greed While Day Trading
Disclaimer
The methods described in this article are for educational purposes only. Past results are not necessarily indicative of future results. The author and the publisher assume no responsibility for your trading results. Trading involves a high degree of risk. No recommendation is being made to buy any stock, commodity, option or other financial instrument. Consult your financial advisor before starting any investment system.
It is a known fact that fear and greed can be a trader’s worst enemies.
I’ve found one way that has helped some clients deal with fear and greed and their cousin, “getting out of winners too soon and staying in losers too long.”
What is it? Entering Multiple Contracts: Philosophy
In order to enter multiple contracts while day trading, one has to have the appropriate risk capital and margin requirements. But the advantage of trading more than one “unit” or splitting your trading size into two or more parts is as such:
If you enter a trade with one contract (or if you are treating your trading size as one unit, meaning you enter a trade with 4 contracts and exit the trade with 4 contracts), you can face a very quick dilemma, especially when day-trading. Consider the two following scenarios:
You get in and very quickly you are up 2 mini SP points…what do you do? Do you take profit? Bring your stop loss closer? How do you avoid getting out too early or too late?
You enter a trade and it goes against you rather quickly…if you get out then it is a loser…but the little voice in your head says “what if the market goes back up?”
In the first case scenario, when market decided to be nice to us and moved in our direction, I like to exit half of my positions relatively quickly. In the case of the mini SP, this would be around 7 ticks profit.
What I’ve found is that this will allow me to manage the rest of the trade in a much more relaxed manner. Since I’ve already locked profits in, now I can look for a proper stop close to my break-even level. I can analyze my next target more realistically and, if the market provides room for additional gains, be there to participate.
I think the leader of the markets these past few trading sessions, have been gold – an example is from today’s trading session when SP lows followed Gold lows by minutes…. Below you will see an hourly chart of the gold market with potential, very short term targets on both a continued bounce as well as in case the longer term down trend resumes.
Personally, I think gold will be trading between 1523 to 1625 for a while , which by itself is a very wide range if I am right and I have been wrong many times before.
When you feel the “heat of the markets” is affecting you and you are in a position, take a step back and ask yourself, “what would I do if I was not in a position currently…”? the answer should help you manage your current position while in a trade.
Hourly chart of Gold Futures below for your review:
RISK DISCLOSURE: Past results are not necessarily indicative of future results. The risk of loss in futures trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.
