How to trade the commodity life the professional trader

Discussion in 'Trading Systems and Strategies' started by Micle Clarc, May 13, 2017.

  1. Micle Clarc

    Micle Clarc Trader

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    Trading the commodity market is a little bit different from the currency market. The price of a commodity is extremely sensitive to major news and political events. If you are relatively new in financial instrument trading then you must learn the basic of the financial market before you start trading the commodities in the market. The professional traders in Singapore are making a decent income in every single month by trading exchange traded funds with the professional brokers Saxo. In order to execute high-quality trades in the market, you need to make sure that you know the fundamental factors of the market which is often considered to be the most powerful price driving catalyst in the forex market. In this article, we will discuss how to trade the commodity market like the professional traders in the world.

    Do the fundamental analysis
    Fundamental analysis is often considered to be the most powerful analysis in the financial market. Price movements of the commodity market can be analysis to a great level of precision if you know how to do the perfect fundamental analysis in them market. It’s true that learning the art of fundamental analysis at the very beginning will be a little bit difficult for us but if we truly follow the footstep of the professional traders then within a very short period time we can master the art of fundamental analysis in the market. Some of the novice traders in the financial market often ignores the fundamental analysis and execute their trades in the market based on technical analysis only. But statistics suggest that those who trade the commodity market based on technical analysis loses money instead of making a profit.

    Analyze the high impact news release
    The financial market is very much sensitive to high impact news release.fi you are involved in the exchange traded funds community then you know very precisely that in order to secure the best possible trades in them market the knowledge of fundamental analysis is a must. As a professional trader you should always assess the major news release in the market or else you will not be able to execute high-quality trades. For instance, if you trade the oil in the global economy then you should put a great level of importance to the OPEC decision. If the supply of oil the global economy increases then the price of oil will drastically fall. So if you ignore the news analysis then chances are very high that you will lose a huge amount of trading capital in the market.

    Invest in the longer time frame
    Most of the novice traders in the exchange traded funds always try to trade in the shorter time frame. But if you look at the professional traders then you will see that every single one of them is trading the higher time frame in the market. The commodity market is a little bit different from the currency market and if you see the price movement and trade setups then you will notice that trading the higher time frame will give you much better returns in the market. However, in order to trade the higher time frame in the market, you need to have lots of patience since you will have to wait for longer period of time for the perfect trade setups in the market.

    Summary: Trading the financial instrument is one of the most profitable business in the world. If you truly want to become professional commodity trader then make sure that you learn the basic of the market and always do the fundamental analysis before you execute any trades in the market. Last but not the least, never trade with the money that you can’t afford to lose.
     
    Last edited by a moderator: May 14, 2017
    Ulacan likes this.
  2. myfxpt

    myfxpt Master Trader

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    Interesting! Would you please share these statistics?
     
  3. Ulacan

    Ulacan Trader

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    I wonder why this thread went silent too soon... Am I the only trader interested in commodity trading? Anyway, I'd like to hear more on this topic, it's very important, especially to new traders who would like to go for commodity trading rather than currency trading. Kindly anyone with more information? I'd appreciate
     
  4. myfxpt

    myfxpt Master Trader

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    You are not the only trader interested in commodities. There are two of us!
     
  5. sport

    sport Master Trader

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    It is said that trading commodities can be very successful if certain seasonal moves are taken notice of.
     
  6. Properly

    Properly Master Trader

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    First of all - KNOW YOUR PRODUCT. If you trade commodities you have to know what data releases makes major impact on it for example
    • Crop report - impacts soybeans, corn and wheat
    • Crude oil inventories - Gasoline, WTI, Brent Crude, RBOB, Heating Oil
    • NatGas storage - Natural Gas
    If you trade cocoa or coffee you should know the major exporters of those products, same for precious metals.
    It is good to know fundamental analysis, but sometimes it doesn't help.
    It is not true that all professional traders trade higher timeframes.

    You are right, many commodities has its seasonal moves, good example of this is Natural Gas which always starts moving rapidly during heating season.
    Check last year NatGas prices ;).

    Ulacan please ask questions, I try to answer if I can ;)
     

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