Commodity Future Trading System
Commodities trading is one of the worlds long standing industries. Ever since worldwide values where put on the cost of such products as oil, gas, coffee and so on, there had been profit to be made from buying and selling these commodities. The principal is to buy low and sell high of course, but in todays complicated financial systems, it is possible to sell a commodity before you buy it, what is known as going short in the financial world.
With all commodities and currencies, there is a spot rate, which the tick-by-tick price as it happens, you can by and sell like this for profit. You can also trade these products through the futures market, which without going into to much detail, is a prediction of where market is going. Whatever you are going to trade you need a system, so if you are going to trade commodities futures then you will need a commodity future trading system. Where you get this system from is another matter. You may base you decisions on gut instinct, buying into oil futures during turbulent times in politically charged areas of the Middle East, where most the worlds oil is produced. On the other hand, you may just use historic highs and lows to decide where to enter and exit your trade. Some people use seasonality to influence their trading style, for example with gasoline futures, or propane futures. Some investors will invest in propane at the beginning of the winter season when demand will strengthen. There is still risk of course, a particularly mild winter could see supply out strip demand, but a very cold winter could see supply unable to meet demand, and prices could rocket upwards.
There are also trading systems that are based solely on charts and charting software. There are plenty of programmes that help to analysis the market price action and base decisions on where to buy and sell. Different traders have different systems based on different principals, and some of the ideas may contradict each other, so you will have to decide for yourself, which is the best trading system for you.
With all commodities and currencies, there is a spot rate, which the tick-by-tick price as it happens, you can by and sell like this for profit. You can also trade these products through the futures market, which without going into to much detail, is a prediction of where market is going. Whatever you are going to trade you need a system, so if you are going to trade commodities futures then you will need a commodity future trading system. Where you get this system from is another matter. You may base you decisions on gut instinct, buying into oil futures during turbulent times in politically charged areas of the Middle East, where most the worlds oil is produced. On the other hand, you may just use historic highs and lows to decide where to enter and exit your trade. Some people use seasonality to influence their trading style, for example with gasoline futures, or propane futures. Some investors will invest in propane at the beginning of the winter season when demand will strengthen. There is still risk of course, a particularly mild winter could see supply out strip demand, but a very cold winter could see supply unable to meet demand, and prices could rocket upwards.
There are also trading systems that are based solely on charts and charting software. There are plenty of programmes that help to analysis the market price action and base decisions on where to buy and sell. Different traders have different systems based on different principals, and some of the ideas may contradict each other, so you will have to decide for yourself, which is the best trading system for you.