Commodities Trading Signals Companies
Commodity trading signals is the art or strategy of buying and selling commodity options and futures with the hope of profiting from price appreciation over time. Listening to the financial news and reading about a particular commodity is not enough to make wise trading decisions.
The fundamental analysis only helps to give an idea of what changes or market behavior would look like owing to consumption and output in raw materials of a particular commodity. A little bit of fundamental analysis and an excellent technical knowledge of the market is what is needed in commodities trading strategies.
A key principle in Commodities Trading advisors companies are to buy low and sell high this fact has been established by commodities trading signals advisors.
Types of Commodities
There are four categories of commodities that can be traded and they are;
- Energy such as crude oil, heating oil, natural gas and gasoline
- Metals such as silver, gold, copper, and platinum
- Agricultural Products such as soybeans, corn, rice, wheat, coffee, cotton, cocoa, and sugar
- Livestock and Meat like lean hogs, pork bellies, live cattle and feeder cattle
Commodities Trading Advisor Strategies
- Range Trading Strategies
Range trading involves identifying a channel with a top and bottom, where market has touched and turned often at a support and resistance level. A channel is two points, one being a higher point known as the resistance and the lower point known as the support.
These methods work by waiting patiently to see market price touch either the lower or upper levels of this channel. Once price is at the lower channel it is a good area to buy and exit at the top channel which is the resistance and a gain one can sell at that resistance and then exit at the lower part which is the support.
One advantage of this is that this pattern can be traded repeatedly as far as price remains within this channel, once the price moves out of this channel, then a breakout has occurred.
This method is also good because it gives a good risk – reward ratio for the trades taken. Most commodities trading signals companies employ this strategy as it does not involve large stops.
- Trading Breakouts
This strategy of trading commodities is involves waiting patiently for a commodity to break out of a range and other patterns like the triangle, head and shoulder patterns and then sell the commodity as it makes a new low or buy as it makes a new high.
Commodities are very volatile and should be traded by professionals with huge capital and experience. This method is a kind of position trading that may require holding on to a position for months.
In a market that has a consistent (up or down) trend this method thrives, the major idea is to spot the trend and look for breakouts as if there is a strong trend the market will continue to make new highs and new lows.
- Fundamental Trading Strategy
Fundamental strategy in commodity trading involves trying to analyze fundamental factors that can affect the prices of commodities in terms of their demand and supply. This can be a bit difficult as it is not always clear as to when to pick the right entry.
Hence, the best method to trade commodities is the combination of both fundamental and technical analysis. These are some of the commodities trading strategies with which we generate our commodities trading signals we send to our subscribers.