Whether you use automated trading systems or trade discretionary and whether you concentrate on stock indices, commodity spreads, or other underlying assets, you probably know that the technical analysis instruments serve for building quality trading systems and defining the enter and exit conditions. Technical analysis uses indicators that say the trader when to enter and…
In the previous chapter we looked at the various markets and exchanges where we can trade these markets. Now is the time for us to clarify everything related to the detailed specification of contracts. Specification of a contract basically means a summary of essential and very important information about the commodity futures contract in a…
In the previous chapter we explained the differences between electronic and pit trading. This chapter will be devoted to individual exchanges and markets that are traded on them. Therefore, we will be interested in places where, as I sincerely hope, you will be able to significantly appreciate your capital one day, also thanks to studying…
In previous chapters we focused on market participants who contribute to creation of commodity prices. As we already know commodity markets are traded on commodity exchanges. Remember that as traders you have to concentrate on highly liquid markets. Yet before we introduce the main commodity exchanges and the potentially attractive markets, we must clarify some basic…
As beginner commodity traders you should definitely be aware of who is involved (and how much) in the formation of price movements in individual markets. There are two basic categories of traders – Hedgers and Traders each of which having somewhat different interests in the context of commodity trading. Let´s look at their interests a little…
As we have already said, commodity trading is based on the principle of trading “termed” futures contracts. This means that they expire on a certain date in the future (and the commodity is physically delivered on this date). We have also explained that we can sell the purchased futures contract anytime before the expiration date.…
The essential and unchangeable principle of futures contracts is that they are termed. This means that they will expire on a certain date in the future and the commodity will be physically delivered. This date is called the expiration of the contract. But be careful! As we have already explained in Chapter 3, you can close…
In my trading I primarily focus on commodities that are traded through “futures contracts”. In this chapter I will explain what led me to this way of trading and what are principles of commodity trading. Commodities, like most other underlying assets, are traded on exchanges. Basically, there are the following types of exchanges: Exchanges foreign currency…
Futures trading has several significant advantages over trading with conventional underlying assets such as stocks. The first one is that futures trading inherently includes leverage. The term leverage means that you can control large amounts of assets (corn, gold, and others) via only a low marginal amount. Let’s explain this principle on an example. At the…
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