Commodity trading, often with the assistance of a futures broker, is being completely viewed as a safe and an economical investment horizon. Introduce yourself to the various commodity trading strategies to closely monitor your broker’s merriment and further you can also develop a rewarding strategy yourself.
Commodity trading strategies help you to have a suitable approach to time your trades. Such accessibility need not be necessarily based merely on general financial news or commodity distinct reports but incorporating some level of technical and fundamental analysis empower you to frame realistic tactics and you can get Free tips.
Strategies to trade in commodities ordinarily follow either a range trading method or breakout methodology; you can also use transform of both to tweak your approach.
Commodity Trading Methods:
• Range Trading Method: This method entails buying the commodity at low range (support) and selling it at high range (resistance). The strategy aims to buy when the commodity is oversold and its prices drop to rock bottom levels and targets to sells an over purchasing a commodity, when it prices reach peak level. You can quantify the overbought and oversold levels by monitoring RSI, Rate of Change, and Stochastic etc. This strategy is profitable when no substantial trend of the market can be arrived at.
• Breakout Method: Opposite to the range trading method, breakout method postulates you to purchase a commodity at its high levels and sell it when it prices shrivel and make new lows. Graphical demonstration in various reports, news aids you to easily track the high and low levels. When there is durable information on a commodity and subsequently prices tend to rise, such strategic can give you a good advantage.
Further Useful Commodity Trading Strategies:
- Stick to a certain strategy for an advisable period before shifting to a new one, as frequent changes in strategies may not be fruitful.
- Don’t structure or change strategy immediately based on news reports. A careful understanding and explanation of the news on markets, commodities is warranted.
- It is advisable to have cognition of the production cycle of commodities especially food items, as seasonality holds the key in price assessment of such items.