Curious George asked:


Okay i understand the commodities were traded primarily as an interaction between a producer and a supplier. But these days, it seems hard to believe that only Old McDonald is involved in corn, wheat, soy, and all those futures. So how do other individuals, primarily financial institutues, profit (or lose) from the commodity markets when all they’re trading is something not very liquidable?

As traders all we really need to know is when a market is going to stop moving in one direction then turn around and head in the other. The rest is noise. I try to concentrate most of my energy on identifying these times. The day trading information presented here is applicable to longer term position trading. Read on to learn what a market requires to make a turn.

Observation From Trading Notes:

“Higher lows on the five minute chart.”

This is the obvious and classic rule to define an uptrend. Sometimes in our wish to buy the bottom of an e-mini futures move, we fail to see the market is still making lower tops and lower bottoms. But isn’t that what we want to see? No. We want to be buying a correction within a bigger uptrend. If the one minute bar chart is making lower lows while the five minute chart has already established itself as an uptrend, that’s what we want to see.

The market might continue down after we buy,. but that’s what taking risk is all about. There are few perfect set up outcomes. If we wait long enough for perfection, we will hardly ever trade. And when we do, the e-mini futures market has a way of taking the best set ups and going the other way to take out the followers of this “perfect” technique.

I’m convinced all commodity futures markets are simply live organisms that do whatever they need in rotation to beat up every participant they can. The e-mini futures market has clever tricks to beat up the trend followers, the break-out guys and the counter-trend traders. It will sometimes even take out a few different types of traders at the same time.

Ever see a “search and destroy” move? That’s when the previous high gets spiked, then the previous low gets spiked, then the market goes back into a middle chop. At that point, it’s disappointing no matter what technique you used. Just grin and bear it and keep watching for your next set up. If you survived with a small loss, you were successful. Remember, you don’t have to be perfect to make money – just better than most.

Observation:

“Daily chart is UP. The last 2-3 days was just a correction.”

This is a repeat of the last point. It’s the same basic pattern, but on a larger scale. When looking to go long the e-mini, you want the main trend to be going up, while the minor trend is correcting. A 2-3 day daily bar correction can look devastating on a 15-minute bar chart. That’s why it pays to continually scan all your time frames to put things in perspective and be ready for the big turns. “Don’t wish it to happen – don’t want it to happen – just let it happen.” (quote from the movie, “The Untouchables”)

Observation:

“The bearish advance-decline line has improved throughout the last day. The A-D numbers were better than 1:1 and bullish at day’s end.”

When the A-D line starts out one-sided, but improves throughout the day, add this to the indications that MAYBE a big change of trend is about to take place in the e-mini futures contract. The bigger the price clean-out that has occurred, the more likely its indication is true. There’s nothing like a gap opening and negative A-D line below 3:1, with multi-bottom chopping and the A-D line improving. You may not see the e-mini futures market make its big move up that same day, but if it opens higher and holds firm in a flat price plateau the next day, this is another indication that it wants to rally.

Part Four of Five Parts – Next!

There is substantial risk of loss trading futures and options and may not be suitable for all types of investors. Only risk capital should be used.

By: Thomas Cathey

About the Author:

daytradetowin asked:

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NATAREFoundation asked:

www.newsongtv.com The United States Catholic Conference and Maryknoll are asking the US government to reinstitute rules on Commodity Trading. There are over 100000000 reasons to do so. Please find out why……. … Poor Hungry “Social Justice” “Commodity Trading” Rice Wheat Corn Catholic

Commodity trading is the buying and selling of contracts of items that we use everyday. It is the trading of primary or raw products. Some of the items traded in the commodities market include such common, everyday items as: soy beans, cotton, orange juice, cocoa, sugar, wheat, corn, barley, pork bellies, milk, feedstuffs, fruits, vegetables, other grains, other beans, hay, other livestock, meats, poultry, and eggs. Energy items that are traded on the commodity markets include oil, natural gas, electricity, and gasoline. The commodity speculators in the energy market were blamed for the recent price increase in the cost of gasoline at the pump.

Buying and selling commodities is very similar to buying stocks and bonds on the stock market but with much more risk. Since it is much more volatile, commodity trading is very speculative, involves a high degree of risk, and is designed only for sophisticated investors who are able to bear the loss of more than their entire investment. It is not for the investor with a weak stomach! However, commodity trading is a battle between return and risk. Because of the leverage involved, you can achieve a higher rate of return than from most other forms of investment, but at a higher risk.

Commodities trade on different markets than typical stocks. For example, most people are familiar with NASDAQ or NYSE (New York Stock Exchange) for trading stocks and bonds. But commodities are traded on the world market. A few of these places are the Chicago Board of Trade (CBOT), the New York Board of Trade (NYBOT) (these two exchanges trade much of the grain and agricultural commodities), the Chicago Mercantile Exchange (for livestock and meat), the New York Mercantile Exchange (NYMEX) for energy, and the London Metal Exchange for precious metals like gold and silver.

Since it is so risky and speculative, many investors shy away from investing in commodities. However, it can be a very lucrative way to make money if you have the stomach for its wild ups and downs.

By: Dean Novosat

About the Author:

filipino_learning_french asked:


From West to East: A Transition of Power?

It has been a long roller coaster ride for the world to take the path for economic recovery. Economists can’t even tell a concrete duration when will the crisis ends. For past weeks, as the stock markets start to bounce back, currencies devalue the safe havens, US dollar and Japanese Yen, road to recovery is a common sentiment for all.
Demand for commodities helps top exporting countries of commodities to gain back their losses. According to Bloomberg Television, it was on March 9, 2009 when the WORST day for the world economy reaches decade lows as plenty companies shut down their factories and plants to reduce expenses, this result to millions of people are losing their jobs around the world.

“Developed World” is the undeniably the roots of this global fiasco, when the real state business in Wall Street headed to ground followed by the collapse of the Lehman Brothers in England in September 2008. It is a chain reaction, financial giants struggles which cause incipient countries to be affected.

On the side of the eastern part of the globe, which most are still “DEVELOPING” , are also battered by this global economic downturn, however, it can be noted that there is at least lesser effect on them, except for Japan, Hong Kong and Singapore, – which until now is suffering from massive losses.

There are speculations on the “transition of power” giving the throne to Asia. The idea starts when CHINA shows a rapid growth in their economy which is about 12.5%, compared to the western power which is 0 to 5% only. This gives analysts to project the world ranking by at least 20-50 years from now. If you do arithmetic, it shows that China will overcome today’s economic giant -United States- which for now is almost three times larger than its runner up. -Japan.

However, since the crisis began, developed countries experienced a negative growth, and a slowdown for emerging countries.

There are two ways in computing the GROSS DOMESTIC PRODUCT (GDP), which made a long argument among economists, traders and analysts. 1. NOMINAL 2. PPP (purchasing power parity)

However, nominal is the most commonly used for economists to make the ranking. The latter however is use in more technical comparison, since it includes the inflation rate, currency exchange and other vital information.

For 2008, The ranking for the World’s Top 15 LARGEST ECONOMY (GDP nominal)

1. United States
2. Japan
3. China
4. Germany
5. France
6. United Kingdom
7. Italy
8. Russia
9. Spain
10. Brazil
11. Canada
12. India
13. Mexico
14. Australia
15. South Korea

We all know that GDP (Gross Domestic Product) is the sum of all goods, trades, products, investments, revenues of a country in a given time. It can be quarterly or annually. Above ranking is for year 2008.

To determine the world’s WEALTHIEST country, which I believe one of the standards to become “DEVELOPED COUNTRY” GDP will be divided by the total population. So for above the countries GDP 2008 will be divided by their total population on 2008(not only those who are in the workforce). The quotient will be their GDP per Capita. The quotient will then be assessed. If I am not mistaken, at least 25,000 should me met.

Other standards include infrastructures, poverty rate, unemployment rate, political stability, well-regarded university, literacy rate, crime level, occurrence of natural disaster, sanitation and the likes.

Comparison: Which do you think is wealthier? A country with total output of $1,000,000 with 1,000,000 people?

Or a country with an output of $5,000 with 100 people?

THAT’S IT!

On recent news, however, China is regarded to save the world by years to come. While China is the 3rd largest economy in the world up-to-date, (surpassed Germany in late 2008), China remains a developing country, with low GDP per capita, high level of violation, and percentage of the population living below the poverty line. Outside Shanghai (its financial capital) and Beijing (country’s capital) people are poor with lesser civilization. With its huge population, the country is one of the most densely populated that makes social issue beyond its border, and other contemporary issues towards its government, people, etc. (Ex. Bird Flu, and the Contamination of Milk) Hong Kong is an autonomous region of China.

Trivia: China is one of the 1st or 2nd most populous countries in the world with at least 1.1 billion people making MANDARIN as the world’s most spoken language than any ANGLOPHONE countries combined. (U.S, U.K, Canada, Australia, New Zealand, Philippines etc.). However, English remains to be the supreme language of intellect, making English to be the international language, especially for business, spoken even by Chinese. But it’s rare to see American or British to speak Mandarin, isn’t it?

While China is said on its road to be the world’s superpower, lots of criticisms and justifiable words are