Traders who trade for a living are generally swing traders or day traders. If you are planning to day trade in commodities, then you need to get hold of a reliable trading system that gives good results consistently. Despite having such a system, there are a few things you may want to know about day trading in the commodity markets.

Day Trading Defined

Those who trade and complete all their trades within the period of a day’s trading session are known as day traders. Day traders have to square off all their trades by the end of the 24-hour period. That is their time limit. If they hold their positions for any longer, they can then be called position traders, and not day traders. They are the most common form of traders to be found in commodity markets.

Day traders like to churn their capital on a day to day basis to maximize its return. They prefer not to lock in capital for extended periods of time. More often than not, they have very limited capital to leverage, and cannot afford to block it all. Speed is the name of the game where day trading in commodity futures is concerned.

Facts About Day Trading

It has been observed that you stand a better chance of earning money in day trading commodity markets if you are prepared to invest a bigger amount of money. This is because more money gives you the option to diversify your investment and manage the risks better.

An important component of commodity futures trading, is using charts that allow you to decide what you want to do. Secondly, those who follow trends taste success.

As in all things, there are limitations that day traders face. The most important one is that they trade in a single day’s session. Hence, they cannot let their profits run any longer even if they want to – they are limited by time. They prefer by choice to take the money and run. Time is money, and time is limited. Another issue that crops up at some time or another for day traders is their stops. They cannot have too large a stop for fear of losing a lot of money. Therefore, they have to keep narrow stops, and thus increase their chances of being whipsawed out of a trade early. Ask any old hand about being whipsawed, and they will tell you that it is a part of the game. Daily ranges also limit targets, as the luxury of hanging on is not available. Quick profits are targeted, and many a time commodity day traders have to get out of a trade at the end of the day having made very little or no money from it.

However, day traders are not to be under estimated in any way. They truly form the volume numbers of the commodity market. Many intraday movements are because of day traders. They cause sudden spurts in commodity prices with heavy buying or selling. An integral part of the market, they form the backbone of the commodity market.

By: David Rivera

About the Author:

stanfordiver asked:


myth…business cycles have ended…result…stock market crash
myth…housing prices never go down…result…housing crash
myth…we are running out of oil and food…result…coming commodity crash (and many poor people not eating correctly)
myth…global warming is going to kill us all…result…misallocation of billions of dollars to something we cannot control because it is natural.

Why do people continue to believe in myths? It is very sad.

politicoswizzlestick asked:


or as someone else suggested increase the margin requirments to make trades on barrels of oil —forcing indviduals or groups to have more money to get into the oil speculation game. (I am still chewing on that idea. I think companies would still offer ways to work around that.)

I obviously don’t mean “tax gas” and I am not talking about taxing Oil company’s profits as some have — I think that would be passed on as higher gas prices.

Unlike the “winfall profit tax” idea, I am talking about taxing people who really have no role in the production of Oil, therefore the costs of the tax would not be passed on to us.

I mean impose a fee on each purchase of oil on the markets. Make it painful for an investor to buy oil as a commodity. Create a financial incentive for investors to invest in other commodities or stocks or bonds. If they want to still invest in Oil, make it seem obvious that they get to keep more of a return investing in oil companies rather than the oil itself.
Headline news reported today that it costs $50 to produce a barrell of Oil. Other reports suggest that the cost of a barrel for US Oil companies is much, much lower cost

At $50 a barrell, I would think Oil should be selling at around $55-75 a barrell. Oil was selling at $139 a barrell 2 days ago. Headline news says speculation on barrells of Oil as commodities have driven up the cost of oil, not shortages in production or refinement capacity.

So why not pass legislation that makes SPECULATION on Oil a ton less lucrative?

I am not an economist (probably Obviously to you folks) but I am quite interested in your opinions on what —if anything — should be done about the climbing cost of Oil.

I mean if you drill more, OPEC will just cut production — what should be done?

Today, trading futures is one of the best and most profitable financial investment methods. Of course, trading on the stock market is not for the faint hearted. You need to be strong, have the ability to take risks, as well as have the emotional strength to overcome a significant loss. A highly leveraged market, the trading futures market doesn’t discriminate and offers everyone an even playing ground to try their luck. From Warren Buffet to Donald Trump to others, trading futures is a profitable and interesting way to make money and climb the ladders of success. Of course, you should never take futures trading lightly and continue to educate yourself in the latest techniques even if you have been trading for some years. Remember, a sound trading strategy and knowledge about the market you are trading in are your biggest defense against any potential damage.

Whether you are already trading in the stock market or have some experience, trading futures is a completely different ball game. It is advisable to have access to some professional and expert advice. However, if you are looking for a broker, you should check the experience, reputation, fees, testimonials, and customer support of the broking firm before choosing them. An experienced broker can be a highly valuable help in making money from trading futures. Not only does a broker know the latest market trends, he also knows some of the tricks and effective trading methods that can prove to be beneficial for both of you. While their charges may be slightly high, the fact that they can bring you heavy profits while adding worth to your portfolio of futures can not be neglected.

Brokers also help if you are new to trading futures. Since there are so many choices, he/she can help you choose the more popular and most traded commodities as well as educate you on the contracts that are best for your investment types and requirement. After all the formula for success in trading futures is simple and can be written as success = knowledge. With so many types of online trading systems, you’ll have just too much information to sort and utilize. However, a broker can do this for you with relative ease, leaving you with time and ability to simply take advantage of the various trading future trends. Some of the factors for future trading include the capital requirements; the leverage; liquidity; and volatility.

Today, trading futures online is a quick and easy way to high profits and more comfort. Whether you are at work or at home, access your futures trading system online and making sales and purchase can be a very easy and responsive affair. So also, the commission charges for online futures trading firms are lower than brick and mortar firms. While this doesn’t guarantee profitability, it surely eliminates the need for visiting your broker on a daily basis for carrying out trading. Seeking help of professional broker is very important for ensuring you can minimize your losses and avoid possible pitfalls.

By: Hayi Mansoor

About the Author:

daytradetowin asked:

“online day trading” “live trading” “online daytrading” “profits” “Forex” indicators “john paul” daytrade “day trade” “day trading online” “day trading live” “stock trading” commodities commodity “commodity trading” e mini “Day trading S&P” “S&P e-mini” investing “ninja trader” tradestation…

What Is Commodity Trading?

Commodity futures markets allow commercial producers and commercial consumers to offset the risk of adverse future price movements in the commodities that they are selling or buying.

In order to work a futures contract must be standardised. They must have a standard size and grade, expire on a certain date and have a preset tick size. For example, corn futures trading at the Chicago Board of Trade are for 5000 bushels with a minimum tick size of 1/4cent/bushel ($12.50/contract).

A farmer may have a field of corn and in order to hedge against the possibility of corn prices dropping before the harvest he might sell corn futures. He has locked in the current price, if corn prices fall he makes a profit from the futures contracts to offset the loss on the actual corn. On the other hand, a consumer such as Kellogg may buy corn futures in order to protect against a rise in the cost of corn.

In order to facilitate a liquid market so that producers and consumers can freely buy and sell contracts , exchanges encourage speculators. The speculators objective is to make a profit from taking on the risk of price fluctuation that the commercial users do not want. The rewards for speculators can be very large precisely because there is a substantial risk of loss.

Advantages of commodity trading

Leverage. Commodity futures operate on margin, meaning that to take a position only a fraction of the total value needs to be available in cash in the trading account.

Commission Costs. It is a lot cheaper to buy/sell one futures contract than to buy/sell the underlying instrument. For example, one full size S&P500 contract is currently worth in excess off $250,000 and could be bought/sold for as little as $20. The expense of buying/selling $250,000 could be $2,500+.

Liquidity. The involvement of speculators means that futures contracts are reasonably liquid. However, how liquid depends on the actual contract being traded. Electronically traded contracts, such as the e-mini’s tend to be the most liquid whereas the pit traded commodities like corn, orange juice etc are not so readily available to the retail trader and are more expensive to trade in terms of commission and spread.

Ability to go short. Futures contracts can be sold as easily as they are bought enabling a speculator to profit from falling markets as well as rising ones. There is no ‘uptick rule’ for example like there is with stocks.

No ‘Time Decay’. Options suffer from time decay because the closer they come to expiry the less time there is for the option to come into the money. Commodity futures do not suffer from this as they are not anticipating a particular strike price at expiry.

Disadvantages of commodity trading

Leverage. Can be a double edged sword. Low margin requirements can encourage poor money management, leading to excessive risk taking. Not only are profits enhanced but so are losses!

Speed of trading. Traditionally commodities are pit traded and in order to trade a speculator would need to contact a broker by telephone to place the order who then transmits that order to the pit to be executed. Once the trade is filled the pit trader informs the broker who then then informs his client. This can take some take and the risk of slippage occurring can be high. Online futures trading can help to reduce this time by providing the client with a direct link to an electronic exchange.

You might find a truck of corn on your doorstep! Actually, most futures contracts are not deliverable and are cash settled at expiry. However some, like corn, are deliverable although you will get plenty of warning and opportunity to close out a position before the truck turns up.

By: Tim Wreford

About the Author:

Taco asked:


Is the “The Scowcroft groups” a Liberal group out to destroy Bush?

Prior to the election of President George W. Bush, the following were members of the “Scowcroft Team” (Selected Staff and Board Members of the Scowcroft Group):[2]

* Brent Scowcroft
* Kevin G. Nealer
* Gary Edson
* Colin L. Powell
* Condoleezza Rice
* Richard Haas
* Ken Juster
* Howard Baker
* Carla Anderson Hills
* Robert S. Strauss
* Lawrence Sidney Eagleburger

Their Clients

Their clients are industry leaders in the telecommunications, insurance, aeronautics, energy and financial products sector; foreign direct investors in the electronics, utilities, energy, and food industries; and investors in the fixed income, equity, and commodities markets around the world.

You can’t be that stupid—-I hope you don’t belong in the stupid club created by Rush and O’Reilly?
Hey liberals! Read before you post!

don’t prove to the conservatives that you are really stupid!

Obama W. Bush asked:


Like Corporations trade Carbon Credits. Can abortion credits be traded for say commodities.
Instead of getting an abortion every year, If someone goes a couple years without an abortion shouldn’t they get 2 free abortion credit slips that can be traded for a down payment on a car.

After all this is a Democracy wright
Hey iris

How did you get to be a TC by sowing discord

Proverbs 6:16-19

Joe Joseph asked:


Hi,
I am thinking of investing beyond equities and want to try currency and copper. But first I want to do some dummy trades. Any suggestions on where to start (any book or site providing step by step instruction)? I want to have a real feel with the margin requirements, volatility, etc.

Carefree asked:


I could be wrong, but I heard something about China holding down oil prices in its own country, which resulted in an even more so increased demand for oil within China, which obviously drove up the price of oil in the open market, to a ridiculously inflated level?