Futures trading has the potential to be both exciting and profitable. The key to success is learning the details involved. A basis for understanding futures is to knowing the futures exchanges or places where futures are traded. The futures exchanges are located in various locations throughout the country; they have different commodities trading options at each location and the rules vary as well.

General Futures Exchange Information
As you may know, you will not actually do business with the futures exchanges listed below. You will place trades with your broker who will take your orders to the futures exchange floor for you. If you have been paper trading options or futures, you likely already have an account for commodities trading so you are ready to start. If not, you should select a broker and even consider paper trading for a while. Paper trading is the act of creating a fictitious account that trades just like a real one; this is an excellent way to learn about commodity trading. There are futures exchanges throughout the world but let’s focus on the ones in the US. The futures exchanges below are in Minneapolis, Kansas City, New York and Chicago.

Futures Exchanges
Like the stock market, different futures exchanges trade different commodities. In addition, each futures exchange accepts different market orders. Since not every futures exchange permits every type of order it is necessary to talk with your broker about which orders are permitted where you are trading. The following is a list of the major futures exchanges, their commodities, and the orders that they accept:

Kansas City Board of Trade
The Kansas City Board of Trade is located in Kansas City, MO. This market accepts the following commodities: Kansas City Value Line and Kansas City Mini Value Line. The Mercantile accepts all types of futures orders. In addition, the Board of Trade accepts Kansas City Wheat with market, market on close, limit, stop and “fill or kill” trades.
 
Minneapolis Board of Trade
Located in Minneapolis, MN, the Minneapolis Board of Trade accepts the following commodities: Minneapolis Wheat and Minneapolis White Wheat. All futures orders are acceptable at this exchange.

Chicago Board of Trade
Located in Chicago, IL, the Chicago Board of Trade deals with these commodities: wheat, corn futures, oats, soybeans, soybean oil, soybean meal, T-Bonds, T-Notes, municipal bonds, 5-year Notes, 2-year Notes and DJIA Index. Acceptable orders here are: market, market on close, limit, stop, and “fill or kill orders.”

Chicago Mercantile Exchange
Also located Chicago, IL, the Chicago Mercantile Exchange trades live cattle, lean hogs, lumber, feeder cattle and pork bellies. The Mercantile accepts all types of futures orders.

International Monetary Exchange
Located in Chicago, IL, the Monetary Exchange trades T-Bills as well as trading FOREX; Euro dollars, Canadian dollars, Euro currency, Australian dollars, Mexican pesos, Euro yen, Japanese yen, British pounds and Swiss francs. The Monetary Exchanges accepts all futures orders.

New York Comex
Located in New York, NY, Comex accepts market, market on close, limit, stop and “fill or kill” orders for copper trading. In addition, Comex accepts market, market on close, limit, stop and “fill or kill” orders for gold and silver trading. Stop limits are only allowed on a not-held basis.

New York Cotton Exchange
Located in New York, NY, the New York Cotton Exchange trades cotton, orange juice, dollar index. The Exchange accepts market, market on close, limit, stop and “fill or kill” orders.

New York Coffee, Sugar & Cocoa Exchange
This market is located in New York, NY and trades coffee, sugar and cocoa. All types of futures and options contracts are accepted here.

New York Mercantile Exchange
The New York Mercantile Exchange is located in New York, NY. This market accepts the following commodities: unleaded gasoline, platinum, palladium, heating oil, crude oil futures and natural gas. The Mercantile accepts all types of futures orders.

New York Futures Exchange
The New York Mercantile Exchange is located in New York, NY. This futures market accepts the following commodities: New York Stock Exchange Index and the CRB Index. The Mercantile accepts all types of futures orders.

Conclusion
For those wanting to become involved in futures trading, there is a wealth of opportunities. Whether you want to start trading FOREX or coffee futures, you can find the correct futures market to do your business. It is wise to discuss your investment philosophy with your broker first and then use your knowledge, your trading plan and a system like Japanese Candlesticks to help you be successful when you head for the futures exchanges.

Market Direction:  Utilizing the candlestick signals by themselves makes analyzing reversals much easier. The analysis of a trend can also utilize other technical indicators that make the timing for short term trading much more accurate. Discussions in the Candlestick Forum chat room reveal other indicators that can prepare an investor for the possibility of a candlestick reversal signal, even if it is short-term. One of the basic trading rules is that when prices move extensively away from critical moving averages, the probabilities increase that a pullback will occur; moving prices back toward that moving average.

DOW

NAS

As can be seen in the Dow chart, the Dow has moved away from the 20 day moving average. Late March and early April showed that the 20 day moving average was acting as an influence in the Dow uptrend. The T-line, the 8 EMA has been acting as the recent support for the uptrend indexes. This makes for an easy trading format. The NASDAQ and the S&P 500 are not showing the same decisive strength as the Dow. Any weakness in those indexes, confirming the Doji's of the past few days, would make an investor more vigilant for watching a reversal signal in the Dow. Does this mean there is going to be a pullback in the next few days? Not necessarily, but the NASDAQ has pulled back to the trading line after witnessing indecisive trading days over the past six weeks.

The signals are the primary indicator that a change of investor sentiment/trend has occurred. Simple trading rules can be applied to a trend making for the anticipation of a potential reversal signal. This anticipation makes identifying a reversal signal more timely, taking profits when the signal is in the process of forming versus waiting for the signal to become completed. For short term investors, this becomes very valuable information when timing of exits can dramatically improve profits.

When nothing major is affecting overall investor sentiment, a strong candlestick buy signals will usually produce more extensive profits than normal BUY reversal signals. The Kicker signal is the strongest candlestick signal. It works in any market conditions but will work that much better when the market trend is not influencing investor sentiment. CHE was a recent recommendation on the website.

CHE

The recommendation was the result of a very clear Kicker signal. The definition of a Kicker signal is very simple. It is a graphic illustration the investor sentiment has been dramatically kicked in the opposite direction. These signals become more relevant when bouncing off major moving averages. After an extensive indecisive trading period, the appearance of a Kicker signal reveals there has been a dramatic change. This is just common sense investment practices put into a graphic depiction.

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