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Technical Commodity Trading

Technical commodity trading reads commodities markets while fundamental analysis of the commodities market looks at things like weather forecasts. At least that is the simplistic view of technical commodity trading versus taking the fundamental analysis approach. The fundamental view of commodities trading is to analyze and anticipate all material factors that will determine a commodity price at a future point in time. The technical view is that all of what everyone needs for accurate market analysis is already factored into current or future commodity prices. The technical trader looks for technical market indicators to anticipate how everyone else will trade commodities in light of know fundamental data. For the beginner and for a refresher for seasoned traders Commodity and Futures Training will highlight the pros and cons of technical and fundamental approaches to commodity trading.

As long as three hundred years ago rice traders in Japan used technical commodity trading with the invention of Candlestick basics. The introduction of Candlestick charts led to the recognition that each recurring up and down configuration was a recurring Candlestick pattern. This pattern would allow the trader to accurately predict upcoming market movements for rice. These techniques allow traders today to successfully trade stocks, commodities, futures, and options markets.

In Japan three hundred years ago farmers tried to predict the weather, kept track of how much rice was planted and other fundamental factors important to knowing how much rice would come to market. It was the invention of an accurate system of technical analysis that gave people a tool akin to magic. Technical commodity trading tools included in Candlestick chart analysis gave traders a view of the future based upon accurate recording of past market behavior. This same set of principles works to day in technical commodity trading whether the individual is trading rice or the futures market in environmental credits.

Trading psychology was just as much a factor three hundred years ago when Candlestick trading tactics were new. Although a new piece of fundamental information will drive the market up or down, subsequent market movements are often driven by overreaction. Whether prompted by greed or fear, the recurring trends in commodity and other markets are recordable. They are available for study and, subsequently, predictable. Technical commodity trading is largely based upon the fact that the behavior of groups of traders in subject to prediction.

Commodity and Futures Training will point out when fundamentals of the commodities and futures markets are the main factors moving the market and when technical factors are a better guide in commodities investing. Successful trading in commodities starts with knowing fundamental factors that drive the markets. Successful execution of trades in commodities depends upon knowledge and skill in the technical aspects of an active commodity market. Studying with someone with wisdom and experience in the commodities and futures markets can give the insights necessary for the final proof of skill, making a profit in trading. Go to school, learn a little, practice what you learned, and be successful trading commodity futures.

Market Direction: Due to travel conflicts there will not be a market direction update this evening nor stock chat.

 

Good Investing,

The Candlestick Forum Team


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