|
|
| Profitable
Commodity Trading Using Candlestick Charting |
Commodities,
feared by the majority of investors. Feared
because commodities are highly leveraged and
can wipe accounts out. At least, that is the
general opinion of commodities. True commodity
trading appreciates commodities more than
stock trading. Commodity trading has much
less outside influences for moving price than
stocks. Commodities are not influenced by
interest rates, accounting mistakes, poor
management decisions, political rhetoric,
etc. Commodities are mainly influenced by
supply and demand, and maybe a few other outside
influences such as weather conditions. This
makes candlestick charting much more accurate
when trading commodities.
Remember, Japanese Candlestick analysis was
developed while trading a commodity, RICE.
The Honshu family not only became wealthy
from rice trading, they became legendary
wealthy. Not with sophisticated computer programs,
just basic eyewitness analysis and results.
Results that were measured by actual profits.
Money on the line profits.
Commodity trading is too risky to attempt
without some sort of trading program. Shooting
from the hip will not make you money in the
commodities market. That makes candlestick
charting a gold mine when trading commodities.
The same depiction of fear and greed seen
in stock trading is easily seen in commodity
charts. It becomes apparent when viewing commodity
charts that commodities have much smoother
trends. Note in the Cocoa chart, that once
the trend started up, it did not waffle from
its ascent.
As seen in the December Cocoa chart, after
it was recommended due to a gap up in price,
the trend stayed very consistent over the
next month and a half. No great swings caused
by outside influences. This steady price move
is much more evident in commodities versus
stock prices. Also, when a clear sell signal
appeared, the Bearish Engulfing pattern, the
new trend produced a fast and consistent move.
Candlestick charting has become very valuable
due to the consistency of the commodity price
moves. What was once considered highly speculative
investments has become credible income generators.
When the trends can be clearly identified,
the risk is dramatically reduced. The candlestick
signals applied to commodities still illustrate
the same investment psychology as seen in
any other investment vehicle.
The adage in commodity trading is that if
you can hit a 55% correct trade ratio, you
will make a fortune. Commodities move with
the same oscillations as witnessed in most
trading entities. Moving from oversold to
overbought ranges produces high probability
trades. Trading commodities allows the investor
to have a market to extract profits when other
trading markets, such as the stock market,
are not providing a good investing environment.
Commodities usually trade independently of
other commodities. Unlike the stock market,
this eliminates the prospect of a related
company’s “bad news” affecting a position
you own. This is not to say that some commodities
don’t trade in tandem, such as soybeans and
wheat or live cattle and feeder cattle. But
this is not an extensive list to be concerned
about.
The Candlestick Trading Forum utilizes candlestick
charting for low risk, high probability trading
programs. There is a good number of commodities
to trade, each unrelated to the others. This
creates the opportunity to find a clear cut,
undeniably excellent buy or sell signal using
candlestick charting most any time. No matter
what the economic atmosphere prevails, there
should be an excellent trade setup somewhere.
The Candlestick Trading Forum will not always
have a recommendation every day. But when
all the parameters are aligned, making for
that "perfect trade", we will put
out that recommendation.
However, this does not mean that commodity
traders cannot exploit the knowledge of the
Candlestick Trading Forum staff. If you have
questions or need an analysis of a commodity
trade, Members of the site have a couple of
avenues to have an evaluation of a trade.
The best way is to post the question on the
Forum, where all Members can benefit from
the ensuing discussion. Or you can simply
email the question to us, and we will provide
an answer via return email. Either way, use
our candlestick expertise, both to profit
from trades and to learn how to use candlestick
charting to trade profitably for the rest
of your trading career. |
|
|
|
