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Trades can look at copper demand is stronger in the Spring
for the start of the building season. Gas commodities trends are
higher in the summer seasons for vacation and tapers off when the
summer ends. Gold and precious metals are stronger in the holidays and
June as the wedding season starts.
These patterns happen nearly every year. Traders need to know that this
does not work all the time but this will put the percentages in your
favor. Many commodities patterns happen every year you just need to do
some research before you trade commodities.
Traders need to watch their charts to qualify the trade's relative
strength. What time of year it is and if trading grain, wheat, corn
what the weather patterns are. You should know that there is better
than an eighty five to one hundred percent chance that the seasonal
will work again.
Just be aware of outside forces such as weather, war, labor strikes. There
are many seasonal patterns going on in many of the Commodity markets
at any given time of the year. So when you see a pattern approaching
make sure of the fundamentals before placing the trade and use proper
stop losses.
Relative Strength is not the indicator RSI that can be found on
many trading platforms. This Relative Strength is the measure of
strength and weakness in relative terms between commodity contracts.
Make sure you set up your charts on a daily or weekly pattern, this is
not day trading but swing trading the commodities. You are looking for
markets that are showing strength so you may buy those contract months
and ones that are showing weakness so we may short those contract
months.
Commercial traders are in the markets on a daily basis hedging
their products. The good thing about this is they are leaving
footprints behind of their behavior in the markets. Remember that in
reality, no broker can move the market in one direction or the other.
The only time they could take you out of the market is when the price
is near to your order and they could widen the spread to capture your
bid or ask.
You should always watch how the contract are acting and if you are in the
money go ahead and take your profits. The Commodity markets are great
to trade and with research and knowing what effects them over a longer
period of time traders will make money trading the commodities.
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