What do I mean when I talk about chart structure and why do I think it’s so important when deciding to enter or exit a trade? I define chart structure as a slow grinding up or down trend with low volatility and no chart gaps. Many of the great trends that develop have very good chart structure with many low…
How Can You Use Moving Averages To Your Advantage? A simple moving average is calculated by adding the closing price of a commodity such as crude oil for a number of time periods and then dividing this total by the number of time periods. Short-term averages respond quickly to changes in the price of the underlying commodity, while long-term averages…
When Should You Enter Into A Trade? I have been asked this questions on multiple times over the course of my 25 year trading career as I try to find the trend before entering into a bullish or bearish position as my rule states. I like to buy or sell a commodity when prices hit a 4 week high or…
TRADING THEORY-–This rule states that one must have a game plan and use it consistently even during periods of losses, which will happen to you over the course of time. Do not suddenly start to risk 5-10% because you have to catch up and get your loses back quickly, stick with the game plan, and over the course of time,…
TRADING THEORY—Never answer a margin call because you are probably over trading and most likely the position is going against you and probably have lost much more than 2% on that trade. Never allow this to happen to you because you always want to have sufficient margin in your trading account just in case the exchange raises margin and that…
What Does Risk Management Mean To You? I generally tell people that the reason people lose money in commodities is not due to the fact that they are bad at predicting where prices are headed, however they are bad when it comes to losing trades and refusing to take a loss which results for heavy monetary losses that are difficult…
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How long does a meaningful consolidation has to last before you enter a trade ? In my opinion I always want to see a consolidation that lasts at least 8 or more weeks before I would consider entering. The reason that I want a longer consolidation is to try and avoid a bunch of false breakouts such as a 10…
What Does An Inverted Market Mean? Its when a futures market where the nearer month contracts are more expensive than the distant months contracts as an inverted market occurs during periods of shortages. Typically, the further months are more expensive because the goods have the additional costs of insurance, storage, and interest costs incurred in borrowing funds to hold the…
What do traders mean when they talk about seasonality and its effects on commodity prices? The definition of seasonality states that a characteristic of a certain time when the data experiences regular and predictable changes which occur every calendar year and in a time series that reoccurs or repeats over one year can be said to be seasonal. An example…