Finance Tips

It goes without saying one must have a thought out plan if they want to succeed in commodity trading. More so a proper mindset is an important ingredient in long term success in commodity trading. One cannot even think about successful commodity trading without first fully understanding probability and risk. In order to have the proper mindset and become a successful commodity trader, one must first learn to think in probabilities.

The simplest way to think in probabilities is to ask yourself a simple question.

“What was my profit over my last series of trades?”

Your series of trades are contingent on the way you trade and your time frame. For example, a short-term trader who uses very tight stop orders may use his last twenty trades. A long-term trader may use a shorter series of only five trades. This is a personal issue. Continue reading ‘Understanding Probability and Risk in Commodity Trading’ »

There are many reasons commodity traders or even stock market investors fail. Read this email that was sent to me.

Remember the charts condense all the economic, political and emotional expectations. And yes, every stock market movement is geared solely by expectations, not the real thing……….

And that’s what they are telling now:

We are currently at a stock market peak and the down hill is just around the corner.

The rally since March 2009 is coming to a halt.

Put your helmet and check your safety brakes, for we have now a bumpy road way DOWN!!!!!!!!!!!!!!!! Those who sell short will now rule…………

The fat lady is singing now, so you realize that the aria (the recent rally) is over………

You have been warned.

Listen with your Brain

Sincerely

XXXXXX (name withheld)

What is he doing? He is predicting! How many of you receive or send emails like this? I have learned that virtually all markets…regardless if they are Stocks… Forex… Commodities all trend at some point. The Commodity markets, forex markets and stock markets act the same today as they have 100 years ago. Nothing ever changes. I can show you a chart of any commodity…a forex spread… or any stock… this chart will look the same. Continue reading ‘One of the Reasons Commodity Traders Fail’ »

Today what do you call a gold bug? Cautious, prudent scared or a trend follower? The fact is that Gold is on the move once again. As I am writing this gold is knocking on the door 1020 again. Is it time to start gold prospecting? If you are a trend follower in the commodity markets one would need to pay attention to gold. It is one of the strongest commodities in terms of relative strength and price action. On a Donchian trading approach one would have been long gold since $968 on Sep 2. There is approx $1638 in profit per contract. The point I am trying to make is there are Gold bugs who suggest buying gold as the world is ending and there are commodity trading advisors that trade a system …follow the rules and seem to be on the right side of trending markets. Continue reading ‘Gold Prospecting’ »