Welcome to Commodities Trading Guide
Commodities Trading Futures Trading E Futures Electronic Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Underlying Truths about Commodities Trading Systems
from:
There are procedures to follow when trading commodities. Computerized programs or the commodity trading systems are responsible for giving signals to the members when to sell or buy commodity futures or options contracts. The system produces the signals basing from mathematical formulas typically based from the trading data including prices and trading volumes involve in the technical analysis.
Trading systems that are based from technical analysis are attempting to predict the price movements in the future basing on price trends, price relationships and historical prices.
Do not rely too much on trading results being hypothetically posted. Many promoters of commodity trading systems often advertise hypothetical results. It is based from simulations of trading using either the historical data prices or real time simulated computer trading. Do not be fooled because there are some promoters only pretend that they have traded future contracts occurred in the past using the market price.
They then procure calculations of trading results basing from actual historical prices. The results are impressive, showing trading results having huge net profits within small marginal calls. Try to observe that the results do not reflect the actual trading. There is no actual investment, no actual profits, no actual future accounts, and no actual trading that really happened. All are only simulation results.
Assess these inherent limitations of hypothetical results of commodity trading.
- Hypothetical results do not go along 20/20 with the actual or historical results. The results produced on the trading system are not traded in the actual market so there is a high probability of risks that a trader can face about decision making. Actual price and demand of the commodity and its supply could have greater impact if compared to the hypothetical results.
- Real time posted on the results is not real. Hypothetical results based their tested systems on historical market data but trading in real time uses a live feed data when a system trading is being tested.
- There is a financial limitation. Hypothetical results do not take into consideration the trader’s ability of meeting margin calls or absorbing the losses of the trading. It already assumes that the trader who uses the trading system can survive financial losses and meet the results of margin calls. Remember that in reality, it is very difficult for a trader to sustain unacceptable losses and margin calls due to commodity trading thus this changes also affects the trader’s decision whether to continue on trading or not.
- The results posted are not tested under the real condition of the market. It only assumes that specific prices are used to buy and sell future contracts. Because these assumptions are not based from the real market condition, the systems can either underestimate or overestimate its performance. Remember that in reality, the execution of a trade is impossible to make in some of the markets. The actual bid or asked spreads does not reflect the actual prices as what is being posted in the hypothetical results.
- There is a possibility of rigging results. Be cautious because some promoters can display historical trades having the best-yielded profits.
- The promoters failed to consider the cost of leasing or purchasing the trading system.
Every individual should remember that in trading commodity options or futures by purchasing a certain trading system couldn’t guarantee profits. Commodity options and futures belong to endeavors which are regarded as high risks so there is no guaranteed trading system appropriate to gain profits.
Commodities Trading Futures Trading E Futures Electronic News
CME Group CFO and Managing Director of Finance and Corporate Development to ... - CNNMoney.com (press release)
 Latin American Herald Tribune | CME Group CFO and Managing Director of Finance and Corporate Development to ... CNNMoney.com (press release) CME Group brings buyers and sellers together through its CME Globex® electronic trading platform and its trading facilities in New York and Chicago. ... CME Group, Bolsa Mexicana de Valores and MexDer Announce Order Routing, Equity ... |
Frank, Peterson Vow to Eliminate Provision Keeping Swaps Opaque - BusinessWeek
Frank, Peterson Vow to Eliminate Provision Keeping Swaps Opaque BusinessWeek 11 that requires the Commodity Futures Trading Commission and Securities and Exchange Commission to write rules to allow the trading of swaps that are ... |
Wheat, Soy Gain as Weaker Dollar Boosts Appeal of US Supply - BusinessWeek
Wheat, Soy Gain as Weaker Dollar Boosts Appeal of US Supply BusinessWeek Wheat for May delivery advanced as much as 0.4 percent to $5.0675 a bushel in electronic trading on the Chicago Board of Trade, and was at $5.06 as of 1:13 ... |
Copper Jumps Most in 11 Months on Chile Earthquake - BusinessWeek
Copper Jumps Most in 11 Months on Chile Earthquake BusinessWeek Copper for three-month delivery on the London Metal Exchange jumped as much as 5.6 percent to $7600 a ton before trading at $7460, up 3.7 percent. Futures ... |
CME Group CFO and Managing Director of Finance and Corporate Development to ... - PR-USA.net (press release)
CME Group CFO and Managing Director of Finance and Corporate Development to ... PR-USA.net (press release) CME Group brings buyers and sellers together through its CME Globex® electronic trading platform and its trading facilities in New York and Chicago. ... |