Learn Commodity Trading (Part II)

By Ahmad Hassam

Commodity trading can be fun and profitable if done well. However, commodity trading is never easy. Its not meant to be. It does not matter whether you are trading gold, soybeans or bonds; a successful speculator has to keep an eye on what is happening in many markets around the world.

We must learn to trade like mercenaries, trading not on the bull side or the bear side but on the right side. Commodity trading is certainly not for everyone. So what is the right vehicle for commodity trading? It depends on what commodity you want to invest in.

Commodity futures: Until 1970s, the futures markets and commodities were synonymous because the futures markets were all about those physical products that you could touch, taste, grow, mine, consume or deliver. Although many new futures products have been introduced but the physical commodities still are the major components of the futures market.

Like other segments of the futures markets, commodities can be broken down into several categories like metals, energy, grains, livestock, food and fiber. Metals include copper, gold, palladium, platinum, silver.

The energy futures market has become one of the most important gauges of the world economic and political developments. Crude oil futures began trading in 1983. Remember 2008, when the prices of crude oil jumped from around $60-70 to around $145. It was all due to the speculation by the hedge funds in crude oil futures. Natural gas futures contracts also get traded on NYMEX. Until 1978 when the New York Mercantile Exchange (NYMEX) launched trading in heating oil, Futures on Energy did not begin trading

Similarly you can trade copper, silver, platinum futures contracts on different exchanges. Now gold is a very important precious metal. Gold futures contracts trade on NYMEX! Chicago Board of Trade (CBOT) offers mini gold futures contract with lower margin requirements for retail investors.

Chicago Mercantile Exchange (CME) offers live cattle futures contracts as well as milk futures contracts. Meat markets also have a number of futures contracts like the feeder cattle contract, lean hog futures contracts, pork bellies contracts like the other commodities markets. You can trade all of these contracts.

You will also find coffee sugar, orange juice and coca futures contracts traded on various exchanges. Similarly you can find many futures contract that cater to the agricultural markets like soybeans futures contracts, corn futures contracts.

Although the futures markets offer the most direct way to invest in commodity trading, equity markets also offer access to commodity trading in an indirect manner. You can invest in companies that specialize in the production, transformation and distribution of these commodities.

For example by investing in the integrated energy companies like EXXON MOBIL, or the diversified mining companies like BHP BILLITON or electric utilities will still allow you to profit from the commodities boom.

Commodities mutual funds and exchange traded funds that deal with the commodities sector are another way to invest in commodity trading. You can also invest in the Master Limited Partnerships (MLPs) that invest in energy infrastructure like the oil pipelines and natural gas storage facilities. - 23162

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Learn Commodity Trading. Think About Futures Trading!

How Understanding Elliot Wave Analysis Can Enhance Your Stock Trading Strategy And Double Your Returns

By James P Kupe

One question every trader should ask before making an investment decision is: What is the overall trend of the market right at this moment? An understanding of Elliott Wave principles can help traders answer this question, and it can give you a confident forecast of whether the market is likely to go up, down or sideways in the immediate future.

A good reason to take the time to understand Elliott Wave Theory is that it can help you to identify whether the market is trending, or is it in a reaction to the current trend. Understanding these patterns of market behavour can help you to accurately forecast where the market is likely to go next, and position yourself accordingly.

There are three primary elements to Elliott Wave Theory

Pattern - Is the market currently trending up or down? Is it in an impulse wave or a corrective wave?

Price - When the market has completed an impulse move, how far will it correct?

Time - How long will the current trend continue?

A bull or up trend is signaled by a series of higher highs and higher lows, while a bear trend is characterized by a series lower highs and lower lows. These wave patterns can be seen in the market at all time periods " daily, weekly, monthly, and even on intra day charts.

When any market corrects, the major support and resistance ratios are .382, 50% and .618 and 100% of it's previous ranges. And it's important to remember that these reactions can be measured in both time and price. So if a bull market were trending strongly, you would expect an average correction to retrace around 50% of the previous leg up in both time and price.

Small retracements mean strong trends, so for example, if a stock rallies $5.00 in 2 months, you would estimate a 'normal' correction would be around $2.50 in roughly 30 days. If the market retraced less than 50%, say .382 in price ($1.91) and time (23 days), then gave you a signal that it was preparing to resume it's rally, it would put that Stock in a very bullish position for a continued move higher.

Understanding the Elliott Wave pattern in the markets you trade can help you to accurately determine the direction of the dominant trend. We always want to trade with the main trend, and if at all possible, try to enter at the end of corrections to that trend so we can maximize our profits. The problem for many traders however is this - how do I know the correction is ending and the major trend is resuming?

There are any number of 'entry triggers' people use to enter trends - Moving Average crossovers, trend line breaks, higher highs and lows on our Swing Charts, etc. Your main goal as a trader is to find an entry trigger you are comfortable with, something that has a proven history of reliably identifying the beginning of fast moving trends, and then take every signal that system gives you. Once you are in a position, implement a trailing stop loss system that takes you out of your trades when each trend comes to an end.

This is how professional traders beat everyone else, and when you do this too, your trading will become much less stressful and your account balance will have a chance to consistently grow over time. - 23162

About the Author:

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Here are Penny Stock Tips You Can Use To Make Money

By Grant Dougan

Penny stocks are business share offerings made to the public by companies that are too tiny or new to have a listing with the major share exchanges. These offer high growth possibilities, and your initial purchase can be quite small, but you stand the risk of the business becoming bankrupt and you losing your investment. People are drawn to these kinds of shares due to the case that despite the risks you can see sizeable returns.

Obviously, when you're attempting to pick out a penny share to put money in in you are going to want to know some details about the organization. Just like purchasing other stocks, you are going to need to know the type of business they are operating and what business plans they have in the future.

One of the things that makes penny stocks so intriguing is the fact that most of the organizations issuing them are extremely simple. You will find many of these kinds of stocks that are companies involved with resources - their price will go up and down based on the value of the commodity.

As you might guess, penny stocks are considered to be high risk investments. Unfortunately there's always the risk that the company won't survive even with proper research.

Keep in mind that the financial reporting guidelines for penny stocks aren't typically as rigid as shares on national exchanges. One sort of penny stock is referred to as the Pink Sheets, there's almost no regulatory standards on penny stocks, no minimum accounting guidelines or reporting guidelines.

As you can imagine, due to this lack of standardization, this sort of stock is very vulnerable to manipulation and possibly even fraud. A common schemes is called referred to as a "pump and dump" - this refers to investors manipulating the price of stocks to increase and then dump all of their shares immediately and leave other people with big losses.

Don't let the above scare you off these sorts of shares! Penny stocks always have risks but also hold a sizeable potential for a large gain. There are lots of real, legitimate small organizations, and they have to get going somewhere. Tons of organizations that are classified as penny shares are headed to be a success in the future. Anyone who can spot out a valuable penny stock will get a large reward.

Remember that finding the right penny share will make you a sizeable payout.. Even if you were to lose on most of your penny share selections, the one winner will be such a great profit that you'll not remember about the ones that didn't work. - 23162

About the Author:

Use these penny stock tips and you will be on your way to making great cash in the stock market. Click Here to learn about a penny stock trading system that has been generating huge profits for the past four years!

Important Penny Stock Info

By Rashel Dan

Operating penny shares is like going into an auction. How does it start? An asking price is set at the lowest value and then when the bidding starts, the price rises. If you're the seller, you check your starting price and compare it with the current bid. If your selling price is met, you trade and then the transaction is closed. The difference with an auction is that the price doesn't go down. Stock prices do. Today there a number of techniques being developed to monitor your penny stock info and bidding.

Research - Any active stock investor would tell you that you have to do your own research. While penny stock advisors and brokerage firms help in facilitating your sale, it is always helpful to have your penny stock info ready when needed. The more you know, the better your opportunity to gain profit. The more you understand the trade, the lesser your chances of falling into the pit.

However, because of the availability of free information in the internet, it can be a bit difficult to make decisions. Especially if you are new to the business, experience is your better half. Be attentive and be very alert about fabricated information. This is a trading business and it involves money. You have to be able to know which penny stock info is reliable for your use.

Softwares are being developed to help small cap investors and stock brokers monitor the stocks. The moment your stocks are pegged, it can be a roller coaster ride. Thus you need to stay close to the facts and observe your investment in the penny stock market. Here are some tips and information about how the transactions are made:

- Buying Penny Stocks - Set your funds ready and be sure you'll be able to pay the shares and your stock broker's commission.

- Symbols - These are initials or abbreviations of companies that are selling their shares to the public stock exchange. This is standardized for easy management, inventory, and recall.

- Stock Exchange - The more dependable stocks are being traded in major stock exchange. Examples are NASDAQ, NYSE, and AMEX.

- Establish The Volume of Shares - Of course, you must be clear on your penny stock info sheets how much of the shares you want to buy or sell. But beware and don't fall into extra commissions being charged to you.

- The Open and Closing Dates. These are dates that you set your stock to be available for sale. This must also include active dates (dates when your shares are still open for bid) and the date when you hope to close your stocks.

- Selling The Penny Stocks - It is important to take note of the above mentioned - the volume of shares to sell, ticker symbol, names of the stock and the stock exchange.

- Share Price and the Dates - Again it is important not to miss out the selling price and the time span to which your stocks are active and open for bidding.

Of course, there's more. But this article doesn't intend to give you any penny stock info overload. Too much technical knowledge may not be a good practice. Take this investment carefully. Your penny stocks are good money and therefore delicate. Make haste slowly. - 23162

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Principles of Physics According To A Penny Stock Advisor

By Malcolm Torren

What if the penny stock advisor was a physicist? Would he have invented something beneficial for everyone? Or would he have created something for world domination? Would he be formulating new laws for the stock market for every one to gain? Or would he be outlawed for disclosing too much information to the public? How would the stock market look and sound like?

Interesting isn't it? You'd probably end up analyzing too much on some empirical formula and how it works. Perhaps you'd be challenged about momentum penny stocks. Is there really gravity in these numbers? What could be your learning curve? If the penny stock advisor was a physicist, would he be interested in the stock market just the same? What laws of physics could there be?

- Law no. 1 - What goes up must come down. Of course, the numbers will still behave as usual. Think of your penny stocks as bubbles. The smaller the price, the lesser its weight. Then the easier for it to float. When it gets bigger, the more volatile it becomes and the easier it bursts. Then you may lose the bubble forever.

- Law no. 2 - There are no horizontal lines, only horizons. A good penny stock advisor will tell you that your penny stocks cannot move sideways. It's only up or down. Therefore, if it goes up, you don't see horizontal lines but new and better horizons for you.

- Law no. 3 - Think big but start small. You start with a cheap small cap share and imagine it to grow bigger. But it needs energy if you want it to grow. Penny stock brokers will help bring in the investors to fuel the energy for you. At the end of the day, your profit is realized. This theory explains that with positive energy, your penny stocks can only grow.

- Law no. 4 - Time is inversely proportional with money. The longer you keep your penny stocks in, the more risky your investments become. Professor penny stock advisor can prove this by applying this fourth theory with the first law. If your penny stocks are subjected at a longer time at its current size and weight, it will eventually drop.

- Law no. 5 - The theory of the penny stock trajectory. What is a trajectory? A trajectory is defined when an object is thrown up into the air. Because of the magnitude of force it is subjected, it will take time before it comes down again. This imaginary curve is formed. With this curve includes the time factor when how long it stayed up and the distance it has covered with its travel. If the penny stock trajectory is perfect, an investor and penny stock broker would be able to pinpoint the exact time when the peak happens. Unfortunately, there is none.

The principles of the stock market can be compared to physics. But the difference is that the penny stock trading cannot be an absolute science. You cannot calculate risks accurately. But you can trace the irregularities of the trend. Your best fallback is your empirical analysis. That means your ability to decide. - 23162

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