Commodity Futures Trading Using Fuzzy Logic and Market Synchronization Clues, PART 2

There's nothing better than fuzzy logic for determining when a commodity market has begun a new trend and is starting to synchronize. Read on to find out exactly what this is all about...

Observation From Trading Notes:

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"After an e-mini futures top forms over 1-2 days with big contracts and multiple tops, look for the last rally to labor up all day AFTER a sharp and fast down opening with poor A-D line. Key: It will spike or touch the 5 min chart channel one last time. This is the best place to short."

This is another familiar e-mini futures pattern. In this case it's a big set up for a big move. There are always some kind of preparations for a big move. Your job is to identify them. These are patterns that will repeat every 5-10 days or so. The anemic rally is the key. It's like the market is running out of gas and getting tired. That last stretch to tap the channel in a weakened state is an e-mini short trade you should jump on. It is a "high probability" trade.

If you stalk this trade, focused and patient, you will find your share of these kinds of set ups. Notice they are not rigid, computer system type patterns. Making sense of them requires the fuzzy logic of the brain that is looking at many indications and patterns at once. You will get to the point where you can simply feel you've been there before in a general way and know that this means a short sale.

There's no computer program that can do the same integration at this time. There will be someday, but for now the extraordinary commodity futures traders, the superstars who earn $millions+ a year, are mostly discretionary (fuzzy logic) people using computers to do the raw number crunching - the grunt work.

Good Trading!

There is substantial risk of loss trading futures and options and may not be suitable for all types of investors. Only risk capital should be used.

Commodity Futures Trading Using Fuzzy Logic and Market Synchronization Clues, PART 2

Commodity Trading - Trading Oil

Traditionally, commodity trading in petroleum products was a place where only the elite, super traders dared to venture. With barrels holding 42 gallons each and a contract minimum of 1,000 barrels, delivering oil was a task best left to the professionals. However, the petroleum trading landscape has undergone some dramatic changes over recent years.

For decades oil prices were stable, then in the mid 1970s the industry exploded. Technological advances and the political landscape contributed to the uncertainty, lack of stability, shortages and rising prices. Nearly 30 years later, prices have skyrocket to more than per barrel and the forecasters predict that in mid to late 2007 when it is expected to experience a slight decline for the next two years.

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However, there are no certainties when it comes to oil prices, but there are a few large scale factors that can minimize the risk by offering a reasonably accurate projection.

As demands continue to rise, other countries like India and China are also experiencing technological and cultural changes. The trend seems to be in an upswing with no indication of slowing, reversing or of being reversible.

India is riding in on the coattails of its western neighbors in regards to technology and business methods and is emerging in the 21st century. This brings with it an increased demand for energy, mainly oil based, so that homes, office buildings and manufacturing plants can be erected. Rural economy is getting a facelift in many areas as this movement brings with it such exponential growth which, in turn, increases the demand.

Demand is not the only piece of the puzzle, though. As India's purchasing power to obtain those goods increases, other growth is showing up as well. India has a wealth of inexpensive, highly educated work force which is being sought out for outsourcing of Information Technology, electronics manufacturing, communications and more. This is continued to grow and expand for at least another decade. One indication of this growth is the rapid growth of broadband throughout India.

China is a technological mega country with the largest mobile phone use in the world and a close second for the largest internet population. Energy is in demand throughout the world, but in China it is expected to rise steadily for at least the next decade.

Although China is perceived to be a Communist nation, social forces are causing it effectiveness to decline. As of yet, it is impossible to predict whether the repression will increase or decrease, but it is inevitable that the flow of information will not be stopped and it will reach the people one way or another, despite any government's attempts to block it.

The social changes within China seem to be somewhat proportionate to the increase in business there. Demand for energy is on the rise and new infrastructure, buildings and manufacturing plants are cropping up on a consistent basis. These businesses and growth all require energy, mainly oil based energy.

Demand continues to rise yet simultaneously supply rates are dropping off or have stalled. Temporary losses, such as with refineries, that occur as the result of disasters may be recovered in a matter of months, up to a year. However, North Sea oil production, which saw its peak in 2000, has seen a gradual decline. Until the time that political changes come around, releasing the massive reserves that are known to be in Alaska, it is not expected that there will be new discoveries of sources that will be utilized. Not many new sources are expected to be realized throughout the globe.

As technology leans in the direction of developing new forms of energy, there is no expectation that any of these sources will appear on the market for a period in excess of ten years. Fuel cell powered cars, which only account for 7% of gasoline use, are not expected to make an appearance for quite a few years.

Existing political pressures in the United States are hindering any hope of a change in the current situation. Waste disposal is one of the primary problems on the political forefront that shows no promise of a solution anytime soon. However, there are new forms of oil trading mechanisms that are evolving that allow the average investor to partake in a market that was at one time exclusive.

For example, e-mini futures on the CME allow for trading contracts that are half the traditional size of 500 barrels. Futures and options on the NYMEX remain at the 1,000 barrel size, yet they require less that 5% investment. These moves place these trades within the grasp of all types of investors. Commodities pools and funds such as those that are offered by Pimco and Oppenheimer allow investing lower amounts which are increasing their popularity.

This time in the marketplace can offer even the average investor a favorable risk and reward balance in oil commodity trading.

Commodity Trading - Trading Oil

History Of The Commodity Market

The commodities market is both a wholesale and retail market. The term commodity is a generic term for all natural resources used in the industry for the production of finished or semi-finished products, either as components or as energy entering cycle of production or delivery of the product. These markets are exchanged between other copper, gold, wheat, cotton and oil.

The players in this market are producers (farmers, mining companies, industrial ), financial institutions (banks, asset managers, institutional investors, hedge funds, etc.), corporations (as issuers in the primary market, or as investors), and individuals. Since the early 1980s, there was a strong development of derivatives (forwards, futures, options, warrants, swaps) so that today the bulk of trade takes place via these products. Generally, the commodities market, like other markets elsewhere, transactions take place either on organized markets or on the OTC market, also called OTC (Over-the -counter market).

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Organized markets, which are grants and futures markets are markets in which transactions are standardized (in terms of quantity, quality, maturity for merchandising, etc.) and there is no counterparty risk (that is to say, failure of the counterparty) due to the existence of a clearing house that comes between any buyer and seller and check their creditworthiness with daily margin calls. In contrast, the OTC market is a market where the buyer entered into the transaction directly with the seller. The transactions are less standardized, but also better fit the specific needs of operators.

The commodities market is now almost entirely paperless (more as paper) and electronic (very few transactions "open outcry"). Trade is mainly conducted via the CME Group, which contains the CBOT (Chicago Board of Trade), CME (Chicago Mercantile Exchange), NYMEX (New York Mercantile Exchange) and COMEX (New York Commodity Exchange). It is currently the largest trading exchange futures (contracts) with the widest choice of commodity contracts. LME (London Metal Exchange) and ICE (Intercontinental Exchange), formerly NYSE, are the other two major stock exchanges trading commodities.

History Of The Commodity Market

Commodity Option Buying - The Hidden Dangers PART 3 What The Option Pros Don't Want You To Know

The buying of options (verses writing them) is the most popular way most new commodity traders start out. Little do they know that over time, their chance for success is 10% at best. The option premium cost over a year is tremendous. Read how most pros use commodity options and how you should too.

There are special times when options can be bought. There are special reasons too. I've seen good buys when sugar is wallowing at its lows around 4-5 cents. Buying a nine-month-out call option near the money costs only 20 basis points. These are the times to take notice and buy options assuming you have a forecast showing a good rally. (or decline)

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Another good time to buy is simply when the option gets way undervalued from current market volatility conditions and you are looking for it to swing back to its volatility norm. Reverse everything mentioned above when buying put options. You want to see panic buying and short covering so that the put premiums are deflated, of course.

The market pays you for having skills that are better than the average trader. It also pays you for taking on risk. Buying a load of inflated options based on the crossover of a moving average and then sitting on them for a few months takes no skill at all! In addition, there is really no "unknown risk" being taken. Yes, you pay your option premium, but it's really your bribe to the market to make you feel comfortable.

The option writer is the guy really taking on uncertain risk and is feeling uncomfortable. The market usually will favor him if only for that reason. A smart pro writing options will then lay off some of his risk by hedging some future contracts (or opposite side options) against the option write. How can he make money doing that? He locks in money because you were willing to pay a higher than normal option premium and/or were willing to buy at the offer price, giving him some spread and premium slush to work with.

It takes no skill to enter and maintain a position when buying a load of options. None at all. But entering a market with a futures contract and staying on-board requires sharp timing skills and a forecast that works out without a large adverse move against you. The good part is you have all the time in the world for the futures contract move to take place! No ticking clock eroding premium like an option. (there may be a small futures carrying charge when long, but it works for you when short)

Someone might say it's a wash... the advantages outweigh the disadvantages. But I say if you are a skilled position trader, holding futures have a tremendous advantage over buying put and call options. Generally, beginners have few skills and pay the price by getting wiped out due to eroding option premiums.

Many brokers will encourage beginners to buy options because they are very low time maintenance and of little risk for them. The broker and client become cheerleaders cheering or gagging as they watch the news. Lots of "safe, no risk" entertainment for a few months. Maybe one or two out of ten trades work out. But the end result is always the same.

These traders eventually lose all their money to the option writers and simply fade away. Nice ride while it lasted. Next. Buying a load of options removes "responsibility" to the market. If you're wrong, the account erodes slowly (or quickly) while you're fat, happy and hoping for a miracle .

In contrast, if you're sloppy entering a futures contract trade, you get booted out on your rear end within a day or two. There is instant feedback and pain. There's hard work and risk servicing a group of futures trading clients. But that's the price that must be paid for the chance for higher probability market success.

More advanced option buyers like to do "free" option trades where they buy two, and then sell one or two to take in some buffer cash. This is actually a decent idea and can reduce expenses or lock in some profits when the market chops or backs off after a rally. However, your upside potential is also reduced. No free lunches. See my free course lesson # 26 for more details on "free trades."

Part Four of Four Parts - Next!

There is substantial risk of loss trading futures and options and may not be suitable for all types of investors. Only risk capital should be used.

Commodity Option Buying - The Hidden Dangers PART 3 What The Option Pros Don't Want You To Know

Commodity Day Trading - 3 Essential Tips For Commodity Day Trading

With the current volatility and market uncertainty in equities, many people have been looking to commodity day trading for their investment needs. Before you start commodity day trading, I have some helpful tips to relate to you that should be looked at in close detail.

1. Establish a Well-Funded Account: This is one of the MOST overlooked aspects of commodity day trading. Studies in the past have shown the more money you have on hand in your trading account, the more chance of success you will have.

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Why is this? You need to have a well-funded account when trading because you have to be able to have a margin for error. Not every trade you make will be a winner; you will have losers. In commodity day trading, what matters is limiting your losers and letting the winners run.

2. DO NOT Over-Leverage Your Account: Many people who want to begin commodity day trading will start to look into the lowest margins they can get, specifically for the e-mini stock indices. Some places may be able to give you day trading margins as low as 0.00. It's fine to use this day trading margin, but DO NOT overdue it.

If you are starting trading with a ,000.00 account size and are using a 0.00 day trading margin, do not look to use up every penny in your account and trade 9 or 10 contracts at once. This is suicide, and most likely, your account will go into debit fairly soon.

As a general rule of thumb of using leverage in trading, I NEVER recommend using more than 20% of your account equity toward one trade, in the case that would be 2 contracts at a time.

3. Trading the Commodity Markets IS NOT a Get Rich Quick Scheme: In fact, there is no such thing as a "get rich quick scheme" in any industry (besides the lottery of course, but then again, try making a career out of that...). When trading is practiced in good principle, you can experience good returns.

You have to realize that you are trading the markets in a short-term time frame. The shorter the time frame in commodity day trading, the higher amount of volatility you will experience. The higher the volatility there is in the marketplace, the higher the risk you take on and the higher the potential reward you are aiming for.

Trading is a practice that should be exercised only when exhibiting great discipline. These 3 rules will get your mentality started in the right direction, but there is much more to learn in order to become a well-rounded day trader.

Commodity Day Trading - 3 Essential Tips For Commodity Day Trading

Commodity Mutual Funds

If you are interested in commodities than investing in commodity mutual funds can be a good option for you. Especially if you are new to investing and don't want to take too much risk in commodity investing than you can always think about investing in  good commodity mutual funds.

21st Century belongs to the commodities. Last year in 2008, you must have observed how the prices of various commodities had skyrocketed. What could be the reason? As the global economy expands and new countries enter the list of emerging markets, the demand for raw commodities will skyrocket. Supply is finite so this will push the prices of the commodities sky high.

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There are experts who believe that the secular bull market in the commodites is already underway. Secular bull markets are supposed to last for a few decades. This makes commodity investing something to be not missed by serious investors. Many commodities are traded through futures contracts.

But for new investors trading commodity futures can be risky so the better bet is to invest in commodity funds. Now, you must be knowing this that mutual funds are barred by law to avoid risky investment strategies. So mutual fund investment is considered to be less risky.

How do you find good commodity funds? Use the best resource on mutual funds: MorningStar. Go to the MorningStar website, you will find a lot of useful information about mutual funds, the latest news, informations about fees and expenses and so on. Morningstar has got a five star rating system that is considered to be excellent. So by visiting the MorningStar website, you can make a list of top five commodity mutual funds in the market.

Now make a list of questions like who manages the fund, what is the track record of the fund, what are its fees and expenses, what securities does the fund invest in, what are the investment objectives of the fund, what are the risk involved in investing in that fund and so on. You can get some of this information by reading the funds prospectus. Good news funds love to send their funds prospectus free.

So after making a list of top 5 commodity funds, you can read the funds prospectus and further narrow down the list to make your decisions about the best commodity mutual funds that fit your investment needs and objectives!

Commodity Mutual Funds

Mutual Funds products, the best way to invest your money

If you want a bit 'of money you invest, you might consider investing in commodity funds. This investment is as potentially rewarding, because they provide a hedge against inflation. That is to say that the prices of goods go hand in hand with inflation. This is a fact that there are less expensive, many investors do.

What is a commodity? This is something that is usually grown, or from the earth, such as wheat, rice, oil, minerals and metals,Livestock, etc. Some of these goods are traded on the stock market, which include crude oil, wheat, just to name a few. Raw materials goes hand in hand with the economy of a country and therefore inflation. The raw materials are consumed quickly makes the price variable.

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When inflation rises, the stock price falls. This makes loan to a company by the banks or lending institutions are very expensive because of rising interest rates. This then makesThe earnings per share to fall. As an investor, to cushion it against themselves (the relationship between equities and commodities), you should invest in commodity funds. There are two ways to do this, Oppenheimer Real Asset Fund and Pimco Commodity Real Return Fund.

For option Oppenheimer, uses U.S. government bonds, inflation protected, even if not used by PIMCO Inflation-protected bonds. They are probably the Oppenheimer fund into a hedge inflation. It 'also a good idea toHis research on other options you might have before investing in commodity funds.

Mutual Funds products, the best way to invest your money

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The purchase and sale of commodity futures

Buying and selling shares because the company was born to find a way to raise capital. Assume joint responsibility and collected donations for the building expansion, etc. The stock market has developed what we see today. The purchase and sale of goods came about because the company wanted to manage and transfer risks. The commodities market is what we see today developed. There are great opportunities for profit, but the risk is even greater. What happens in the futures market isobserved throughout the world. The task determines the value of the goods.

Those who run the risk of investing in the futures market and commodity they want those who are willing to risk are called hedgers. Those who are willing to risk the futures market of raw materials, in the hope of accepting big profits are involved, are called speculators.

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Futures contracts are standardized so that they can meet the needs of both the buyer and seller to meet differentTypes of goods and financial instruments. In commodity futures will be given as follows:

* Quantity
* Delivery
* Quality
Price * (variable)

With standardized contracts, the contract may be exchanged for other contracts. This eliminates the need to actually deliver or accept delivery of a particular product. An equal and opposite position in the futures market was created. Sell ​​offset or close a long position or buy. The purchase of offset oris followed by a short position or sell.

To calculate a gain or loss of a future position, follow the following formula.

Sale price - purchase price x contract size x number of contracts = Profit or loss

Purchase and sale of goods is attractive because of the potential profit. Not for the faint of heart or those who do not have the money at risk. Getting Started in debt, is to reduce the savings or a pension fund is not advisable. When you invest in commodities, there are oftena minimum investment of $ 5000. This may be lost in a short time, but also win big in a short time will be realized.

If you are sure you are ready, commodity futures add to your investment portfolio and the minimum of $ 5,000 for an investor, contact the New Century International are experts. There are many advantages, a new customer Century International. The advantages include excellent customer service, call fast and live quotes.Contact to invest to get a new Century Financial Expert International started today.

The purchase and sale of commodity futures

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How To Get Started With Commodity Training

Commodity trading is an exciting investing opportunity that was once limited to brokers but that thanks to the internet anyone can play in. Here's how to get started with commodity trading.

Commodity markets move primary or raw product which are traded on commodities exchanges and it's important that you know how to get started with commodity trading so that you learn how to buy and sell commodities.

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The internet has opened up the commodity market and primary products like sugar, corn, precious metals, and so much more are being traded online. Commodity marks deal with non financial instruments like bonds. Once you know how to get started with commodity trading you won't have any problem deciphering the different categories.

Prior to online trading there were places designated for commodities exchanges. You would have to appear there or have a broker that would negotiate for the commodity you wanted. Needless to say how to get started with commodity trading was a lot more complicated.

Today finding out how to get started with commodity trading is available 24/7 on the internet with access being very easy both for learning and for buying and selling. There is no reason to have a broker anymore. The electronic age has certainly changed how we do business.

One of the biggest perks now is the transparency of the price. The top 5 bids are displayed which allows for fair trade. It also makes it easier to learn how to get started with commodity trading.

Commodity investing is an investment that can make you some nice profit. But of course they also carry some risk. Learning how to get started with commodity trading and how to trade right will give you the least amount of risk.

There are all kinds of websites that offer commodity trading online. Generally there is a fee for setting up an account. Some even have a minimum amount that you must put in your account. Most of these sights have a host of tools to help you learn how to get started with commodity trading and to help you make the best trades possible.

Commodity training online is a very lucrative business and if you really would like to move yourself into a different earnings class may we suggest you learn how to get started with commodity trading. You won't be sorry and it won't be long before you are making all the right moves.

How To Get Started With Commodity Training

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Commodity Futures Trading - why it was not for the average investor

If you do not mind losing $ 5,000 in 10 minutes, you can enjoy the commodity futures trading. There's an old saying among commodity traders: "It 'just a small fortune in commodities make it easy to start with a large fortune." This is not a business for people who are emotionally, are connected to their money, but thousands of average "investors" in commodities markets for years to get baits years. Why? Because of the possibility of high percentage gains with the built-in leverthat both the Commodity Futures Traders.

The commodity markets are wheat, corn, soybeans, pork bellies, gold, silver, oil, wood and many other items of common commercial policy. Large companies operating in these markets use commodity "futures" contracts to lock the selling prices of products before delivery. This approach is called "hedging". On the other side of the transaction, the merchant speculates that if the goods are pricedup or down before the contract for delivery. Since contracts can be purchased with leverage, these financial instruments lend themselves to speculation.

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For example, the control of a contract of corn, valued at $ 5000 only $ 500 of real money requrie or 10% of the nominal value of the contract. If the grain goes in value, and the contract has a value, say, $ 5,500, the speculator has made $ 500 on his back the original $ 500 for a 100%. Comparison with the stock regularMarket, leverage limits of 50%, so that requires $ 5000 shares worth at least $ 2,500 in capital. If the stock rises to $ 5,500 in value, is to win the $ 500 against $ 2,500 invested, for a return of "only" 20%. The return is 100% sure a lot better, right?

One can easily see why investors are looking for quick profits hypnotized by the lure of big profits with the highest trading commodity futures. The real problem is that leverage works bothDIRECTIONS. It is possible the entire investment in a few minutes through the turns wild price that sometimes occur in these volatile markets to lose. Suppose that the contract is $ 5,000 to $ 4,000 in value instead of increasing. They have not only the original $ 500 you have lost the contract in place, but an additional $ 500. You can quickly go broke in this way.

So why do people play this game? Investors do not mean to wake up and say, "Okay, I think I start tradingRaw materials. "What happens is they get a sales pitch from a commodity trading" gurus "who claim a" system "to create an infallible wild profits in this market. These" systems "in price from $ 25 to $ 5,000 or more and are based on the promise of "huge profits" from selling a small initial investment.

Writers newsletter or commodity gurus regularly pitch the myth of turning $ 5,000 into a million dollars in less than a year. The typical commodity systemBad luck comes in a long sales letter or brochure that describes a method for the extraction of "9 out of 10" or similar trades inflated.

Of course, if it were possible to trade successfully for 90% of the time, a person could easily raise millions of dollars in a very short period of time. Because these people are so anxious for you to spend $ 195 on their super-duper trading course? Because you probably do not make money with their trading program! And 'much safer to make moneySales of other, on the concept of the Commodity Futures Trading.

There is no sure way to make money consistently in these markets, simply because the underlying commodity prices can fluctuate wildly back and forth depending on a complex set of variables, many of which are completely unpredictable. Therefore, only the money people are constantly in the commodity markets, the broker to collect a commission, regardless of the execution of the operation if they have won or lost. Sinceare also a handful of successful professionals who live in these markets. But the vast majority of people who dabble in commodity futures lose money.

Unfortunately, with the lure of big returns and easy money, enter into a fresh culture of innocent traders market each year, only to be fleeced of their money in a hurry. Do not be one of them! Let the professionals at Commodity Futures Trading and keep up with the tedious forms of investment such as mutual fundsor stocks and bonds.

Commodity Futures Trading - why it was not for the average investor

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Commodity Tips

Commodities market MCX and NCDEX is on the market, with metals and agricultural products. The metals in the commodities market to be exchanged are gold, silver, copper, zinc, lead, nickel and aluminum, with the exception of these metals on the market includes the trading of energy products such as natural gas and oil. Because the market expects the exchange of some of the precious and base metals made to be the most dangerous in the world of the stockMarket. The Agri-products in this market include cumin, cardamom, cucumber, soybean, Gaurseed, pepper, turmeric, etc.

This market is considered the biggest risk in the industry and traders in this market are eager to earn much profit from the investments made by them. The only thing you should note that these operators keep their feelings aside, and after consulting the best on the market for trade. Since the market is with a lot of riskpeaks, those companies with a team of analysts and experts to come up with the best methods for a particular business advice from the market. commodities market has taken a market, where we can say that certainly we have a lot of providers of advice and have left their customers to make more profits.

Commodity

There are many companies in the market, towards the provision of advice to work around them the raw materials marketwith calls for several specific areas of raw materials like gold bullion as they are called, and agriculture is gaining importance these companies in their sector for the provision of such calls, with a yield of 80-90% accuracy. These companies are just a few to mention, and earn fame both in the provision of advice in the bars anymore. In addition she calls you in the precious metals bullion, base metals and energy markets. This service is critical for the long-term bullion dealer. They alsoMCX offer suggestions.

They do a lot of time to get into our conversation, so you can maximize profits. The market has a lot of movement and the dealers are always very enthusiastic, more and more profits, but the point is, keep in mind while trading in the commodities market is to keep away the emotions and practical work in the industry has to gain. You should put confidence in the council more accurate and more reliable by the company.

So if you intend to investCommodity markets to experience the most authentic information provider and as accurate as the money they invest in themselves, to evaluate first.

Commodity Tips

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