Best for a Newbie

[ShoeshineBoy]

Quote from acrary:

Here's something that may be of interest. It's a ranking of futures markets for the past 5 and 10 years based on their trendiness. I chose trends persisting for at least 30 trading days since you're more interested in long term trend trading. Notice there are far fewer markets that have had 30 day+ trends in the past five years.

Thanks!

 

[Kermit]

Quote from ShoeshineBoy:

Now you've got me curious: why is orange juice better than other crops for a newbie? Is the issue access to information, historical trending, etc.?

ShoeshineBoy:

I mentioned OJ because it has been trickling steadily downward for the last 9 months after peaking about a year ago (which by the way was part of a multi-year downtrend).

Kermit

 

[Walther]

It is not a good idea to trade futures on anything that grows or poops .
Reports are not accurate and get revised often, grains moves are often based on weather forecast ( to rely on weather forecast in trading is insane )
Walter

 

[ShoeshineBoy]

Quote from Kermit:


ShoeshineBoy:

I mentioned OJ because it has been trickling steadily downward for the last 9 months after peaking about a year ago (which by the way was part of a multi-year downtrend).

Kermit

Sounds like the bottom line, like everything else, is that it is TA, TA and some more TA. (I would have guessed crops would be more yearly/seasonal and not have valid multiyear trends.) Time to find some charts...

 

[Kermit]

Quote from ShoeshineBoy:

I would have guessed crops would be more yearly/seasonal and not have valid multiyear trends.

That may be true to an extent, but I’ve found it tends to promote “seasonal bias” that can be a hindrance to trading well. Out-of-ordinary events (and its resolution) have a propensity to drive price to trend better like unrest in the Ivory Coast on Cocoa, or Hoof & Mouth outbreak on Hog prices or production/shipping problems in Russia on palladium. But other than these things, yes, TA rules, IMO.

Kermit

 

[ShoeshineBoy]

Quote from Walther:

It is not a good idea to trade futures on anything that grows or poops .
Reports are not accurate and get revised often, grains moves are often based on weather forecast ( to rely on weather forecast in trading is insane )
Walter

That's an interesting heuristic.

So I guess I'm left with metals, right (for achieving at least a minimal level of non-financial diversification)?

 

[-ooO-(GoldTrade]

Shoeshine Boy >, which commodity (or commodities) are known for the following?

1. Trending
2. Reasonably, low volatility
3. Information about fundamentals

Is there such an animal?

Aloha Shoeshine Boy. That’s easy. ”SpreadTrading!”

1. Trending “Seasonal Spreads!”

2. low volatility “Calendar Spreads!”

3. Professional information “Spreads!”

Jerry in his WSC! “Weekly Spread Commentary,” does a very effective job of putting us into Seasonal Spreads that have this years fundamentals in our favor.

Fine a specialist that you trust, and then trade on their information. Over time, you will learn how to adapt it to your personal trading style. You do not need to be crunching all the numbers yourself. GO take a drive in the Porsche. GO to the Beach, look at something pretty. Do not make this harder than it has to be.

Spreads are for when you want low risk with consistent profits and frequent windfalls.

There is no way you can get as much profit per margin as you can from Calendar spreads.

Acrary> Notice there are far fewer markets that have had 30 day+ trends

Acrary is right as far as he went. The problem is he did not go far enough. If Ac had studied, the spread relationships between all the different Commodities, and all the different months every day for as long as we have data. He would see that the spread relations are pretty consistent and usually run moore than a month.

Look! You plant crops at about the same time every year. There has to be more of a surplus at harvest than when you plant. The life cycle of animals is in harmony with the availability of cheap food. The life cycle of both plants and animals is over one month long, so why can’t he find reliable, consistent patterns to trade?

It does not take a Nasa scientist to see the pattern is there and it can be traded.

Walther> grains moves are often based on weather forecast

Walther brings up a good point. Trading Weather is short term and unpredictable. What we are doing trading Seasonal Spreads is relying on Climate. Got that Climate not weather. What time of year does a drought scare happen?

Not in winter, your drought usually happens in summer. So charts may show a bull spread is a better speculation. If the scare happens great. If it doesn’t so what. Maybe there will be a flood! Either way a bull spread will probably benefit if held during the weeks that catastrophe has occurred before.

Kermit> yes, TA rules

Yes, Kermit Technical Analysis, combined with the “seasonal bias!”

New Traders Take a look at our Spread Trading posts and see for yourself.

 

[condorll]

Quote from ShoeshineBoy:

I've got a feeling there's not going to be an easy answer for this, but I'll ask it anyway. My equity trading is starting to go well and so now I'm looking to branch out. I've started dabbling in forex but would like to look into "non-financial" assets as well. Besides forex and bonds, which commodity (or commodities) are known for the following?

1. Trending
2. Reasonably low volatility
3. Having information about fundamentals easily available to the Small Guy like myself

Is there such an animal?

Why spread yourself thin trading unfamiliar instruments?
You are "starting" to do well, so refine your systems and methods and do better.

Some traders make their living with 1 or 2 stocks. It is not the diversity of trading instruments nor the frequency of trading that counts, its the net result.

Good luck

 

[hanseng1]

Here is a weekly chart of wheat spanning a few years. If that's not a trend, I don't know what one is.

 

[T-REX]

DON'T DO IT!!!!

If what your doing is working don't stop!!! Leave the Cattle & Wheat & Soybeans alone!!!

I've traded hundreds of contracts in ALL of the major Commodities for dozens of clients. I know you probably wont listen but you will be sorry. You dont have the REAL fundamental data to trade these vehicles. If you dont understand the productions output details and ALL about the Ag producers supply & demand issues and US import Export tech's then you are at an extreme dissadvantage.