Best long plays: Oil, gold, corn, sugar, cotton, soybeans

A quick question: How can you trade short-term and use fundamental insitutional research? I'm not attacking you here, but isn't fundamental generally support a longer term view?

With $25K you might want to buy into long only commodity fund, if your research gives you such bullish view on those commodities.

If you do trade short-term and use future contracts, you'll have to roll the contract every couple months and take a hit on short-term volatility?
 
do some google work and you may find that a large NY bank was enlisted to pound nat. gas from $15 to $7 in eight consecutive trading days earlier this year....

recall that, mysteriously, Greenspan talked last year about the nat. gas "crisis" in Senate testimony....

I choose not to believe nat gas storage numbers either........for a variety of reasons
 
forttunati speaks wise words....

I stick to contracts that if I HAD to take delivery, I would actually like to own the stuff....

gold, silver, palladium.....etc.....

I'm not sure what I would do with 1000 tons of bean oil.....
 
Quote from daddyeaux:

do some google work and you may find that a large NY bank was enlisted to pound nat. gas from $15 to $7 in eight consecutive trading days earlier this year....

recall that, mysteriously, Greenspan talked last year about the nat. gas "crisis" in Senate testimony....

I choose not to believe nat gas storage numbers either........for a variety of reasons
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Elaborate. I'm having trouble finding what you're referring to.
 
Commodity analysis based upon demand prediction almost never works-commodity pricing, for any commodity that is easily reproduced (corn, soybeans etc.) is dominated by supply issues. Why is that we seem to have corn running out of the elevators onto the ground, because supply is the dominant force in the market.

Ethanol will surely impact this but won't the market respond with increased supply? In a free market the price of commodities that can be reproduced, grown etc. will trend lower over time. Having said that I do think we could see higher prices for commodities like corn but I am not in the Jim Rogers camp either.

Why don't you just buy a commodity index like the Rogers Raw Material Index. It contains virtually every commodity and the weightings are more sensible than the GSCI.

If you really think that commodities in general are a value then buy commodities in general. To me it is very hard to trade value in commodity futures but buying a basket of long-date commodity futures or an index seems to make some sense.

Or buy a house in Nebraska in an Ethanol town, or buy a farm-you'll need more money for a farm though.
 
Great thread BrandNewTrader (added you to my "buddy list") and other participants. Ah, an intelligent discussion. On Elite Trader? What's the world coming to? :D
One thought is, don't let other people tell you that "you can't" trade this way and that way without a certain amount of capital. If you listen to that you're dead before you've even started. Although all markets are easier to trade with more capital. Just don't like the word "can't". The key word mentioned here was that it is "risk" capital. And the man is obviously an intelligent, thoughtful person and at the same time realizes trading success doesn't necessarily correlate directly to that. At least I think you realize that. If not, you should. You learn a lot about trading, and learn a lot about yourself really, from actually trading and being involved in the markets directly, not just from doing research, although this can be very helpful too, or not.
How's that for a run-on sentence? :D
The thing about research is, no matter how much you do, it can only point you in a certain direction and it may be the wrong direction. Ultimately the market is right. Period. There are so many variables that influence price movement in the market and they're greater than all the research anyone can do. Which isn't to say don't do any. And there are so many other things involved in actually trading the market even if you are right about the direction of the underlying issue you're trading. Things like position size, stops, etc. You only learn about trading, which is how you "get the money out of the market", from actually doing it.
 
Quote from BrandNewTrader:

Why am I doing this? I am a few years outta school and finally have $25,000 in ACTUAL RISK CAPITAL that I can afford to lose. (I lived a fast life after college.) My goal is to make as much as possible as quickly as possible. There are alot of diff markets out there, but it's obvious to me that the best place for me to make the most amount of money based on my capital size and risk tolerance is in commodity futures.

For cynics who doubt my judgement - yes I have no trading experience. But I'm not talking about trading techniques here. I'm talking about a fundamental/technical view on a market direction.

Would love to hear views on:

Short (1 year), mid, and long term (3 year) market outlooks on each product in the thread title. Please dont criticize the 3 year long term thing - Trying to "educated guess" market direction and behavior past 3 years is futile because of the exponential increase in the variability of random events. The same reason why long dated options are traded OTC by large institutions with massive amounts of capital and listed options aren't priced out past a few years - there's just too much risk.

None of this "fibonacci gann elliot wave optimized backtesting selective chart highlighting" bs either please. Plain english, straightforward sensical money-making discussion please. we're all grown-ups right?

oil, gold, corn, sugar, cotton, soy

Thoughts? =) [/B]
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Congratulations. The size of your account is fine, as long as you stick to short term trading techniques, maybe this is not what you want to hear. Here is someone who comments frequently on Gold. He advised readers of a possible top in mid May, then a cyclical bottom in mid June: http://www.billcara.com/

Here is someone with a simple trading technique involving a trendline break and MACD cross. He caught a long in gold in mid March, out in mid-May, now he has buy signals again. http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID530404

Gold futures (ZG) is $100 a point. A mere 40 point run up (or down) in gold makes you $4000 per contract. Start small and build up. But pay attention to technicals or you could lose your whole account in a flash. (how much would you have lost if you went long one gold fute at 720ish in mid-May?)

Best of luck,
Beachie
 
Quote from Beachie:

Congratulations. The size of your account is fine, as long as you stick to short term trading techniques, maybe this is not what you want to hear. Here is someone who comments frequently on Gold. He advised readers of a possible top in mid May, then a cyclical bottom in mid June: http://www.billcara.com/

Here is someone with a simple trading technique involving a trendline break and MACD cross. He caught a long in gold in mid March, out in mid-May, now he has buy signals again. http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID530404

Gold futures (ZG) is $100 a point. A mere 40 point run up (or down) in gold makes you $4000 per contract. Start small and build up. But pay attention to technicals or you could lose your whole account in a flash. (how much would you have lost if you went long one gold fute at 720ish in mid-May?)

Best of luck,
Beachie
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Good post. Thanks for the links, Beachie. And welcome to EliteTrader :) Notice, BrandNewTrader, he's talking about some technical analysis here. This is important. Your comment, "None of this "fibonacci gann elliot wave optimized backtesting selective chart highlighting" bs either please. Plain english, straightforward sensical money-making discussion please. we're all grown-ups right?" could be construed to show you think that only fundamentals are important in making money in the market. But as I mentioned you need to know how to actually trade and this comes over time with experience. As Beachie is mentioning, your research may have told you to go long gold, but if you did it at the wrong time, on a pullback, with such a small amount of captial, and bought too many contracts, and "just knew" you were right, and didn't use any stops, etc, you'd wash out your account and be out of the market. Just like that.
 
I have been doing alot of work on these markets lately, and the opportunities seem just too good to pass up. I'll share my analysis, and trade details. I watch all of the futures markets, so if you'd like me to add another, I'll be happy to do so.


Corn....Might Trigger a long next week....stay tuned

Sugar.....we are currently long from 15.93, stop is at 14.85 on a close.

Gold....no trade, need to close above 620.

Cotton we are short....no sense in fighting the trend. Short from 54.10. Stop is 59.25. I would S&R at that point.

Oil....no positions

soybeans....this market has been moving, but seems to have died down a bit. No trades here.

This strategy is designed to capture the short term trend over a period of a week to several months. The stops are fairly wide on these, but the expected profit is even larger. As always, do your own homework.
 
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