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How commodities may reduce risk and create opportunity for returns

 

 

5 COMMON MISTAKES of commodity traders/investors:

  • Being under-capitalized and/or over-leveraged

You may not be able to weather inevitable draw-downs.

  • Failing to grasp the cyclical nature of the markets

Successful trading methods are apt to stop working eventually, because markets are always changing.

  • Holding onto losing positions & cashing out of winning positions too soon.

In the long run, your gains may not overcome your losses.

  • Failing to grasp the 'Big Picture'

i.e. medium to long-term 'shorting' in a secular bull market may be dangerous.

  • Not keeping things simple.

A trading system must have simple rules.  Complicated systems rarely work if at all.

Value Investing in Commodity Futures
Hal's latest book introduces the futures trader to the world of scale trading, including how to do fundamental analysis for different market sectors: grains, livestock, metals, softs and energies. Check it out!
More information >>

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  Please remember that commodity trading involves a high degree of leverage. That leverage allows for large returns, but also large losses. Due to the high degree of risk involved in high leverage, you should carefully consider whether commodity trading is appropriate for you.
Past results are not indicative of future results.

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