Commodity Futures & Options Trading – Is This Stuff Blocking Your Way To Trading Success? – PART 1

Even when trading conservatively and slowly there is a tremendous amount of money to be made in commodities. Most new traders try to rush it and swing for the fences. You can often control $100,000 worth of commodities with only $10,000 of margin money in your account. (5%-10% leverage) Here’s how to take advantage of this leverage…and why those who abuse it lose their shirts.

Take your TIME getting into a market. Go SLOWLY when committing capital. Some commodity futures traders act like they’re in a race with the market. It’s like they must get into the market NOW before they miss the whole move.

The commodity futures contract markets have been around for over a hundred years and have had many bull and bear markets. What’s the rush? The market is a paradox in many ways. Instead of giving its biggest and cleanest move in the beginning, it usually does so near the end. The price climax is usually the fastest part of the move and comes near the end.

The beginning of a commodity bull move is sometimes a frustrating affair with plenty of false starts and double or triple bottoms. It starts as a creeping, chopping uptrend.. The futures market usually gives us many chances to buy a dip or sell a rally. It rewards those who take their time getting in and committing capital slowly. The overworked trading rule about patience is true.

It seems whenever I MUST get into a market, I lose. The best trades are when I’ve stalked them as they slowly set up for a market turn. Impulsive trading is akin to reckless gambling. Rushing in is the fear of missing out. When fear plays an important role in a trading decision, you’ve already lost.

Over the years I’ve known many retail commodity futures brokers. Some serviced my account and others I’ve 선물옵션 known working at various commodity brokerages myself. Ninety-nine percent of them are good people with good intentions. But like any profession, there are a few who can ruin it for the majority.

One of biggest problems I’ve seen is when the bad apple brokers create a “sense of urgency” to enter a commodity position. Maybe they mean well, but this contagious emotional state simply mucks up the calm, collected attitude we need to trade well. Taken to an extreme, it can be commission driven. A few broker’s goals go something like: commissions first, making clients money second, and account survival third.

They have it backwards. It should be account survival first, making clients money second and commissions third. If the commodity futures or options account does not survive, then there is no way to make money or produce commissions. But if the account survives, it has a chance to make money. If it makes money, then commissions naturally follow.

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