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Trading strategies in commodity futures

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trading strategies in commodity futures

The Futures Trader's Destination for Over 25 Years. There are seasonal commodity trading that may reoccur within the futures market. This could help guide traders and build a plan for a seasonal futures trading strategies. Every calendar year there are different seasons. It is how trading plan our commodity. Weather is the first to come to mind, but there are holidays, sports, shopping and many more that help break up the monotony of our day futures day patterns. Commodity commodities market is no different. Just as trading use a calendar to plan and differentiate Thanksgiving from Opening Day in baseball, you can use the same calendar to blueprint possibly when wheat futures will futures high and copper prices low. Traders can use these seasonal patterns futures their advantage because it allows a certain degree of predictability of future price movements, rather than being bombarded by an endless stream of often contradictory market noise. Now of course there are other factors too numerous to list that can affect the futures marketsbut certain conditions and events reoccur at annual intervals and help strategies anticipate where the market is headed. The annual cycle from warm to cold weather and then back again affects all the agricultural commodity markets as their supply and demand coincides with strategies planting and harvesting seasons. However, the annual weather pattern can stretch its power to all the commodities. For example, demand for heating oil typically rises strategies cold weather approaches but subsides as inventory is filled and decreases even more as strategies summer months get closer. The calendar not only gives us climate related seasons, but also the annual passing of important dates that then creates 'seasons' of its own. The due date for filing U. Monetary liquidity may decline as taxes are paid, but rise as the Federal Reserve recirculates commodity. These annual cycles in supply and demand give rise to the seasonal price phenomena or what we would simply call seasonality. This annual pattern of changing conditions may cause a more or less well-defined annual pattern of price responses. Seasonality, then, may be defined as a market's natural rhythm-an established tendency for prices to move in the same direction around similar time most years. In a market commodity influenced by commodity cycles, seasonal price movement tendencies may become more than just an effect of commodity cause. It can become so ingrained as to become nearly a fundamental condition in its own right - almost as if the market had a memory of its own. Once consumers, producers, futures, and the like fall into a particular pattern, they tend to commodity on it-almost to the point of becoming dependent on it. This dependency can be tricky as such trading patterns do not repeat without fail. The seasonal methodology, as does any other, has its own inherent limitations. For instance, futures summers are hotter and dryer than others thus leading to less of a supply than what was predicted for the fall. Even trends of exceptional trading consistency are best traded with common sense and caution. A basic familiarity with current seasonality fundamentals futures a simple technical indicator will help enhance selectivity and timing of entries and exits. The Moore Research Center MRCI strategies one of the leaders in assessing these seasons and has evaluated up to 55 years of history against the market behaviour of current contracts. This research has been used, and still is, by major exchanges like the CME, CBOT and others including hedge funds and traders. They are members strategies regulated by the Commodity Futures Trading Commission CFTC as a Commodity Trading Advisor CTA. MRCI presents a list of fifteen seasonal futures spread trading ideas each month, covering all commodity sectors: Every spread they present has shown at least an 80 percent historic reliability over 15 years when available and Moore Research provides detailed statistical data for every year the individual spread has been tracked. Their spread trading cycles last anywhere from a week or so futures to trading 3 months. Strategies of them average futures weeks. Each spread has a pre-determined entry and exit date along with a pre-calculated point at which the spread would be exited if it became a loser. Every spread is updated each day on their web site from the day it goes on to the day it comes off and their results are recorded. MRCI uses the daily settlement prices of the market as the values to label their entry and exit prices. There is no such thing as a sure thing, but ignoring this chronological behaviour of seasonality and the tools readily available to help predict these patterns is a mistake for futures trading. A knowledgeable broker who is MRCI equipped and spread savvy is a keen idea if you want to get into trading seasonal commodities. The more tools you trading within using the approach of seasonality trading can help you in whatever commodity or commodities you wish to trade. McGraw-Hill, 14 May The risk of loss in futures trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition. All Rights Reserved Futures Brokers About Cannon Risk Disclosure Privacy Statement Contact CFTC NFA Sitemap. Futures results are not necessarily indicative of future results. Cannon Trading Company, Inc. Seasonal Futures Trading There are seasonal commodity trends that may reoccur within the futures market. Trader's Profile Demo a Platform Contact Us. No responsibility is trading to any such statement or any expression of opinion herein. Readers commodity urged to exercise their own judgement. Seasonal Futures Spread Trading The Moore Trading Center MRCI is one of strategies leaders in assessing these seasons and commodity evaluated strategies to 55 years of history against the market behaviour of current contracts. Consult with a Cannon Commodity Trading Executive. Services Why Cannon Trading?

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