Bad Commodity Trading
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Transcript of Bad Commodity Trading
Bad commodity trading habits lead to bad
commodity trading results.
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Beginning traders will often start with simulation trading and they will do
great.
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When they switch to real time commodity
trading the same folks who posted record profits in the simulation world will
crash and burn.
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There are a number of reasons for on onset of bad commodity trading
and these reasons are not just limited to beginners.
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Trading psychology has a lot to do with good habits
turning into bad commodity trading habits.
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The old enemies of commodity trader, greed and fear, are not a problem when trading is not “for real” but raise their ugly heads
at the thought of making or losing real money.
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To help avoid bad habits that lead to bad
commodity trading it is useful to take Commodity
and Futures Training.
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It is also very wise to learn, practice, and use
the time honored technical analysis tools that made
rice traders rich in ancient Japan.
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Candlestick basics originated over three hundred years ago and this very insightful, very visual system of following
the commodity market can lead to very positive results.
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Using Candlestick charting techniques and Candlestick trading tactics can help the
trader stay away from the bad habits that creep into the best commodity trading strategy.
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Simulation or “paper” trading is basic to
learning commodities trading, options
trading, stock trading and the like.
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Trading software will have historical data that will
allow the trader to work in “real life” trading
situations.
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Using the time and psychological space afforded by these practice
sessions the savvy trader will develop a sound trading
strategy that can carry over to live commodity trading.
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Experienced traders will typically trade the same in simulated settings as they
do in live trading.
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The trap that will lead inexperienced traders into
bad commodity trading decisions is the impulse to
“wing it” once in a live situation.
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Here is where the use of a tried and true set
of technical indicators is necessary.
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Here is where learning the indicators and using them
is critical.
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Use of Candlestick pattern formations to predict the
commodities price movement has worked for
over three centuries.
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When the inexperienced trader enters into the real world of
commodities trading is the time to apply what he or she has learned
about the use of Candlestick analysis and not to forsake it.
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An excellent rule for a beginning trader to follow
is that if you don’t understand the trade,
don’t get into it.
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Because trading history repeats itself the use
of Candlestick patterns gives the trader a very reasonable
expectation of making a profit on a trade.
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What is required is the discipline to apply what is known at the right time.
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Using a well thought out trading strategy will lead to profits. Using the right
tools to make a profit reinforces the use of the
strategy.
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When the trader loses money on a trade when he or she
did not expect to it is time to reevaluate trading strategies,
not to wing in on the next trade.
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Practicing good trading habits leads to good
commodity trading and letting fear and greed get in the way leads to bad
commodity trading.
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Good trading goes with good management of investment
risk. Setting limits and keeping track of both success and failure will lead to good
long term results.
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