Commodity Trading Analysis

Analysis of the commodity trading markets is considered most important for the success of the trading business. Commodities are ranked or listed as per their availability, productions and requirements. The study provides investment advice, analysis and decision support to the commodity futures trader by way of real-time streaming charts, combined with minute details of the analysis. Information on food commodities is collected based on the quantities of local production, per capita consumption, changes in stock, exports, imports, seeds, industrial uses and depreciation. The quantities of commodities are usually received in tons per year. Data on local production are based on the production values, and import and export data of commodities are received from customs records, production boards and large distributors.

Analysis charts provide a visual and intuitive means of analyzing a market that is aimed at the trader, rather than the analyst. Profitable trading strategies are suggested and provided by way of text overlaid on the charts, in real time, and instantly accessible by a commodities future trader. Using Fibonacci wave analysis, the charts identify prime areas of support and resistance that enable the trader to anticipate the direction in which the market is likely to trade, and how far the market can be expected to last, as well as providing effective entry and stop-loss levels.
Lot of software is available designed and developed exclusively to help traders in many ways such as databases containing collective information of each commodity from different places across consecutive years, forecast charts based on various factors, profits based on these analysis, combining inter-market analysis and predicted moving averages to generate consistently accurate trend forecasts that give the trader confidence to take trades at the right time and avoid missing out on great trading opportunities. Analysis helps in setting up customer accounts and provides investment advice that is required to be appropriately qualified in relation to their particular functions and types.

Commodities provides detailed information on Commodities, Commodity Future, Commodity Brokers, Commodity Trading and more. Commodities is affiliated with Savings Bonds.

Learn About Commodity Trading

Have you ever heard investors mention speculating in futures of the commodity market and wondered what it they are talking about? While most of us are familiar with investing in stocks, commodities can be an interesting way to have your money make money for you.

But first, you might ask what is a commodity? commodities are goods we are each one portion is the same as the other. For examplee, oil is a commodity because one barrel of oil is the same as the next. Wheat is also a commodity each bushel of wheat is identical to every other bushel of wheat and anyone purchasing them could care less whether they get bushel number one or bushel number two. Gold is another example of a commodity. 1 ounce of gold is the same as the next.

There are some differences in some commodities to external forces such as shipping costs or differences in composition. For example, not all oil sells for the same cost because they may come from different sources were shipping is a consideration. Also they may trade on different markets where the pricing is different.

There are two ways that commodities are traded, in spot markets, or as futures.

Spot markets, refer to trades that take place literally on the spot. The commodity is traded right then and there, usually for cash but also could be for some other product or good. For example, if you want to buy an ounce of silver, you can go right down to the jeweler give him some cash and it will give you so. This is spot trading.

Of course, spot trading can be done in larger volume as well. Some traders exchange millions of ounces of silver or thousands of barrels of oil and then sometime later the actual goods are delivered.

When traders talk about futures or options it is not the actual good that is traded for rather a contract to buy or sell that particular commodity for a particular price a certain date in the future. This is how most commodities trading is done. This type of trading can have huge profits and also huge losses as it involves speculating on the future which can be full of risk and uncertainty.

this type of trading has been around in its present form since the late 18th century . Around this time farming became more modernized which allowed commodity trading to be profitable. Although this is an age-old way of making money, the basics remain the same today as they were in the late 1700‘s.

For example, wheat takes many months to grow. So at the beginning of the planning, the market price when the wheat is ready and speculated on. So if a farmer plants meet in May which will be delivered in September, the price at that time may be four dollars a bushel. If in June the price begins to fall, and the farmer feels the price will continue following, he may offer a contract on this week for the current price (lower than $4.00). Now if someone thinks that the price will go up over four dollars, then this contract will look like a pretty good deal and they may take them up on it.

Since no one knows for sure what that price will be, an actual prices based on such unpredictable things such as weather, this whole process Is called speculation. so now when September rolls around, the farmer delivers his wheat for the agreed on price. Now if the price has actually gone up to over four dollars and the speculator has made a profit. But, if in fact, it is fallen to wander the agreed-upon price he has lost money.

So there you have it, the basics of commodity trading.

Lee Dobbins writes for http://commoditytrading.subjectmonster.com where you can learn more about commodity trading