Commodities Trading

Commodities trading for the day trader will be limited to those markets that show good intra day volatility, broad participation, and exhibit respectable intra day trends. In our opinion, the only commodity markets that should be considered for day trading are T-Bonds and currencies (Swiss Franc, Japanese Yen, British Pound, and Canadian Dollar). These markets have decent daily ranges, good trending characteristics, and large participation which may make it possible to profitably day trade.

Technical analysis in commodities trading is especially important for the day trader, as it removes the need to follow and interpret fundamental factors that may affect market movement. Weather, crop reports, and other fundamental news can virtually be ignored by the day trader as the current market price will already reflect all the news that is disseminated. The perception of the markets and the direction it takes is more important than the fundamentals for the day trader.

Trends can occur in all markets, and in the short term, may make certain commodity markets attractive for the day trader. Freeze warnings in O.J. and coffee, for example, may dominate their respective markets for that day and may offer large daily ranges. However, as these markets are less reliable from a technical analysis standpoint, and may have large volatility spikes on an intra day basis, the best way to participate in these volatile markets is by using daily data to follow these markets.

What makes our HLDayTrader
method extremely valuable, is its ability to be used in virtually all markets and time frames. Using one simple method for trading both intra day and daily data will erase the burden of trying to follow different trading methods in many different commodity markets. Browse through the following charts to see how easily HLDayTrader handles intra day and daily data. What a great way to trade!

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