Futures price

Futures Price
By: www.CandleStickForums.com

A futures price in commodity
trading is the price on
which commodities traders agree
for a commodity futures contract
at a given commodity delivery
date. The futures price may vary
significantly from the current
market price, the spot price, for the
commodity.

The futures price of a commodity is
determined by the market’s
assessment of commodity supply
and demand in the coming months
and years. Traders will use
both fundamental
analysis and technical analysis in
order to predict prices and guide
their trading in commodities.

In beginning commodity futures
trading traders will be well served
by taking Commodity and Futures
Training. This training will be
useful for beginners and seasoned
traders.

Developing skill in the use
of Candlestick analysis will help
the trader anticipate futures price
movements and profit from the
inherent variability of commodity
prices.

Futures price variability is based on
projected supply and demand.
Eventually the commodity price,
the spot price, will be determined
precisely by supply and demand.

In futures trading of commodities
the use of technical analysis
tools such as Candlestick pattern
formations will help the trader
anticipate the market’s reactions to
changes in
fundamentals. Candlestick
patterns have been used for
centuries of commodities trading.

Because patterns are repetitive
both market trends and market
reversal can be predicted with a
great deal of accuracy. Using these
tools made rice traders rich in
ancient Japan and can profit the
trader in commodities today as
well.

In trading the commodity futures
of oil futures, gold futures, corn
futures, or in live cattle commodity
trading traders will need to watch
commodity news reports and the
current NYMEX commodity
futures price. This is part
of fundamental commodity
analysis.

The point is, obviously, to
anticipate changes in the futures
price of a given commodity. The
trader can buy commodity futures
and sell commodity futures at any
point during a futures contract up
until the delivery date.

Therefore it is possible to profit
from variation in the futures price
of a commodity even if it only
takes place over a few days. Staying
current with market fundamentals
will put the trader in the right
commodity market at the right
time.

Analyzing Candlestick pattern
formations will help the trader
execute trades at the most
opportune time for both buying
commodities and selling
commodities.

Commodities markets are made up of
many traders with many opinions
regarding the same fundamental
information. The sum total of their
trades tends to be repetitive and falls
into patterns. Successfully using this
information is the essence of
successful Candlestick trading tactics.

Another means of trading the
futures price of a commodity is
by trading options. A trader can
buy or sell calls or puts on
commodity future contracts.

As with all options trading the
trader who buys calls or put is
purchasing the option to buy (with
a call option) or sell (with a put
option) a futures contract at an
agreed upon price, the strike price.

Unlike with buying or selling
futures the purchaser of options is
not obligated to carry through
unless conditions are profitable. A
useful course for learning about
options trading commodities
is Options Training with Stephen
Bigalow.

Market Direction

What is the major advantage
candlestick investor's have over
other technical traders? They can
see what is actually occurring in
investor sentiment now! When
analyzing the market trend, there
is a very simple process for having
a relatively accurate feel for which
direction the market is moving.

What is the most powerful aspect of
candlestick analysis? The signals
themselves! The Japanese Rice traders
spent hundreds of years observing,
analyzing, and utilizing the signals
profitably. The assumptions are very
simple. Witnessing a bullish signal in
the oversold conditions as an
extremely high probability of
indicating a reversal is about to occur.

Friday, the Dow experienced a
Bullish Engulfing signal in the
oversold condition. This was
following a Doji two days prior.
Both of these signals were
providing indications the Bulls
might be trying to bottom the
market.

However, another simple indicator
is the T-line. The simple rule for
trend analysis is the trend will
remain in progress until the
appearance of a candle reversal
signal and a close above the T-line.

Today's trading made it obvious
the Bulls did not have enough
strength to push the market
through the tee line. What
assumptions can be made? The
downtrend is still in progress.

And the assumption can be made
the Bulls are starting to step in in
this area. The downtrend is still in
progress! Fridays bullish signal was
negated today. The strategy
becomes very simple.

Live Cattle

Futures price

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