Commodities - It's What's For Trading

Investors in the United States are still very much embedded in a long-standing equity culture. They have become more sophisticated over the years, and conduct their own technical and fundamental research of specific stocks in order to make thought-out investment decisions. However, investors of all types are quickly seeking opportunities outside the equity realm as their confidence in their investment and trading skills continues to grow. Those investors are now turning to commodities in record numbers, and they're using every possible financial instrument to gain exposure to physical commodity prices.

Commodities have been available to investors for decades, but why has their popularity grown so rapidly in recent years? The appeal is attributable to a variety of conditions, all of which will eventually make commodity trading as simple as buying and selling stocks, if it has not achieved that level simplicity to some degree already. Here's why:

1. Well-known media outlets provide heavy coverage of commodity prices

2. Certain commodities are affected by geo-political risk and natural catastrophes, and are therefore newsworthy

3. Investors want to diversify their portfolios into non-equity asset classes

4. Data has become cheaply and readily available

5. Brokerage provide extensive research coverage

6. Online brokerage firms are expanding into futures with reduced commissions

What's driving demand?

Investors continue to seek new opportunities beyond traditional equity offerings, but there have always been barriers to their participation in commodity markets. A general lack of understanding, inefficient access, and high agency costs for commodity investments have caused investors to look for opportunities in more traditional asset classes. However, those barriers are quickly disappearing, and commodity investments are beginning to be considered mainstream investments. Contributing to this effect are financial media outlets, the brokerage community, and growing concerns about current events.

Financial media outlets have become a source of information for retail investors, but have also become a source of entertainment. Some financial news channels may appear more professional than others, but they all have content that appeals to a wide range of viewers - from the novice investor to the sophisticated trader. Those media outlets help popularize commodities by focusing on spot prices, economic data, and exchange activity all throughout the day.

In addition to financial news reporting, media outlets provide continuous coverage of geo-political tension as well as natural catastrophes occurring all over the world. Investors can quickly gather detailed news about such events via the Web and television, allowing them to develop logical conclusions regarding the near-term impact on certain commodity prices. Those factors, combined with the underlying perception that emerging economies will require greater commodity consumption, will result in accentuated volatility in commodity prices.

Research coverage of commodities by major brokerage firms also helps promote commodities. Whether that coverage is in the form of equity-based sectors (i.e., stocks that derive their revenue primarily from activity in specific commodities) or in various instruments that provide exposure to commodity prices, investors are the target audience. Sell-side research is still very influential even after the Internet stock craze highlighted conflicts of interest. That is because such conflicts do not exist, or are not as apparent, in commodity markets.

Competition among brokers will also add to the promotion of commodities as investments. That competition will be based on their ability to provide customers with access to new investment opportunities, as well as tools that allow customers to make informed investment decisions. Commodity investment represents a new frontier for brokers because it allows them to expand beyond their traditional stock and bond offerings and into a complementary asset class. Brokers can expect to find a very receptive audience because investors are growing weary of stock performance.

How do we gauge demand?

Demand for commodities has become easier to quantify than ever before. It is exhibited through the success of "proxy" products, including mutual funds, equity index funds, equity index options, and commodity futures. Popular investments in the U.S. include the PIMCO Commodity RealReturn Strategy funds (symbol, PCRDX), the Energy Select Sector SPDR (symbol, XLE), StreetTRACKS Gold Shares (symbol, GLD), and more recently, commodity pools like the United States Oil Fund (USO). On the trading side, there are dozens of derivatives ranging from traditional commodity futures contracts, to options on equity indexes that track the performance of specific commodity sectors.

The PIMCO fund is a traditional mutual fund that passively tracks the performance of the Dow Jones AIG Commodity Total Return Index. The index covers the combined performance of a basket of commodities via their associated futures prices. The fund uses derivative instruments to gain direct exposure to that index. As of November 2008, the PIMCO funds had assets of over $7 billion since their inception about 4 ½ years ago,(1) well off its highs of over $12 billion earlier this year when commodity prices were rising in unison, but still an impressive amount. As of November 2008, there were at least 132 commodity-focused mutual funds with total assets of over assets of over $35 billion.(2) While mutual funds are good places to invest, they do not address the needs of more active traders. That's where Exchange-Traded-Funds (ETFs) and Exchange-Traded Notes (ETNs) come into play.

Partial List of Commodity-Focused Mutual Funds

Fund Name (symbol)_________________________Focus_________Net Assets ($, billion)____Inception Date

Vanguard Energy (VGENX)_____________________Energy________$4.97_________________5/23/84

PIMCO CommodityRealRet Strat Instl (PCRIX)______DJ-AIG Index___$3.88_________________6/28/02

T. Rowe Price New Era (PRNEX)________________Energy________$3.69_________________1/20/69

Vanguard Energy Adm (VGELX)_________________Energy________$3.37_________________11/12/01

Ivy Global Natural Resources A (IGNAX)___________Energy________$2.07_________________1/2/97

PIMCO CommodityRealRet Strat A (PCRAX)________DJ-AIG Index___$1.76_________________11/29/02

Vanguard Precious Metals and Mining (VGPMX)_____Metals________$1.69_________________5/23/84

Fidelity Select Energy (FSENX)__________________Energy________$1.58_________________7/14/81

Fidelity Select Energy Service (FSESX)____________Energy________$1.01_________________12/16/85

RS Global Natural Resources (RSNRX)___________Energy________$0.92_________________11/15/95

Source: fund sponsor's websites and Yahoo! Finance, data as of October 31, 2008

Until recently, the only way for most individual and institutional investors to quickly access the commodities markets was to purchase stocks that focused on specific commodity sectors. That strategy was made much more efficient with the arrival of ETFs, which hold baskets of stocks in specific sectors. Low brokerage commissions, abundant liquidity, and all the efficiencies of an electronically traded product helped ETFs gain in popularity as both investable and tradable instruments. Even so, the funds are less than perfect proxies for commodities because they still carry the corporate risk of stocks they hold. The companies in a fund may also be engaging in hedging activity that dampens the correlation between their stock price returns and the commodities they produce. This paved the way for a new breed of exchange-traded instrument; one that attempts to securitize commodity prices and which is still available through ordinary stock brokerage accounts.

The StreetTRACKS Gold Trust, often referred to as the "Gold ETF," is a trust that primarily owns gold bullion. This is one of the best examples of how Wall Street is repackaging commodities into equity-like instruments. The investment objective of this trust is to issue shares that reflect the price performance of gold. The shares trade under the ticker symbol GLD on the New York Stock Exchange. The trust was launched in November 2004 by the World Gold Council, and by October 2008, it had net assets of about $17.6 billion.(3) But that is just one of a new stream of exchange-traded trusts and funds. Over the past year, Deutsche Bank, Barclays, and others have begun to roll out products in the energy sector as well as other metals. Even agricultural commodities such as corn and wheat are available to trade as stocks in regular brokerage accounts. Currently, there are at least 130 ETFs, trusts, and ETNs that track commodity price performance by way of holding stocks that produce those commodities, physical commodities, or futures contracts.(4) As of October 2008, those products represented almost $50 billion in assets.(5) Similar to the commodity-focused mutual funds, AUM levels for those products have also declined, not only because of redemptions in the funds but because certain commodity prices have plummeted. Even so, the sharp spike in asset growth up until mid-year underscores investors' interest in the asset class as well acceptance of fairly new instruments like ETNs.

Partial List of Commodity-Focused ETFs, ETNs & Trusts

Fund Name (symbol)___________________Focus________Fund's Holdings____Net Assets ($, billion)____Inception Date

streetTRACKS Gold Shares (GLD)_________Gold_________Phys. gold________$17.60________________11/18/04

Energy Select Sector SPDR (XLE)__________Energy_______Energy stocks_____$5.13_________________12/22/98

iShares Silver Trust (SLV)________________Silver________Phys. silver________$2.01_________________4/21/06

Oil Services HOLDRs (OIH)______________Energy Oil_____Stocks___________$1.86__________________2/6/01

iPath DJ-AIG Commodity Index (DJP)_______Mixed________Derivatives________$1.85__________________6/6/06

iShares COMEX Gold Trust (IAU)__________Gold_________Phys. gold_________$1.49__________________1/21/05

PowerShares DB Commodity Fund (DBC)___Mixed________Derivatives_________$1.26__________________2/3/06

PowerShares DB Agriculture Fund (DBA)____Ags__________Derivatives_________$1.17_________________1/5/07

United States Oil Fund (USO)_____________Energy_______Derivatives_________$0.80_________________4/10/06

United States Natural Gas Fund (UNG)_____Energy________Derivatives_________$0.79_________________4/18/07

Source: fund sponsor's websites as of October 31, 2008 or later

Securitized exposure to commodity prices is not unique to the U.S. To be sure, the London Stock Exchange (6) currently lists over 120 Exchange Traded Commodities while Deutsche Börse lists over 110 such products.(7) Every major stock exchange now lists some form of open-ended fund-like instrument.

In addition to the various funds and trusts available to investors, US options exchanges further expand the menu of choices by offering cash-settled options on indexes that focus on specific commodity sectors. From the Philadelphia Stock Exchange's PHLX Oil Services Index (symbol, OSX) to the International Securities Exchange's ISE-Revere Natural Gas Index (symbol, FUM), investors have additional flexibility to execute complex spreads quickly and cheaply. Although options now exist on some of the trusts and commodity pools listed above, cash-settled options on indexes themselves offer additional flexibility in how investors tailor their exposure to commodity price movements.(8) For example, an investor employing a strategy that involves selling in-the-money options will not have its position altered by being assigned. Rather, the European-style exercise of those index options will ensure that the position remains intact.

While there may be dozens of commodity-based funds and index options listed on exchanges over the next few years, let's not forget old-fashioned futures - the instrument of choice among hedge funds all over the world, as well as the core holding of many of the new commodity-based ETFs. Energy futures products have gotten a much needed facelift over the past three years, largely due to the demand from hedge funds as well as retail investors. That demand has futures exchanges scrambling to compete for those new customers.

In 2003, the New York Mercantile Exchange (NYMEX) began offering reduced-value versions of its energy futures contracts in an effort to target smaller investors. The contracts were branded "miNY" to capitalize on the popularity of reduced-value index futures called "E-mini".(9) In order to further capitalize on the burgeoning retail interest, NYMEX made the products available on the Chicago Mercantile Exchange's (CME) GLOBEX platform so that they may be traded electronically - well before its acquisition by the CME. Here's where the competition kicked into high gear.

In early 2005, the InterContinental Exchange (ICE) fired the first direct shot with its electronically-traded, and cash-settled WTI crude oil contract - the flagship benchmark of NYMEX. The listing of that product was in addition to its own crude oil benchmark, Brent crude, which was already an actively traded contract in Europe. Volume in the ICE's Brent contract is currently about 175,000 contracts per day while its WTI contract trades almost 283,000 contracts per day year-to-date.(10)

NYMEX responded, albeit slowly, by listing its full-size products on GLOBEX. Since their initial listing on CME, trading in the energy complex has grown from just under 100,000 contracts per day on average to currently about 550,000 contracts per day year-to-date.(11) However, trading in its Brent contract is virtually non-existent.

How can you practice trading?

Unfortunately, there are no "do overs" in your brokerage account, so where can you test your commodity trading strategies online? Investors may want to visit a "virtual trading" website to test trading strategies with real market data before putting real money at risk. Some virtual trading websites combine the functionality of a brokerage platform with order matching logic of an exchange. Traders can go long or short and accumulate virtual dollars. Traders can also hone their skills by competing with others in contests. In sum, virtual trading websites combine simulated trading and real entertainment to create a unique educational tool.

What happens next?

The number of investment vehicles and tradable instruments is truly astonishing, and there is no sign of slowing down. Investors can expect to see new products proliferate through the entire commodity spectrum, and a quick review of prospectuses on the SEC website already reveals many new products just waiting for regulatory approval. But that seems like only the tip of the iceberg when one considers the pipeline of new ideas being developed by investment firms of all sizes. So while you will have a hundred ways to trade crude and natural gas, all you fans of the movie "Trading Places" can take solace in that it won't be long before you can trade frozen concentrated orange juice - just as you would in any stock or index fund. In the meantime, check out a virtual trading site to get your feet wet in the virtual commodity pits before you start putting your real money to work.

Notes:

(1) See fund profile at the Alliance site.

(2) See fund summaries at the website of Lipperweb.

(3) See data from website of State Street's Streettracks' goldShares. State Street is the marketing agent for the fund.

(4) From fund sponsor's websites.

(5) From fund sponsor's websites.

(6) From the website of the London Stock Exchange

(7) From the website of Deutsche Borse

(8) Options on the streetTracks Gold Shares, GLD, were only available on options exchanges earlier this year in 2008 after the SEC and CFTC came to an agreement to allow trading in the products. However, at the time this paper was written, options trading on the iShares Silver Trust, SLV, as well as another gold trust, have yet to be permitted.

(9) "E-mini" is the name of a reduced-value futures contract branded by the Chicago Mercantile Exchange (CME); it was created to appeal to smaller investors, to be traded electronically as opposed to manually on an exchange floor.

(10) Statistics for ICE energy contracts are shown at the website of the Intercontinential Exchange.

(11) Statistics for NYMEX energy contracts are shown at the website of the New York Mercantile Exchange.

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Commodity Futures Trading

Commodity trading involves the exchange of primary products. It can be the buying and selling of future contracts in Gold, Silver, Oil, Gas, Platinum, Copper, Zinc, Cotton, Wheat, Corn and many more physical products. These row commodities are bought and sold in standardized contracts. The products are uniform; one of its quantity or fraction serves the same purpose as any other. Considering the following cases - a barrel of oil, an ounce of gold, and a bushel of wheat - one is pretty much like another. The most extensively traded and most liquid commodities are Oil and Gold.

There are some differences also. This difference is owing to shipping costs, differences in composition, etc. For example, some oil does sell for a diverse price than that from another source. Commodities are usually traded in the form of futures. It can be also traded on spot markets, where the trading is happened immediately in exchange for cash or some other good.

Commodity futures trading, also known as commodity options trading, creates a contract to sell or buy the goods for a fixed price by a certain date in the future. This contract period is the major reason of the huge potential for profit and loss. Future trading also involves all the exciting aspects of trading, as it intrinsically occupies predictions of the future and consequently uncertainty and risk.

The commodity futures trading puts some obligations on the buyers and sellers. The buyer is responsible for taking delivery and paying for the cash commodity during a fixed time period. The seller is responsible for delivering the commodity, for which he/she will be paid the price that was decided in the exchange pit by the dealers.

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Futures Trade and Futures Trading Business

American futures trading is an important part of the commerce of the American trading and stock investments for people around the world and to participate in American futures trading one must know that there are risks at all levels of trading and in all areas on the investment and trading platforms.

When trading futures you are basically speculating on the market of a particular commodity and wagering your investment in a way that you feel the market will eventually trend in the future. This investing process is known as futures trading as the title suggests.

The American futures trading deals primarily with commodities that are grown, developed, or made in the United States and its resources. Anyone worldwide may participate in the American futures trading market and do, but you should be apprised of the strengths and weaknesses of this business.

Even though the American futures trading is involved in U.S. products, the world market has definite effects on the outcomes of futures trading on a daily basis, so you must be aware that many factors go into the pricing of both buying and selling of the American futures trading transactions.

The futures trading market is not limited to any particular group of commodities. Futures are available in animals, vegetables, minerals and processed products, such as paper. If you have any in depth knowledge of a particular commodity, you may wish to begin your American trading of futures to that commodity and see how it is traded on the futures market. Futures again are a speculative business venture and what may be currently affecting a particular traded product may not be what is driving the futures pricing, so expand on your time line of what may be happening in the future rather than the current market.

There are numerous trading futures considered to be very advantageous and watched, traded, and speculated daily and some of the more recognized are the paper trade, paper trading, managed futures, futures research, online trading, free charts and quotes, hume course, soy beans, corn, natural gas, heating oil, wheat, gold, silver, top 500, hogs, orange juice, treasury bond, treasury bill, currencies, cocoa,l umber, sugar, euro dollar, euro, yen, indexes, soy meal, soy oil, canola, and platinum.

The risk of loss in trading futures and options can be considerable. Please be advised that futures and options trading may not be suited for everyone. You should carefully consider all risks in consideration of your financial condition when deciding whether to trade. You can sustain total loss of the initial margin funds and any additional funds that you deposit with your brokers to establish or maintain a position in the commodity futures market. We encourage you to ask plenty of questions prior to making any trades so that you have a full understanding of the risks involved.

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How to Get Started Trading ETFs

As with any investments, it is important to understand the product you are using in your portfolio. So before you decide to include ETFs in your investment strategy, you should understand the basics about Exchange Traded Funds or ETFs. I always say, "Know your tools!"

Know the Basic Definition of an ETF

ETF stands for Exchange Traded Fund. It is a fund that tracks an index, but can be traded like a stock. ETFs always bundle together the securities that are in an index; they never track actively managed mutual fund portfolios (because most actively managed funds only disclose their holdings a few times a year, so the ETF would not know when to adjust its holdings most of the time). Investors can do just about anything with an ETF that they can do with a normal stock, such as short selling. Because ETFs are traded on stock exchanges, they can be bought and sold at any time during the day (unlike most mutual funds). Their price will fluctuate from moment to moment, just like any other stock's price, and an investor will need a broker in order to purchase them, which means that he/she will have to pay a commission. On the plus side, ETFs are more tax-efficient than normal mutual funds, and since they track indexes they have very low operating and transaction costs associated with them. There are no sales loads or investment minimums required to purchase an ETF. The first ETF created was the Standard and Poor's Deposit Receipt (SPDR, pronounced "Spider") in 1993. SPDRs gave investors an easy way to track the S&P 500 without buying an index fund, and they soon become quite popular.

Know the Benefits and Risks of ETFs

Once you have an understanding about ETFs, you can learn how they work to your advantage. Understanding the benefits of ETFs will help you utilize the correct investment strategy when including exchange traded funds in your portfolio.

It is equally important to understand the disadvantages of ETFs. Before you buy or sell any investment product you need to know all the limitations of the asset. You don't want to have any misconceptions about an investment's performance and you need to understand all the risks involved. Here are some good articles to help you understand the pros and cons of ETFs.

Learn About the Different Types of ETFs

There is no shortage of ETFs. There are multiple Exchange Traded Funds for indexes, sectors, styles, and regions. It can be a little overwhelming, but if you have a better understanding of the major types of ETFs, it will help you narrow down which kind of funds will fit your investing strategy. Here are some of the major ETFs we here at Fusion Trading use:

ETFs

1. S&P500 SPDR's - SPY

2. PowerShares QQQ - QQQQ

3. ProShares Ultra Dow30 - DDM

4. ProShares Ultra Oil&Gas - DIG

5. PowerShares Gold Double Long - DGP

6. Direxion Large Cap Bull 3x Shares - BGU

7. Direxion Energy Bull 3x Shares - ERX

8. Direxion Technology Bull 3x Shares - TYH

Inverse ETFs

1. Short S&P500 ProShares - SH

2. ProShares Short QQQ - PSQ

3. ProShares UltraShort Dow30 - DXD

4. ProShares UltraShort Oil&Gas - DUG

5. PowerShares Gold Double Short - DZZ

6. Direxion Large Cap Bear 3x Shares - BGZ

7. Direxion Energy Bear 3x Shares - ERY

8. Direxion Technology Bear 3x Shares - TYP

Small list, big profit potential!

Decide On the Best ETF Investing Strategy

Are you investing in ETFs to gain exposure to a market sector? Are you using ETFs as a hedge against foreign risk? Do you want to trade ETF derivatives against your positions? Are you using fundamental analysis or technical analysis? Are you going to use a day, swing or position trading strategy? Are you going to use a trend or range trading strategy? Are you going to take advantage of Inverse ETFs? Before you adding ETFs to your portfolio, you need to decide why you are investing in the funds. Only then can you decide which ETF trading strategy is the best fit for your portfolio.

We here at Fusion Trading International use and strongly recommend Technical Trading. We primarily use a trend trading strategy mixed with a secondary counter-trend trading strategy. We use these strategies for day, swing and position trading. You must take advantage of all three if you want to increase your chances of success! You will learn all of these strategies and more...don't waste another minute without taking advantage of this amazing training program!

Take Control of Your Financial Future Today

Email me personally to receive your FREE "Guide to Creating a Professional Trading Plan"

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How Does Commodity Futures Day Trading Work?

What is commodity futures day-trading? Day-trading strategies are unique mechanical methods for entering a liquid commodity market early in the trading day and exiting some time later in the same day for a profit. Keith Fitschen has developed a family of day-trading strategies for the commodity markets that use the same basic market principle to gain systematic profits. The basic methodology uses multiple timeframe analysis to determine the likely trend for each market early in the trading day. When the likely trend is determined, entry is made in the direction of the trend. Trade exit is made in one of three ways: a stop loss point is hit (and the trade is a loss), a profit target point is hit (and the trade is a windfall profit), or the exit is made at the end of the trading day, usually for a profit.

Keith Fitschen's commodity futures day-trading methods are used in the most liquid commodities in each group: for the grains, wheat and soybeans can be traded; for the softs, coffee can be traded; for the currencies, the yen and euro-currency can be traded; for the metals, copper, gold, and silver can be traded; for the energies, crude oil, heating oil, and reformulated gas can be traded; for the financials, 10-year notes can be traded;, and for the stock indices, the S&P 500, the Russell 2000, and the German DAX can be traded.

Traditionally, the problem with futures day-trading strategies has been transaction costs: slippage and commission. These costs severely ate into the profit that could be made on a day-trade. But with the advent of deep discount brokers, and electronic trading, commission for a trade can be less than $10, and slippage for a trade can be as low as one or two ticks. This evolution has caused a number of successful trading system designers to promote day-trading strategies. Keith Fitschen's strategies are unique because they use the same market approach across all the groups, and because the strategy "works" on all the liquid commodities. This type of day-trading leads to an average profit-per-trade of about $150 across all the commodities, and a winning percentage of about 55 percent.

Normally, successful day-trading strategies have been sold to the public for $3,000, or more. This high bar to entry reduces the funds available for trading for a typical trader. Keith Fitschen's day-trading strategies are offered for a monthly lease fee. This allows a trader to avoid the large upfront expense and spread it over a long period of time, while retaining the right to stop at any time. This means of gaining access to the trading signals is certainly an advantage over the traditional approach.

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How to Make Money Online Through Forex Trading

Forex Trading is all about buying and selling of foreign currencies. These foreign currencies are traded in pairs e.g. EUR/USD, EUR/JPY etc. the most important thing to know in Trading is: Buy, when the market depreciates, and Sell, when the market appreciates. there are two ways to determine which currency to trade and whether to go long (Buy), or go short (Sell): Economic analysis and Technical analysis.

Economic analysis deals with Market Event alert that helps traders monitor scheduled market events throughout the Trading sessions. Most often, a trader does not have time to watch all events that can cause market to react. Market Event alert allows you to prepare yourself ahead of an event, to read pre-event analysis and commentaries and, if the event is to be followed with the release of economic data, to compare the data with the previous values. News and live discussions on chat channels, provided through the client application, are there to help you better understand these events.

On the other hand, technical analysis deals with indicators within the client terminal that helps traders to spot a trend during a market session. more common indicators include: stochastic, R.S.I, R.V.I, Moving Averages, candle sticks, etc.

Candlestick analysis is fast becoming the best tool in technical analysis because it enables traders to spot trends easily. Buy When the market is bullish, i.e. when the candle is white; and sell when the candle is empty or shaded. when the candle is going up, it means that the market is selling, therefore a good trader will go long(Buy). When the candle is coming down, it means the market is buying, therefore a good trader will sell that currency pair.

To start Trading Forex, you must be registered with a broker. There are countless number of Forex brokers online to choose from, and they only charge their commission through the spread. A spread is simply the difference between the bid and ask price. In Forex Trading, profits are calculated by the marginal pip increment. A pip is the smallest unit of a currency pair. Margin is the amount of money that is required of you from your broker on or before you start Trading. Different brokers offer different margin rates and leverages to their traders. The leverage is the amount of money that the broker is willing to offer you with, so that you can trade the highly voluminous Forex market. Other instruments that are trade-able are Gold, Silver, Oil and Gas, and Platinum, stocks, futures, etc. The list just goes on and on.

Forex Trading is no big deal like some traders emphasize, you can start making money immediately if you can relax in the comfort of your room for 30 minutes and analyze the market carefully with the tools discussed above.

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Information For the Blackdog Trading System

If you are looking to use the Blackdog trading system, then the following information may help with any queries you may have. The Blackdog Forex indicators are an ideal method to profit from the currency exchange and below show live test results from a 14 week trial. Here is a quick breakdown of the strategy:

- The markets you can trade depend on your broker. There are the obvious Forex pairs but some offer gold, indices, oil, gas and the Dow for example.

- Blackdog can be used with any timeframe and performs perfectly on each. This is ideal as if you work full time you can still make use of the daily charts or if you work at home the 1 minute, 5 minute, 15 minute, 1 hour or any time frame can be used.

- There are usually over eighty trades per month, however this can vary depending on how many markets you trade on as well as the time frames.

- The success rate has remained at a constant 70%+ over the last few years.

- The New York and London sessions tend to have the most movement and trades because of the high liquidity, however all currency pairs work very well so it does not matter where you are in the world or what times you trade. The Asian session is very good for Japan, New Zealand and Australia for example.

The above highlights some points you may have needed clearing regarding the Blackdog trading system, however for best results it's best to get your feet wet yourself!

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Oil Futures Trading - What You Need to Know About Oil Stock Trading

Oil is a non-renewable resource. Its demand is more than supply. Energy is most important resource for any economy. Just like human beings who need energy to perform the functions, economy also needs energy to run. Without energy an economy cannot function. Trading in energies like crude oil, natural gas and others is highly profitable. As such, its consumption is more than its production. Probably that is why oil is known as black gold.

Peak oil theory says that prices of crude oil will rise in coming years as it is a limited resource but the demand of oil will increase with time. It is simple; when the demand of certain thing is higher than the supply, the prices tend to increase. You just need to learn how to trade in this energy resource, crude oil, if you want to earn profit.

New York Mercantile Exchange (NYMEX) is one of the world's largest energy futures exchange. New York Mercantile Exchange trades in crude oil, natural gas, heating oil, gasoline coal, electricity and propane. Oil is pervasive as it is not only useful for industry, it is also necessary for an economy and also for financial market.

The rise in the price of oil leads to inflation in an economy. And this situation, i.e. inflation, forces the central bank of economy to raise the interest rate. So, it is said that when oil prices rises, even interest rate increases and when oil prices decreases, the interest rate also faces decline. They generally move in the same direction. The trends in oil market don't develop or change suddenly. You can easily earn a handsome profit by trading in it.

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Understanding the Fundamentals of Commodity Futures Trading

If we carefully look at the present business scenario then we could easily see that in recent time futures trading are gaining its world-wide popularity. In fact it is the most common trading found on many markets these days. As per the latest definitions- it is more like a trading of contracts called futures contracts, which facilitates the owner with power to trade the basic commodity at somewhere in the future for a fixed rate. Moreover, like stocks and options trading, futures trades are done in precise centralized futures commodity trading markets. However, depending upon the type of futures contracts, it can be broadly classified as commodity futures contracts and financial futures contracts.

In commodity futures contracts, trading of contracts end with a physical delivery. They may include agricultural commodity futures like sugar, oats, wheat, rice etc OR energy commodity futures such as crude oil, natural gas, etc; metals & stones like gold, silver, diamond etc. This means that if a trader is holding a futures contract and the time come when it expires, the appropriate payment will be made by the buyer, and the basic commodity (agricultural or energy) will be delivered by the seller. Whereas in financial futures contracts, trading of contracts end with a cash settlement and it include futures for treasury notes, bonds, mutual funds etc.

The futures contract trading can be executed electronically on electronic trading platforms linked to the major commodity exchanges or by the traditional open outcry method on the floor of the exchange. However, the basic form of futures contract is that it must state a location and date for physical delivery of the particular commodity. There are times when delivery arrangements are also specified by the exchange. This is particularly important for commodities that require high transportation costs, which in turn may affect the delivery place.

All those who are involved in commodity future trading must understand that for most commodity futures contracts, daily price movement limits are specified by the exchange. A limit movement is nothing but a move of price that can shift in either direction equal to the daily price limit. If the price moves down by an amount equal to the daily price limit, the contract is said to be limit down. And if the price moves up by the limit then it is said to be limit up. Price limits and positions limits generally aim to avoid large price movements deriving from excessive speculation. However, at times they act as an artificial barrier to trading when the price of the underlying commodity increases or decreases swiftly. 

Overall, trading with commodity futures is definitely a good way to make handsome money but there are some essential factors that one has to take care. It is highly volatile in nature and more likely to remain unpredictable mainly because of several factors like geopolitical concerns, contracted demand-supply fundamentals, growth and inflation pressures that put pressure on the global commodity market. It is a most interesting market environment but also a dangerous one as many wars have been fought and many nations & leading companies compete for scarce natural resources and food supplies.

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