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6. Commodity Futures Trading Confirming Tools

The commodity futures trading Confirming tools are used to give you a trading advantage, and will help you better identify when to get in or out of the market. You must first select good trades with well-defined moves or these tools don't work. Commodity futures trading Confirming Tools should only be used after selecting your best trading opportunities using the Selection Tools.

Note: All of these tools are subject to whipsaw and error.

The more confirmation you have about an ideal trading opportunity – as evidenced by several tools being in agreement, the greater the likelihood your original trading selection will see price move in the direction you anticipate.

These commodity futures trading confirming tools are only an indication of where the market may be heading. You should wait until 3 or more of these tools confirm your initial market assessment of where price may be heading before you take any action.

There are several commodity futures trading confirming tools that are used to analyze each market for likely trading opportunity. These tools are:

A. 10-Week Moving Avg (identifies a bull/bear market)
B. 14-Day RSI         (measures price momentum)
C. Stochastics        (measures price rate of change)
D. 14-Day ADX         (helps filters out false signals)
E. 7-Bar ADX          (longer term view of 14-day ADX)
F. Volume             (total number of contracts traded)
G. Moving Averages    (trend indicating tool)
H. Gaps & Limit Moves (identify objectives, opportunity)
I. Seasonal Tendency  (suggest recurring price activity)

Note: Information about these tools and how they are used is only available in the complete Commodity FUTURES Trading Course^TM.

The next chapter describes Commodity Futures Trading Timing Tools and how they are used.

6. Commodity Futures Trading Confirming Tools

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