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The trading process described in this course uses numerous tools (also called indicators or oscillators), as well as graph patterns and specific price behaviors that will help you trade better. These tools are used in an objective way to analyze the futures markets. There are three types of tools which are covered in this course; commodity futures trading selection tools, confirming tools, and timing tools.
Commodity Futures Trading Selection Tools are used to identify the best trade possibilities with odds in your favor.
Confirming tools tell you when the odds are heavy in favor of an up or down move.
Timing tools are used to identify when to get into and out of a market.
Each of these tools is described in a separate chapter. Although these tools will help you improve your odds of success in trading, no one can truly predict the price direction of a market. All we can do is react to ideal market conditions.
Note: Most of the various tools described in this trading course are also displayed in Commodity Price Charts. You must get a subscription to this service to understand how these tools are used. Reviewing tool behavior in relation to price is valuable for insight. Also helpful is a subscription to Investor's Business Daily (see "Appendix B. Resources" for subscription information).
In your market analysis, you need to use the commodity futures trading selection tools first because they will help you to identify the best possible trades to put the odds of a successful trade in your favor. These commodity futures trading selection tools deal with professional opinion, not price action. They can't time your entry point, but they are important because they help you to identify how to trade a commodity – either from the long side or short side. They will give you confidence that a sustainable price move is likely to occur, and which direction it will go. It is vitally important to only select trades with well-defined bull or bear markets.
There are several commodity futures trading Selection Tools that are used to analyze each market and determine which ones offer the best likely trading opportunity. These tools are:
A. Commercials (they are 80% of all market activity) B. Public (investor sentiment, newsletter writers, and you) C. Open Interest (mirrors commercial activity) D. Premium Market (suggests an upcoming bull market)
Note: Information about these tools and how they are used is only available in the complete Commodity FUTURES Trading CourseTM.
The next chapter describes Commodity Futures Trading Confirming Tools and how they are used.
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