Day trading strategies: the complete guide with all the advanced tactics for stock and options trading strategies. Find here the tools you will need to invest in the forex market

participants to gamble on the market. The factor of reliability will become
questionable. Also, you will not find brokers who don’t require these
details. On the other hand, if you find brokers who don’t ask these
questions, then you have to think about opening an account.
Well, an important thing about opening an account is risk disclosure. As a
beginner, you are likely to be mindless about this factor, but remember, this
is very important

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T
CHAPTER 21:
 
 
Application on the Commodities Market
rading in the commodity markets based on fundamental news and
analysis differs dramatically from the quick-natured technical
analysis, which often requires traders to shift from bullish to
bearish in the blink of an eye. Fundamental analysis provides slow-handed
guidance to traders. In general, the practice of entering or exiting trades
based on market fundamentals is a dawdling and tedious process,
demanding massively deep pockets and patience. Imagine being a
fundamentalist who identified oil as being overvalued near $100 per barrel
in 2008, or on the multiple occasion’s oil moved above $100 from 2011 to
2013. Initially, a trader selling a futures contract solely on fundamentals
would have either blown out his trading account, given up on the trade
before it paid off, or suffered a roughly $50,000 drawdown before having
an opportunity to profit from the correct analysis. This is because each
dollar of crude oil price change equals a profit or loss of $1,000 to a one-lot
futures trader. In 2008, the price of oil reached $150 per barrel before
suffering from a steep decline. On subsequent occasions, the suffering
would have been limited to about $10,000 to $15,000, but still a painful
endeavor.
If you are familiar with the popular commodity trading book Hot
Commodities, written by Jim Rogers, this slow-paced fundamental
approach is exactly what he writes about. Not all of us have the capital to
employ such a longterm view in the leveraged world of commodities, as

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Mr. Rogers does. Accordingly, before assuming commodity trading is as
“easy” as that particular book implies, you must consider the vast financial
difference in the reality of most commodity traders and the author.
Other than obtaining a big-picture consensus of the market makeup, relying
on fundamental analysis alone can be a daunting task for the average trader.
After all, it can take months, or even years, for traders to get their hands on
absolutely accurate fundamental information. By then, the markets have
already moved. Alternatively, during times in which markets are ignoring
fundamentals, it can take months, or years, for prices to revert to a more
equilibrium price.