Short Term Commodities with Moving Averages

Best Strategy

Short term commodity will use short commodities price periods like the 10 and 20 moving average price periods.

In the commodity example illustrated and explained below we use 10 and 20 Simple Moving Averages to generate Commodity Trading signals: the commodity signals generated are able to identify the commodity trend as early as possible.

Short-term Commodities with Moving Averages - How to Trade Commodity Trading with Moving Averages Example

Scalper Commodities Trader

One of the most widely used method of technical analysis used to analyze commodity chart trends in scalping is the use of moving averages.

The idea behind this moving average commodity indicator is to simply enhance technical analysis before taking a commodity signal to enter the commodities trading market. Planning and setting commodity goals in the short-term according to moving averages helps a scalper commodity trader to identify trends in the commodity market and thus open a commodity order accordingly.

Most of the commodity signals can be established using a specific commodities price period for the Moving Average Commodity Trading Indicator. The commodity Moving averages determines whether the trader will trade in the short-term or long-term. In addition, the commodities price action is above or below this moving average indicator it determines the commodity trend of the commodity market for the day.

If a large part of the commodity market commodities price is considered to be below the Moving average indicator, then bias commodity trend for the day is downwards. Most commodity traders the use the MA as support or resistance to determine where to open a commodity trade position, if commodities price touches the MA in direction of the commodity market trend a commodity trade is then opened.

The commodity moving averages are drawn and the intersection point with the commodities price can be used to determine the appropriate entry and exit times in the commodities market. Since there is always oscillation in the commodity market trends and the commodity market will repeat this process of oscillating and bouncing off the Moving Average, this can be used to generate buy or sell commodity signals.

Simple moving averages are calculated and their approach is based on the observation of the commodities price within a particular period of time using sufficient data to calculate it. Their interpretation has provided many commodity scalpers with lots of tips on how and when to open commodity scalping trading.

Medium Term Strategy

Medium term commodity moving average trading strategy will use the 50 period Moving Average.

The 50 period MA acts as support or resistance level for the commodities price.

In an upward commodity trend the 50 period MA will act as a support, commodities price should always bounce back up after touching the Moving Average. If the commodity market closes below the indicator then this will be an exit signal.

50 Moving Average Period Support - Commodity Trading Strategy Example

In a down commodity trend the 50 period MA will act as a resistance, commodities price should always go down after touching the moving average. If the commodity market closes above the indicator then this is an exit signal.

50 Moving Average Period Resistance - Commodity Trading Strategies Example

50 Day Moving Average Commodities Technical Analysis

As the commodity trend moves up, there is a key line you want to watch - this is the 50 day commodity moving average. If the commodity market stays above this 50 day commodity moving average, that is a good signal. If the commodity market drops below the 50 day commodity moving average in heavy volume, then watch out, because there could be commodity trend reversal commodity signal ahead.

A 50 day MA commodity indicator takes 10 weeks of commodity market data, and then plots the average. Moving line is recalculated everyday. This will show the commodity trend - it can be up, down, or sideways.

You normally should only buy when commodities prices are above their 50 day commodity Moving Average. This tells you the current commodity market direction is trending upward. You always want to trade with the commodity trend, and not against it. Many commodity traders only open orders in direction of the commodities trend.

Commodities prices normally will find support over and over again at this 50 day commodity moving average. Big investing institutions watch this level very closely. When these big volume entities spot a commodity trend moving down to its 50 day line, they see it as an opportunity, to add to, or start a new commodity trade position at a reasonable level.

What does it mean if your commodity instrument moves downward and slices through its 50 day line. If it happens on heavy volume, it is a strong commodity signal to sell. This means big institutions are selling their share, and that can cause a dramatic drop, even if fundamentals still look solid. Now, if your commodity instrument drops slightly below the 50 day line on light volume, watch how it acts in the following days, and take appropriate action if necessary.

Long Term Strategy

Long term commodity strategy will use long period such as the 100 and 200 MAs which act as long term support and resistance levels. Since many commodity traders use these 100 and 200 commodity moving averages, the commodities price will often react to these support and resistance areas.

100 and 200 MAs - How to Trade Commodity Trading Using Moving Average Commodity Trading Strategies

In Commodities, traders can use both fundamental analysis and technical analysis to help determine whether a commodity instrument is a good buy or sell.

In commodity technical analysis technique commodity traders looking to gauge supply and demand for a commodity instrument use the 200 day moving average to examine data in different ways.

Traders are most familiar with the basic commodity technical analysis of the 200 day MA which is used to draw the long term support or resistance level. If commodities market price is above 200 day MA then the commodity trend is bullish, and if it is below it then commodity trend is bearish.

One of the ways to measure supply and demand in commodity is to calculate the average closing commodities price over the last 200 trading sessions. This commodities trading moving average accounts for each day going back in time and shows how this 200 day average has moved.

The reason why the average 200 day MA in particular is so popular in commodity technical analysis is because historically has been used and it produces good results for trading in the commodities market. A popular timing commodity strategy is used to buy when the commodity market is above its moving average of 200 days and sell when it goes below it.

With this moving average commodity indicator, commodities traders can benefit from being notified when a commodity instrument rises above, or falls below its 200 day Moving Average and then commodity traders can then use their technical analysis to help determine if the commodity signal is an opportunity to go long or short.