Creating a Commodity Trading System That Works
When creating your own commodities trading system, there are a few things to keep in mind. Your commodity strategy needs to be able to spot new Commodity Trading market trends, while at the same time making sure you don't to get faked out/whipsaws. The real trick is, once you have created a commodities system that works for you, stick to it. Being disciplined will help you a lot in becoming successful in commodity.
Before trading Commodity Trading on a live commodities trading account, you have to figure out what commodity strategy works for you. It is good to know in what chart timeframe you're going to be working in, & how much you are willing to risk once you start commodity online. All these factors should be factored in, & should be written down within your commodities trading plan. A good place to test this commodity plan would be on a free demo trading account. This is where you test your commodity strategies risk free without investing money to determine which strategy is best suited for you.
So, now how can a trader like you come up with a "good commodity system" or the "best commodities trading system"?
To come up with a good commodity strategy the first thing to do is to define your aim or goal:
The following example illustrates a goal and explains the commodity rules of how to achieve that goal
Commodities Trading Goals
1.Identify a new commodity trend
Moving average crossover method commodity strategy is the most commonly used strategy to identify a new commodities trend. The time to open a long or short trade is determined when 2 moving averages indicators cross over or cross under each other.
2.Confirm the new commodity trend
Relative Strength Index(RSI) Indicator and Stochastic Oscillator Indicator are the most commonly used commodity technical indicators to confirm a Commodities trend.
Indicator based Trading System
The best type of a commodity method is one that is indicator-based. You will find it straight forward to generate the commodity signals & thus less error-prone on your part & this will help you to avoid market whipsaws.
There are several things we want to achieve when creating a system:
- Find entry points as early as possible.
- Find exit points securing maximum gains.
- Avoid fake entry and exit signals.
- Proper Commodities Trading Money Management Rules
Finishing these four goals will result in a profitable commodities trading strategy that works.
The last piece of information needed, is deciding how aggressive you are going to be when entering & exiting a trade. Those traders who are more aggressive wouldn't wait until the commodities chart candle closes & would enter as soon as their technical indicators match up. But most traders would wait until the commodity chart candlestick of the chart timeframe they are using has closed, to have more stability when entering a the commodities market.
To get profits out of the commodity market you need to build your own profitable commodity system: a trading technique that will generate profitable commodity signals. You need to have your own commodity strategy that will help you achieve your financial goals. Sometimes the best trading systems are the ones that you build on your own. No need to keep searching online for best commodities trading systems or for commodities trading systems which work, this web-site provides you with all the commodity tools required to help you & guide you on how to create your own commodities trading systems.
Below is example of a Commodities trade system based on RSI, MACD and Stochastic.
Commodity System - Best MT4 Examples Trading Systems
The commodity system example above is comprised of four technical indicators in total, all of these generate Commodities trade signals using different methods, the moving average will generate commodity signals using the moving average crossover method shown, the RSI indicator, Stochastic indicator & MACD indicator use different technical analysis to generate the long and short signals as shown in the above example. How to generate these Commodity Trading signals is discussed in next topic (on the sidebar navigation study trading tutorials menu under key concepts).
For beginner traders, it's difficult for them to create their own commodities trading strategies since they don't have a lot of knowledge about the commodities trading market. However, this learn commodity website will explain how a beginner commodity trader can create their own free commodities system in just seven easy steps. Best strategy is the one you come up with yourself and learn how to trade the commodity market with it.
The main advantage of creating your own free commodities systems is that you'll know how to make profits by yourself - & not rely on other peoples efforts.
In the next lesson located at the sidebar navigation learn trading courses menu below the commodity key concepts will show you how to create a commodity system like the one above, write it's commodity rules & how to back-test the commodity system on a practice demo commodity account before using it on a live commodities trading account.
4 Examples of Free Commodity Trading Systems
Example 1: The Moving Average Crossover Method
The moving average indicator cross over method uses two moving averages to generate Commodity Trading signals. The first Moving average uses a shorter period & the second is a longer period.
Moving Average Crossover Technique - Moving Average Crossover Strategy
This above commodity method is referred to as the moving average crossover method because commodity signals get generated when the 2 averages cross above or below each other.
Commodity Trading System Template Example - Short and Long trading signal Generated by Trading System
A buy commodity signal or going long trade is generated when the shorter moving average indicator crosses above longer moving average technical indicator (Both Moving Averages Going Up).
A sell commodity signal or a going short trade is generated when the shorter average indicator crosses below the longer moving average technical indicator (Both Moving Averages Moving Down).
Example 2: Stochastics Commodities Trading System
Stochastic Oscillator technical indicator can be combined with other indicators to form a commodity system.
- RSI commodities technical technical indicator
- MACD commodities technical technical indicator
- Moving Averages commodities technical trading indicators
Trading Systems Commodity Trading Examples - Best MT4 Examples Trading Systems
Short Signal or Sell Trading Signal
How the short sell Commodity signal was generated
From our commodity rules the short signal is generated when:
- Both Moving Averages are heading down
- RSI is below 50
- Stochastic moving downward
- MACD heading downward below center-line
Short signal was generated when all the written commodity rules were met. The exit signal is generated when a commodity signal in opposite direction is generated.
Good thing about using such a commodity method is that we are using different types of technical indicators to confirm the commodity signals and avoid as many whipsaws as possible in the process.
- Stochastic - commodity momentum oscillator indicator
- RSI - commodity momentum oscillator indicator
- Moving Averages Commodities TradingTechnical Indicator - commodity trend following indicator
- MACD - commodity trend following oscillator
Based on the chart time frame used - this strategy can be used as Commodity Trading scalping system when the minute commodity charts are used or as a Commodity Trading day commodity system when hourly commodity charts are used.
Example 3: Trading System Commodity Trading Example
This system is fully explained within the commodities trading plan on the commodities trading plan lesson on this learn commodity web site under the Commodity Trading key concepts section located on right navigation menu.
Commodities Trading Chart Time Frame
1 hour chart
Trading Technical Indicators that spot a new commodity trend
Moving Average Crossover Trading Indicators Strategy
Trading Indicators that confirm the commodity trend
RSI indicator
STOCHASTIC OSCILLATOR technical indicator
Long Entry - Buy Signal
1. Both MA(moving averages) pointing up
2. RSI above 50
3. Both stochastics going up
Short Entry - Sell Signal
1. Both MA pointing down
2. RSI below 50
3. Both stochastics going down
Exit Signal
1. MA Technical Indicator gives opposite signal
2. RSI gives opposite signal
Risk Management in Commodities Trading
Stop Loss - 35 pips
Take Profit Commodity Order - 70 pips
Reward to Risk 2:1
Example 4: New Gann Swing Commodity Trading Chartist Plan
The Gann Swing Oscillator is meant to be used in combination with the Gann HiLo Activator & Gann Trend to form a complete Commodity Trading strategy commonly referred to as the - 'New Gann Swing Chartist Plan'. Within this methodology the Gann Swing Oscillator is used to help determine commodity market swings for trading only within the current market commodity trend is shown by the Gann Trend.
Below is the examples of New Gann Swing Chartist Plan
Gann Chartist Plan - MT4 Template Trading System
