Learn Commodity Trading Price Action Strategies

A trader must create a commodity strategy which they stick to when trading the online commodities market. A trader must have the discipline to follow the rules of their commodity strategy at all times. That is why it is better to come up with trading strategies that are profitable - profitable commodity systems will be a lot easier to follow & stick to. This is because a trader knows that by following the rules of their commodity system they will be successful.

A carefully designed trading strategy which has been back-tested and proven to produce profitable trading results is one of the keys to becoming successful when trading the commodities market. This type of strategy will make it easier for the trader to follow the rules of their commodity strategy because they already know that the trading strategy is profitable, therefore maintaining the discipline to continue following the commodity system will be much easier.

Successful commodity strategies will also include:

1. Commodities money management guidelines

2.Commodity Trading Psychology Mindset

These 2 will greatly improve the success of any commodities trading system.

However, Let us look at commodities trading price action strategy before explaining more about commodity money management & commodity psychology.

Commodity Trading Price Action Commodities Trading Strategies

Commodities Price action is the use of commodities trading price movements to determine when to buy or close trades. Commodities price action will use the study of commodity chart patterns that form time and time again and these commodity chart patterns can be interpreted in different ways. The trader will use this commodity chart pattern to determine the likely market direction that the commodity market is likely to take next based on the commodities trading price commodity chart patterns that have been formed on the charts.

In commodities trading price action traders may use different methods to generate commodity signals from the chart setups. Some of these methods are:

Candles commodities trading patterns - a trader may use the study of Japanese candlestick commodity chart formations which is the study of various candlestick formations along with how to interpret these candlesticks formations. A candlestick pattern may consist of only one commodity candlestick or a multiple of commodity candlesticks. To learn more about commodity candlesticks patterns traders can find these candlestick commodity chart patterns tutorials on the learn commodity lessons of this site under the commodity technical analysis concepts.

Support and Resistance Levels - traders can use commodities trading price action and combine this commodities trading price action with support and resistance levels. A trader will wait for commodities trading price to hit the support level to open a buy commodity trade and wait for the commodities trading price to touch the resistance level to open a sell commodity trade. The concept of trading major support and resistance levels is a very popular method in commodity. For example in a commodity upward trend a trader may wait & only open buy commodity traders when commodities trading prices hit support levels - at the same time a trader will take profit once the commodities trading price hits a resistance level and then wait for another pullback to open a buy commodities trading again.

To learn more about support and resistance levels traders can find these tutorials on the learn commodity lessons of this site under the commodity technical analysis concepts.

Commodities Trend lines - traders can also use commodity trend lines to determine commodities trading price action direction or the commodities trend. For an upward commodity trend line that shows the commodity market is trending up a trader will open buy commodities trades once commodities trading price touches the upward commodity trend line. For a downward commodity trend that shows the general market direction is downwards a trader will open sell commodities trades once the commodities price touches the downwards commodity trend line.

To learn more about how to trade with commodity trend lines traders can find these tutorials on the learn commodity lessons of this site under the commodity technical analysis concepts.

Commodity Trading Chart Patterns - commodity chart patterns is different from candlestick patterns, these are two different methods of technical analysis, and traders should learn more about commodity chart patterns in the commodity lessons section of this web site under the technical analysis concepts.

Chart patterns is the study of a formation of several candlesticks over a period of time. These patterns are consolidation patterns, commodity trend continuation patterns and market reversal commodity patterns. Commodities traders can use the study of these commodity chart patterns to determine the next likely market move.

Commodity Trading Strategy Tips

Once a trader has come up with their commodity strategy, they should also include the following so as to make their commodity strategy more successful.

1.Commodities Trading Money Management Rules

2.Commodity Trading Psychology

Commodity Trading Money Management Rules

Commodity money management guidelines should be part of your commodity strategy - these rules will help you as a trader to manage risk. This means that you will use two rules of commodity money management - these are risk : reward ratio & drawdown reducing technique when placing your commodities trades to determine lot size that you will open in the commodities market. The most popular commodity money management rule use in commodity & the one that you should also add to your trading plan is the rule that says a trader should never risk more than 2% of their account balance on any one single commodities trade.

To learn more about these two commodity money management guidelines, traders should read the commodity money management guide that is on the learn commodity lessons section of this web site under the commodity key concepts lessons.

Commodity Trading Psychology Mindset

In order to become successful when trading the commodity market a trader has to learn about commodity psychology. The commodity psychology or mindset that is required to become successful in commodity is one that avoids the emotions of fear & greed while trading the commodity market & is a mindset of total discipline that a trader will follow all their rules & their commodity strategy & only trade with signals which are generated by their commodity strategy. With discipline a trader will not trade unless their commodity strategy gives a signal. A trader will have the mindset of only following their commodity system 100% all the time without second guessing the commodity system. A disciplined trader will also not place trades in commodity market just because the commodity market has started to move upwards or downward, instead a trader will wait for a signal to trade to be generated by their commodities trading strategy.

In order to study more about commodity psychology and how to manage emotions while trading the online commodity market a trader can read the commodity psychology tutorials from the learn commodity lessons section of this web site under the commodity key concepts tutorials.