How to Learn Commodity Trading Strategies

Once traders have completed learning about the basics of the commodity market, this may include basic commodity terms and basic commodity concepts such as commodity instruments, exchange rate, commodity quote, commodity spreads, commodity pips, commodity leverage and margin traders should move to the next advanced step of learning about commodity strategies. Learning and understanding commodity strategies will require traders to take time to learn about trade strategies so that they can know about how they can come up with their own.

Traders can learn how to develop and come up with their own commodity strategies by first of learning about the commonly used trading strategies in the commodities market. After reading about the commonly used trading strategies in the traders can then come up with their own trading strategies as they will have learned the basics of how to come up with a trading strategy.

The most common trading strategies in the commodity market are:

Once a trader learns the basics of how to recognize simple commodity patterns and trade these commodity chart patterns using trading strategies, the traders can formulate complex commodity systems that they can use to trade the commodities market. Commodities traders can then use these strategies to identify entry and exit points when they want to open commodities trades.

Traders must consider several factors before coming up with their strategy. Commodities traders will have to determine the points at which they will be buying or selling. Commodities traders will have to determine their take profit targets as well as their stop loss levels. Commodities traders will also have to determine the commodity money management guidelines that they will use when trading with their commodity strategy. For example a trader may select to use the 2% commodity money management rule which says that a trader should not risk more that 2% of their account equity on any one single commodity trade. The trader can also use the high risk reward ratio commodity money management rule, for example a trader using high risk reward ratio of 2:1 - means that if a trader sets their stops at 20 pips, then they will set their take profit level at double this amount, this means the trader will set their takeprofit level at 40 pips.

After determining all these & selecting the trading strategy a trader will then write down their commodity strategy & the rules of these strategy so as to come up with a complete commodity system to trade commodity with.