Markets that deal in commodity trade always come with a ‘sure-shot guarantee to success’. This means that anybody who wants to trade in commodities online, is guaranteed a profit; regardless of the tendencies of the market (whether bullish or bearish). Not to mention the fact that the commodity market is far bigger in comparison to other kinds of markets. However, there’s no need to feel overly reassured: while trading in the commodity market is easy and profitable, it’s really not free from its own shortcomings and risks. A majority of experts have the opinion that the ups and downs of the market are completely random and perfectly efficient; in such a manner that it would be nearly impossible for most traders to note down any particular pattern of behaviour in the markets (i.e., the fall and rise of the spreads and prices). Therefore, there isn’t really a chance for anybody to edge out all the other players in the market. This feature is really good since nobody would get to monopolise the market. However, there exist a few people who have made a killing out of the commodity market. In mathematicians’ lingo, one has to describe the commodity market as totally non-linear and very dynamic. Naturally, it produces results that might appear random at a superficial glance, but it really follow a set trend that is obscured from novice/inexperienced eyes. Contrary to what the experts suggest, the markets are very far from being completely efficient. A pattern is present, although superficially, all movements, dips and rises are random.
That being said, a majority of the price directions of the commodity markets can never be predicted by any trader with 100% accuracy. The only option available to most is to follow the time-frames that have displayed a good record in the past, as far as profit-making is concerned. There are mainly four problems that are faced by the traders. Those are detailed out below with input from Easymarkets:
• The first step is to find the correct step. One should be able to identify a trend which can actually be found to display a statistical edge in the market where gains and rewards are concerned. This is the toughest part so far.
• The aforementioned trend, even if identified correctly, is difficult to follow with consistency for a majority of traders.
• The trend must be followed till the precise time has arrived for it to display its market edge.
• Lastly, the overall uncertainty of the market added to the fact that there are hidden, guarded secrets to the predictions; are enough to put new traders into a tizzy. As a result, they would spend most of their trading time in trying to find that one particular “pattern” which would be able to give them what they were looking for. Naturally, dishonest people take undue advantage, causing traders to believe in and fall for “hit formulas” peddled by the unscrupulous elements.
That being said, a majority of the price directions of the commodity markets can never be predicted by any trader with 100% accuracy. The only option available to most is to follow the time-frames that have displayed a good record in the past, as far as profit-making is concerned. There are mainly four problems that are faced by the traders. Those are detailed out below with input from Easymarkets:
• The first step is to find the correct step. One should be able to identify a trend which can actually be found to display a statistical edge in the market where gains and rewards are concerned. This is the toughest part so far.
• The aforementioned trend, even if identified correctly, is difficult to follow with consistency for a majority of traders.
• The trend must be followed till the precise time has arrived for it to display its market edge.
• Lastly, the overall uncertainty of the market added to the fact that there are hidden, guarded secrets to the predictions; are enough to put new traders into a tizzy. As a result, they would spend most of their trading time in trying to find that one particular “pattern” which would be able to give them what they were looking for. Naturally, dishonest people take undue advantage, causing traders to believe in and fall for “hit formulas” peddled by the unscrupulous elements.
(Discuss) Commodity Trade: A Few Thoughts
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