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Hi Leo,
>I would like to ask those of you who trade commodities what is it
>about commodities that makes them preferable to stock trading for you.
I'm going give you my personal viewpoint:
As you know, one of the differences between stocks and
commodities/futures,
is, a futures contract has an expiration date.
You can hold a stock virtually forever ( Coca-Cola has been around for
what?, 60, 70 years?); the lifetime of a futures contract is a matter of
months, with the last three to four ( in most cases ) being the most
suitable
for trading due to liquidity.
Depending on your personality as a trader, trading expectations and
approach to the markets, if you are a lonnnng - term trader and want to
open a position and leave it open regardless of time ( probably because
of
your analysis of that market ), stocks may be the answer for you.
On the other hand, if your expectations is to open a position and close
it
when, for example, it moved 3 times the daily / weekly / monthly range
( by this I mean, a relatively short period of time ) in your favor,
probably you're more suited for futures trading.
But in either case, a prudent / knowledgeable trader should set rules as
of entering and exiting the market, and that includes DISCIPLINE.
>My question is, just what really is it that makes a commodity trader
> trade commodities?
I am a futures day - trader and I have made good trades and bad ones.
I like futures trading because it suits my personality and goals as a
trader. If I enter the market, I don't want to wait 3 years in order
to know I was in the wrong/right side of the market, not even three
days.
If I open a trade today, I want to know if I was right or wrong TODAY.
Why wait?, you are either right or wrong or ... a spectator outside the
trading arena.
Recently, I posted a note about trading techniques at the RT forum.
I wrote that, if someone, with some sort of secret indicator, knew,
say, 60% of the time, when the Close is going to be above / below the
Open by just one tick ( and it's a lot more than that, you know it ),
he / she could make a ton of money.
Have you thought about that?, I'm not talking about forecasting the
Close price( nobody knows that, for sure ), just the RELATIVE POSITION
of the Close / Open. That's why the OPEN is to me, the MOST IMPORTANT
price of the day.
Just some thoughts I wanted to share with you and the rest of the guys.
If you and/or someone else has a different opinion, I will always
respect that.
Good trading !
Efrain R Portales
Fort Worth, TX
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