Thursday, June 26, 2008

Commodity Trading Information: The First Post!

Welcome to my first post on Commodity Trading Information! I know, I know, it sounds like such an exciting name for a blog, you can hardly contain yourself. The truth of the matter is, while this blog is definitely about trading commodities, it's also going to lean heavily towards being a journal of a sort, or an online "diary" of a sort (though I hate that word--sounds so cheesy), based on my own experience in the commodity markets. I am no stranger to the futures markets...I started actively trading them in November of 2001, and haven't looked back since. I have seen both triumph and tragedy in the markets (and in my own brokerage account), and I have learned quite a few lessons in the markets, enough to definitely earn my degree in the commodity trading school of hard knocks. I believe that the best way to learn is to simply "get in the game"--yes, you need to plan and prepare, but there comes a certain point in your futures trading career where you've done all the paper trading you can do, and it's time to move into the realm of trading with real money. Experience has also taught me that while you may knock it out of the park consistently when paper trading, you can ROYALLY screw things up when you get into trading commodities with real money, because your emotions are so tied to real money, it's hard to stay objective, yet objectivity is the very thing you need to succeed in the markets. You really need to be "Cool Hand Luke" in the commodity markets, or you just won't be able to last through the ups and downs of basic market volatility.

Many people shy away from futures trading because they believe it's too risky. To borrow a quote from Robert Kiyosaki's Rich Dad, "It's never the investment that's risky, but the investor is what's risky" (my paraphrase). I have found this to be true. There are thousands of people who literally just kill the markets on a consistent basis, and then there's a far greater number of people that just get slaughtered by the markets on a regular basis. One thing's for sure, the markets are the markets, and you cannot control what they do; all you can do is hopefully detect potential moves based on solid principles of technical analysis and price chart analysis, and then make your plan, execute your trade, and hope to God you're right when it's all said and done. But, the greater level is, and this is something I know I'm going to post about later, is when you no longer have to be "right" anymore to be successful; you just have to consistently stick to your trading plan, through extravagant gains as well as stomach-churning losses.

Stick around if you want to learn a couple of things about trading commodities; I'll warn you, I am not the most technical guy in the world...I don't get all wrapped up in the ridiculous amounts of fundamental data that's out there, such as drought indexes (or is it indices?), commitment of traders reports, blah blah blah...I mainly stick to the very basic, almost country-dumb methods of using reliable, well-documented, historically proven chart patterns, and placing my trades based on that information, and then not freakin' sweating it anymore beyond that. Now I don't know who all is out there, and who's going to read this blog, and if there's some fancy-mack-daddy futures analysts or whatever that might happen to stumble upon this blog...if they do, and they think that I'm just blowing a lot of smoke, let me say that I have used chart reading and technical analysis to directly pull profits from the commodity markets, and I know that this stuff works. I have also incurred many painful losses, all of which I consider to be tuition money in the "Commodity School of Hard Knocks". There's nothing like being in the game to teach you how to play the game.

So again, welcome to my blog...hopefully I will share some commodity trading information that will give you yet another perspective as you develop your own individual trading style.