3 Steps to Improving Your Commodity Trading
For new beginners wanting to improve their commodity trading education will play a fundamental role to improve their understanding of the commodities trading market and this will lead to the trader becoming more successful.
After traders have learned the commodity trading lessons required to start commodities trading and well as the various commodity trading strategies then traders need to follow these three steps below so as to improve their trading. If you have not learnt about the commodity trading lessons needed to start commodity trading or you are looking for a commodity trading course that provides these commodity trading lessons then you can find these commodity trading lessons on the learn commodity trading section of this website. You can also find commodity trading strategies from the learn commodity trade strategies section of this website. After you've completed reading these guides traders can then follow these steps to improve their trading.
Come Up With a Commodity Trading Plan
Traders need to plan their trading & to do this, traders will have to come up with a commodity trading plan. Commodity traders looking for an example commodity trading plan can find one on this website, the lesson of writing a commodity trading plan can be found on the learn commodity trading lessons of this website, this is the last lesson on this learn commodity trading lessons section.
Use a Commodity Trading Plan and Stick To The Commodity Trading Plan
Traders should always use the commodity trading plan they create to trade the online commodities market. The strategy that a trader selects should be well written down in this commodity trading plan & the trader should always follow the rules of this commodity trading plan when deciding when to open and close trades.
The trading instruments that a trader will be trading will also be specified within this commodity trading plan, the trading instruments chosen will be the commodity charts that are best suited for trading based on the trader’s trading strategy.
The commodity trading plan will also specify which chart time frame that the trader will be trading with, whether the trader will use the minute charts or hourly charts. The chart time frames used will depend on the trading style of a commodity trader. A scalper will use the one minute charts, a day trader may use the 15 minute charts and the swing trader may use hourly charts.
The commodity trading plan will also set the take profit targets for each trade as well as the stop loss for each trade. Once a trade is open then a trader will close their trade once the take profit level is reached or once the stop loss level is reached. By sticking to this technique of closing trades at pre determined levels will ensure that traders will be more successful because they will have decided the points to close trades before opening the trade.
The commodity trading plan will also include commodity trading money management rules that the trader will follow. For example a trader should follow the commodity trading money management rule that specifies that they should not risk more than 2% of their account capital on any one single commodity trade. The commodity trading money management rules tutorial can also be found on this site on the learn commodity trading lessons section under the commodity trading key concepts topics.
If as a trader your chosen strategy is to use automated strategies & EAs then these automated strategy should be specified in your trading plan. Whatever strategy you decide to trade with as a commodity trader, write it down in your commodity trading plan and stick to trading with that strategy.
Traders should also avoid emotions of fear and greed when trading in the commodities trading market. The commodity trading plan will help traders plan their trades and this way traders will not make trades based on their emotions. A commodity trading plan will help a trader set clear goals when trading & at same time will help traders to stay organized when trading & thus ensuring the traders become more successful when trading in the commodities trading market.
Trade With The Commodity Trading Trend
Traders should always make sure that they open trades in the direction of the market trend. The market commodity trend is the general direction of the market commodity prices and this direction can be upwards or downwards. Once the commodities trading market trends start to move in a particular direction commodity price will continue to move in that direction for a while because the trends will have gained momentum that will keep pushing commodity prices in the direction of the market trend.
This is why traders should always open trades in the direction of the market commodity trend so as to trade in the direction that has momentum and this way traders can increase their chances of being successful when trading the commodities trading market.
Trader always have a saying in the commodities trading market - The commodity trend is your friend - which means that traders should always trade in the direction of the trend and never open a trade against the commodities trading market trend. This is because the most reliable method of trading commodity, and not just commodity trading even stocks & other financial instruments is to follow the commodity trend & only open trades in the direction of the trend.
There are various methods of determining the direction of a market commodity trend & to do this trader should use commodity trend-lines or moving averages or Bollinger bands technical indicator.
Keep a Commodity Trading Journal To Track Your Trading Results
Traders should always keep a commodity journal & write down all trades that they open in this journal, they should write why they opened each trade, when they closed the trade and also the amount of profit or loss generated from that trade.
After a while traders can then review the trades they have made try & look at why the losing trades made a loss and why the winning trades were successful & after that they can then try and do more of what makes them successful & less of what is making them to open losing trades and that way keep on improving on their commodity trading strategy.
As a trader if you don't keep a trading journal you might continue making the same mistakes over and over again without knowing, but if you keep a commodity journal & keep reviewing this journal from time to time then you give yourself a chance to identify the mistakes you make in trading from reviewing your trading journal.
Once a trader gains some experience in the commodities trading market and start to recognizes the successful trading patterns from their winning commodities trades they can then use this information to identify the setups that will have more probability of producing winning trades and this way they can then continue to improve their commodities trading.
