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Commodity Market Pricing
One problem many of us have is what I call drunken sailor trades.
These are commodity futures contract trades where we
just can’t wait to get in at any price. We throw out our
discipline and jump in. Or maybe we hear a
well-respected commodity guru speaking about a
particular futures contract market and then jump in at
any price.
Commodity Future Market Pricing:
Potentially good commodity futures trades often disguise
themselves. They make you feel you are looking over the
edge from the roof of a tall building with no railing.
To experience this feeling, try buying a panic pricing
spike in progress.
Yet, the commodity futures market was creeping lower.
With the bearish A-D line and lower lows in pricing,
there was no doubt a huge bearish group of traders were
on the gravy train short. They were waiting for the big
slam down to take profits.
Commodity Futures Market Trading Expenses :
So now that we’ve touched on the major expenses of
commodity futures market trading, lets look into
specifics. Possibly the biggest drain on "swing
efficiency" (what percentage of the perfect move you
take out) is what is called slippage and skids. Once the
decision is made to enter, this is how far the market
moves before you get an execution. Sometimes it can be
positive slippage where it helps to give you a better
price. But much of the time it is negative slippage and
eats away at your bottom line. Normal slippage is caused
by time delays in the futures pit or other problems in
the order chain.
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