What are some basic rules and strategies for trading
the commodity markets?
1. Commodity positions
are meant to be traded in and out. Buy and hold does not work, especially with options
Take Losses and Regroup (TLR).
3. Take Profits and Relax (TPR).
4. The market will determine if you are RIGHT or WRONG. If you are right the market will reflect
it very quickly. If you are wrong the market will reflect it very quickly, so GET OUT, reposition, or use longer term option
positions to limit losses.
5. If you are not confident about a market’s
short term direction, but are comfortable with the market’s long term direction USE OPTIONS.
6. Cover some future trades with options to reduce risk.
all losing futures positions at end of day or sooner. NEVER EVER hold over a long weekend!
Never place a futures trade without first considering the worst case scenario, and determining that you can handle it. WHAT
CAN GO WRONG, MIGHT GO WRONG!