How to trade long term on commodities

[pauliewalnuts]

I want to bet on the long term for commodities like sugar and cotton. What is the best way to do this?

 

[malaguti]

I want to bet on the long term for commodities like sugar and cotton. What is the best way to do this?

start with a weekly chart

 

[pauliewalnuts]

start with a weekly chart

and than?

 

[malaguti]

and than?

I can see this is going to take a long time..
start with a weekly chart, define the trend on that time frame.
Develop a system with an edge, back test it and then trade from that time frame.
Decide whether you will be in that system for the entire length of that trend, or whether you want to take little pieces from the trend.
If you want long term, you don't want to be fading that trend, you want to stay with it always
decide how you will enter, exit, decide how you will add to your existing position, determine your position size etc etc
But the starting point for me is the trend. how will you define a trend?
what criteria will tell you whether a new one is beginning or ending, or will you wait for a trend to develop before getting on board..how will you know whether that trend has developed.
You will learn alot just from this alone

 

[pauliewalnuts]

I can see this is going to take a long time..
start with a weekly chart, define the trend on that time frame.
Develop a system with an edge, back test it and then trade from that time frame.
Decide whether you will be in that system for the entire length of that trend, or whether you want to take little pieces from the trend.
If you want long term, you don't want to be fading that trend, you want to stay with it always
decide how you will enter, exit, decide how you will add to your existing position, determine your position size etc etc
But the starting point for me is the trend. how will you define a trend?
what criteria will tell you whether a new one is beginning or ending, or will you wait for a trend to develop before getting on board..how will you know whether that trend has developed.
You will learn alot just from this alone

The Indians, Africans, Chinese, Brazilians, Russians, South East Asians will use a lot more commodities the next 20 years. That is my trend.

I am looking at these etfs for sugar
- Dow Jones-UBS Sugar Subindex Total Return ETN (SGG)
- Pure Beta Sugar ETN (SGAR)
- Teucrium Sugar Fund (CANE)

I know with an etn you have the risk that you lose your money if the party goes bust.
But do i pay fees on these etn for rolling over future contracts for these etns?

 

[malaguti]

The Indians, Africans, Chinese, Brazilians, Russians, South East Asians will use a lot more commodities the next 20 years. That is my trend.

I am looking at these etfs for sugar
- Dow Jones-UBS Sugar Subindex Total Return ETN (SGG)
- Pure Beta Sugar ETN (SGAR)
- Teucrium Sugar Fund (CANE)

I know with an etn you have the risk that you lose your money if the party goes bust.
But do i pay fees on these etn for rolling over future contracts for these etns?

you need to ask your broker, typically their might be a spread difference
as for all these countries using commodities, they have always used these commodities, and always will. do you see a steadily rising trend for these commodities? No you don't..you also wont in the future. Back to that trend...

 

[pauliewalnuts]

you need to ask your broker, typically their might be a spread difference
as for all these countries using commodities, they have always used these commodities, and always will. do you see a steadily rising trend for these commodities? No you don't..you also wont in the future. Back to that trend...

I do. If we all start using commodities like the Americans we need 4,5 times this earth. What happens when 500 million Chinese get to the middle class and the same for people from India?

 

[malaguti]

I do. If we all start using commodities like the Americans we need 4,5 times this earth. What happens when 500 million Chinese get to the middle class and the same for people from India?

I don't doubt that demand will rise, but would you have bought sugar in dec 2009? Demand is still going to be there isn't it, but 6 months later it was worth 34% less, why is that..did people not realise that chinese were going to be middle class?
when would you have sold sugar, after it had fallen 34%? sooner?
when would you have bought again..or would you still be hanging onto it now?
it reached $28/pound, would you have sold then? why, or why not?

its about timing, commodity prices do not go up in straight lines, and its no different from dec 2009, to dec 2029.
But good luck to you Paulie..you wait for that middle class population to grow up.
but by then, and we realise that we cant produce enough sugar to feed all these middle class families what sugar substitute will there be? what effect will that have on your etf now?..its about timing, thats all Im saying. Its all about, and will always be about timing.

 

[pauliewalnuts]

I don't doubt that demand will rise, but would you have bought sugar in dec 2009? Demand is still going to be there isn't it, but 6 months later it was worth 34% less, why is that..did people not realise that chinese were going to be middle class?
when would you have sold sugar, after it had fallen 34%? sooner?
when would you have bought again..or would you still be hanging onto it now?
it reached $28/pound, would you have sold then? why, or why not?

its about timing, commodity prices do not go up in straight lines, and its no different from dec 2009, to dec 2029.
But good luck to you Paulie..you wait for that middle class population to grow up.
but by then, and we realise that we cant produce enough sugar to feed all these middle class families what sugar substitute will there be? what effect will that have on your etf now?..its about timing, thats all Im saying. Its all about, and will always be about timing.

Im bad at timing but i know the long term trends of middle class growth and the fact that nobody wants to be a farmer and when sugar goes down i buy more. And looking at a week chart won't change anything on the long term trends.

 

[malaguti]

And looking at a week chart won't change anything on the long term trends.

then you don't need any answers (from me that is) on how to trade long term on commodities..you have them already. Buy an etf, hold onto it for a long time.
the very best to you Paulie

 

[Solas0077]

then you don't need any answers (from me that is) on how to trade long term on commodities..you have them already. Buy an etf, hold onto it for a long time.
the very best to you Paulie

I hope nobody here takes seriously an amateur like you.

 

[malaguti]

I hope nobody here takes seriously an amateur like you.

ive found a stalker

 

[Oceann]

Timing is the key.

 

[Liam M.]

I think that commodity trading requires much more of fundamental analysis than the currency trading. So here is my question to the people who trade gold, is there any events that i have to pay extra attention in order for not lose money on its release

 

[NVP]

my advice is when the price goes up buy it and when it goes down sell it ...

I know thats a bit technical but apparently it can work occasionally

Taxi for this thread ....
N

 

[prabhu]

commodities market

I am in the commodities market and came here to learn how to have more stable n firm trade in a shorter term so i have no fear of waking up into the "red sea" and here i see people in forex trying to enter commodities.

 

[neil]

I am in the commodities market and came here to learn how to have more stable n firm trade in a shorter term so i have no fear of waking up into the "red sea" and here i see people in forex trying to enter commodities.

Taxi !! :whistling

 

[scose-no-doubt]

(unit cost of production + delivery vs implied cost of carry) x supply side factors ^ cost of margin

that look real enough?

 

[yellowfloyd]

I want to bet on the long term for commodities like sugar and cotton. What is the best way to do this?

Buying and holding physicals is probably a no no. It might work for precious metals like gold and silver, but storing lots of Sugar or Cotton is going to cost you. Options give you the right to buy or sell at a certain price by a specific date, but you need to find a counterpart prepared to take the other side of the trade and write a contract for your time horizon and trade size. Futures are similar but are in standardised contract sizes and traded on exchanges but tend to be focused on the nearest months which again might not help with your time horizon. CFDs and Spreadbetting allow you to take a bullish or bearish stance, with more flexibility on sizes and with no time limits, but do bear in mind that financing costs (the daily price for the leverage provided) could mount up over time, eating into profits and so must be compared to the size of the position and gains you’re looking to make. Best of luck. Maybe you should make a market in candyfloss!