Commodity Trading – Chapter 13: Stress of Commodity Trading

This is chapter number 13 out of 13. Read the rest:

Read Commodity Trading – Chapter 1: History of Commodity Trading
Read Commodity Trading – Chapter 2: Commodities Trading
Read Commodity Trading – Chapter 3: What is traded?
Read Commodity Trading – Chapter 4: Using Commodity Trading as an Investment Vehicle
Read Commodity Trading – Chapter 5: Advantages of commodity trading
Read Commodity Trading – Chapter 6: Disadvantages of commodity trading
Read Commodity Trading – Chapter 7: Risks of Commodities Trading
Read Commodity Trading – Chapter 8: Risk Management
Read Commodity Trading – Chapter 9: Steps To Undertake While Trading In Commodity
Read Commodity Trading – Chapter 10: Commodity Trading – a losers Game?
Read Commodity Trading – Chapter 11: Learning to Trade Commodities
Read Commodity Trading – Chapter 12: Creating a Trading Plan

Besides having the right psychological traits like patience and discipline, you will need to know what psychological trap to avoid. You should be careful on relying on others to make you successful. Those whom you are likely to trust will not necessary be good traders themselves. For examples, Friends, Brokers, Advisors or even Mentors.

Although you may acquire your trading strategy from books or other traders, you might wise to test them out yourself before actually trading. A good software system can be purchased to allow you to try out comprehensive simulated trading.

Always focus yourself for the long term. Never adopt your trading strategy based on short term performance. Any system that is judged based on its short term performances will never perform ideally.

The majority of commodity trades have an ego problem that they cannot cope with their losses that they incurred. Instead they begin to start to evaluate their system based on its short term performance to try to justify their losses. Don’t fall into the same trap and lose your confidence in the trading system after suffering some losses. Always try to evaluate performances based on half yearly results and as many trades as possible. Stick to the plan!

Even if you have a successful run in your trading, never let that overcome you with too much enthusiasm. This is because most traders make the biggest mistake in their trading strategy usually after a successful period. What they do is to increase their trading. What most people fail to consider is that after a successful run, the “painful” period is what follows.

The most difficult part of commodity trading is actually trying to increase trading in a blooming account. You have to be careful in trying to add to your account. The ideal time to do this is after equity losses. Although losses are sad affairs, you should not let yourself get depressed. Just adopt a balanced approach towards elation and despair when it comes to trading. If you are able to master these emotions then you are already halfway toward mastering the Futures markets. 

We wish you good luck and happy trading!