Commodities for Every Portfolio: How You Can Profit from the Long-Term Commodity Boom

Chapter 9

Commodity Trading Strategies

Give me six hours to chop down a tree and I will spend the first four sharpening the axe.

Abraham Lincoln

Now that you know the different ways of participating in this bull market, it is important to know how you can profit from it. Futures, stocks, mutual funds, and exchange-traded futures (ETFs) provide you with the investment vehicles to take advantage of this commodity boom, but the strategies that you implement, the advice that you follow, and the markets that you trade are what ultimately will determine whether you even profit from this bull market. In short, even in the midst of rising commodity prices, it is still possible to lose money. Some of the more common reasons are buying too early, selling too soon, or simply listening to the wrong advice.

While these reasons may come across as a given, they reaffirm the fact that it is important to have a disciplined and well-researched plan in place before you start investing in the commodity markets. Not only will this plan provide you with a road map for navigating through the markets, but it will also enhance your ability to make and maintain long-term profits. This is particularly essential in a market that is volatile and ever changing.

This part of the book focuses on some of the diverse ways that you can navigate through this bull market. In this chapter I look at getting started with the different commodity trading strategies. I also give you my thoughts on the benefits of long-term ...