Chapter 8. Making Cents of Commodity Quotes
Too many stock traders or beginning commodity traders are discouraged from participating in the futures markets by the complexity of the pricing. I believe that becoming comfortable with commodity quotes and calculating profit and loss in each market is even more critical than accurate market speculation. In fact, until you are proficient in determining position and contract value, you shouldn’t be risking money in the markets. Afterall, if you can’t measure your reward, how can you possibly manage your risk?
“Risk comes from not knowing what you are doing.” Warren Buffet
Unfortunately, quoting and calculating commodities is also the most frustrating aspect of trading commodities. Unlike stocks in ...
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