Basics of Trading

Why to Trade Commodity Spreads and Futures Spreads?

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In our article Use of the Term “SPREAD” in Exchange Trading we briefly introduced the area of commodity spreads, or rather futures spreads. Let’s now look at them in more detail. The principle of trading futures spreads is a speculation on increase or decrease of price difference between two futures …

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Use of the Term “SPREAD” in Exchange Trading

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If you are at least a little familiar with exchange trading, you’ve surely already come across the term spread. It is a frequently used term which, however, occurs in various contexts and therefore represents several different phenomena. As a result, there is often confusion regarding the spread interpretation and it …

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Statistical Analysis in Exchange Trading

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Traders exploiting automated trading strategies have probably the most significant advantage over discretionary traders in the possibility of using comprehensive and accurate statistical analysis. Nowadays, traders can execute many statistical operations within few seconds thanks to large range of analytical and programming trading software (such as Tradestation , Multicharts, Microsoft …

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Futures Contracts Specifications and Terminology

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The fundamental principle of futures contracts is that they expire on certain date in the future. On the date of expiration, the physical commodity gets delivered to a holder of the futures contracts. This specific date is called the expiration date of the futures contract. But beware! You can close …

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WHAT ARE COMMODITY MARKETS AND FUTURES CONTRACTS?

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Within our trading systems, we focus primarily on commodity futures trading. In this chapter we shall describe what led us to choosing this kind of trading and what are the principles of commodity trading. Commodities, as well as most of other underlying assets, are traded on the exchange. The basic …

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