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Momentum trading in commodity futures markets
By Capitalist | April 16, 2009
There are certain commodities that suddenly show a marked increase in trading volumes. The groups of people who concentrate on such commodities are called momentum traders. Such people look to continue with the trade till the momentum lasts. This way they seek substantial profit.
They come out of the market when the flush of the commodity momentum dies. Momentum trading in commodity is more specifically news based. Big news pertaining to GDP, inflation, bullion reversals, and regulation changes of stock governing authority or bigger banks have a huge bearing on the commodity market.
These generally give way to sharp movement of a commodity good. These news are strongly dealt with by the momentum traders. They get up early and start looking for news that might have a big impact on the market. At the same time, any news pertaining to the last day also produces a lot of enthusiasm in them.
Topics: Commodity Trading, Stocks & Trading | No Comments »