Do momentum based trading strategies work in the commodity futures markets?

Do momentum based trading strategies work in the commodity futures markets?

While contrarian strategies do not work, 13 momentum strategies are found to be profitable in commodity futures markets over horizons that range from 1 to 1 months. Our tactical allocation in commodity futures markets generates an average return of 9.38% a year.

What is the most profitable commodity to trade?

The Top 10 Commodities to Trade

1. Gold. Gold is one of the most regularly-traded commodities and is a precious metal that is continually in demand.
2. Silver. Another precious metal, as a commodity, silver shares many of the attributes of gold:
3. Crude Oil.
4. Natural Gas.
5. Copper.
6. Coffee.
7. Soy Beans.
8. Iron Ore.

Do momentum and reversal strategies work in commodity futures a comprehensive study?

The authors find that there is no significant reversal profit across 189 formation-holding windows for all the three strategies. However, there are statistical and economically significant momentum profits, and the profitability increases with the rising of formation-holding periods.

How do I become a successful commodity trader?

The 8 Attributes of Successful Commodities Traders

1. Be Willing to Learn Futures and Options.
2. Know the Margin Requirements.
3. Have Insights on Commodity Frequencies.
4. Be Aware of Commodity Attributes.
5. Know How to Use Trading Platforms.
6. Understand Market Support and Resistance.
7. Understand Types of Analysis.

Is commodity Intraday profitable?

Commodity trading is the dematerialized trading of real-world commodities like gold, silver, cotton, rice, oil etc. It is done through online commodity trading exchanges and it aims to make the traders earn a profit through price fluctuations in the commodities. This makes commodity trading profitable.

What is the most stable commodity?

As you can tell from the graph, commodity with the highest exhibited vol over the last 10 years is Natural Gas, followed by Nickel. On the opposite end, it’s Live Cattle and Gold.

How to be a successful commodity trader?

However, the most success is usually generated through the use of tested trading strategies. There is a multitude of commodity trading strategies, some that have been through rigorous testing and others that have been developed by individual traders over time.

How do commodity futures work?

Commodity traders can access the futures market and use futures contracts without actually taking the physical commodity. Please check how the futures market work here: Futures Trading Strategies (Trading Futures for Dummies).

What is tradtrading commodity futures?

Trading commodity futures is an investment option for anyone who doesn’t intend to take delivery of the actual commodity. The speculators in the commodity market liquidate their exposure before the expiration date. Large speculators – also referred to as the non-commercial traders (i.e. Banks and Large Financial Money Managers).

What is a commodity strategy?

Learn how to implement successful strategies for commodity trading amid the ongoing US-China trade war. The outlined commodity strategy is a designed plan for making money in the commodity market.