Should I focus on a specific group of commodities as a novice trader?

Discussion in 'Trading' started by Lethn, Oct 19, 2009.

  1. Lethn


    Hey folks, I have a question, seeing as how my job prospects seem to be easing up a bit compared to what they were and I might have a chance of scoring a basic temporary or permanent job some time soon I thought I'd do some more research on trading again.

    When it comes to trading in commodities are there certain advantages and disadvantages when it comes to becoming specialized in trading in certain group of Commodities like Grain or Metals? Obviously with things like Grain you have the demand changing depending on the amount available and also the season you are in.

    Or would it actually be better to keep my options as open as possible? Simply looking for the commodities that would be the most profitable? The reason I ask this is because quite often I've noticed experienced traders seem to be focused in a particular area of commodities instead of looking at all of them individually.
  2. Do you plan to trade commodities based on fundamentals/macro analysis or based on technical/mechanical analysis. Don't say "both" because that will just lead to problems later.

    IMO, if you want to make trades based on economic analysis then it makes sense to focus on a market, say agriculture/metals or energy.

    As a technical/mechanical trader the market doesn't really matter.

    Just my 2c.
  3. Lethn


    If you mean fundamentals/macro by the basic methods of trading as opposed to using programmed algorithms then yes.

    I'm just worried about whether or not focusing on certain groups would be a good idea because if I pick one group that's only good for trading at certain times then it would mean there were times when it simply wouldn't make sense to trade at all and I don't want to do that as I think I'd actually like to go into trading as a profession eventually if I get good enough.
  4. Your problem is not which instrument. It is more of a factor of volume, volatility, contract size, etc. For example, a contract of cocoa pales in size to a fullsized S&P. A lot of futures/forex traders who may appear profitable for a while may blow out strictly because of overleverage (greed) or underfunding (foolishness). Everyone should learn about "Risk of Ruin." No one is a profitable trader who carries on a significant RoR, because it is not IF but WHEN.

    But still, the fundamental problem, is finding an edge, learning serious money/trade management, trading system statistics (sharpe/sortino, profit factor, drawdown analysis, etc.)

    I suspect a good price action trader could learn to trade many different instruments. The reason most fail is lack of edge and lack of management skills

    Almost no traders are giong to be lucrative, longterm.

    Your real focus should be on your career and trading should be a hobby, with money you can EASILY afford to lose. Seriously for most novice traders who do not put in the long hours, money and dedication, you will nore likely win a sizable amount of money at gambling rather than trading.

    So in summary, focusing on a subgroup of commodities is not really your problem. seriously seriously, focus on your energy on learning to trade or avoid it altogether.
  5. l2tradr


    Wow, it really took you many sentences to say absolutely nothing of value. As per usual. Really, stick to moderating ET for free (fine job by the way ;) ) rather than give trading advice, because apparently if you couldn't make it in this profession, no one can.

    To the thread starter: My opinion is to focus on one market and learn it really well; by the time you achieve that, you can transfer many of the skills to other markets. Good luck.
  6. l2dummy - You may list the flaws above below, but since you could only issue a general fart upon them, obviously you cannot trade.

    To the thread starter, worry when someone who does not understand trading muscles in to offer useless advice. His analysis boils down to air.

    What I said is pretty much what experienced traders would say.
  7. l2tradr


    Just curious, when do you have time to trade? Between 5000 posts in one year and catching every spammer on a site you don't own nor profit from, it sounds to me that you can't possibly have the time to actually trade... nor have I seen anything of value coming out of your mouth, other than put everyone down, pissing in everyone's cereal and regurgitating information you've heard from successful traders.
  8. Curious, when do you plan to start your ESL classes (don't spend an hour thinking of another response, you will be joining other mentally deficients on the ignore list, before you embarrass yourself with another "fill out the generic form to whine, just put your ID in the box" response.)

    Next time I need a forum censor to approve content, I will be sure to contact your mother to obtain your services...
  9. Lethn


    Anyone else mind offering something useful besides these two starting their bickering war in my thread?