Lemons or Lemonade? How to Make a Smooth Transition from a Sour Stock to a Sweet Commodity
Lemons or Lemonade? How to Make a Smooth Transition from a Sour Stock to a Sweet CommodityApril 9, 2013
Have you ever had a feeling that your stock strategy is flawed, or alternatively you can’t keep up anymore with the fast-paced trading like you used to? Well, get ready to join a very big fan club of binary options traders making a transition from a sour stock portfolio to sweet commodities.
The first step is realizing it and admitting to the fact. Some people have managed to trade options for a while, but have not been able to gain substantially from it. If this is consistently the case, you need to be asking yourself if you are a “stock person”, because the answer to that simple question will set you in the right direction.
Iif you feel you have been profiting and are satisfied with your performance in general, excluding one specific stock that has been constantly under performing despite your analysis and predictions – you might want to try and diversify a bit to commodities.
Oil, Gold, Soy Beans, Coffee, Corn, Silver & Copper are all listed commodities and most can be traded with brokers the like of Anyoption, Traderush, or 24Option. OK, but how do you make a clean transition? Just like everything else in life, before you step into anything new, do the proper research. When you really get into it you can see that its basically the same, just the names change and the indicators influence the asset in a different way.
For example, if you trade stock you are constantly looking for buy & sell signals on APPL or GOOG. For example, if you are trading the news and hear that Apple just won a court ruling against Samsung in an emerging market, you know that you can sell on the upside. With corn, or Mini Crude Oil the signals are different different, and specifically with agricultural commodities there is a strong cyclical nature which if deciphered correctly can generate a lot of money for you. For example, let’s say that you looked at the historical data for crude oil, and notice that during the beginning of February there is a recurring trend of less fuel consumption which is attributed to less driving due to seasonal changes caused by the Winter (rain, sleet, and rough driving conditions). Naturally this would mean that demand is lower, and a short position on would be a good bet. However, if you follow the news you would see that $BRENT is going up, and this can be attributed to a bullish rally led by the Bulge Bracket (BB) triggered by the the debt crisis.
One must also look at market leaders like XOM, CVX, and BP to see how industry leaders affect the markets. For instance, if XOM was able to forge a new deal with the government in Uzbekistan (for example) and a shale gas production is expected to rise, this should resonate immediately on the stock, but also on market sentiment in general.
To sum up, making a transition from stock trading to commodities in binary options requires developing a new outlook and a different strategic approach to profiting from the markets. Your ability to adapt and learn how to analyze the charts and financial news effectively can cause a significant change from loss to gain in a relative short period of time.
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