Trader Mindset

How commodity trading differs from equity trading


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Commodities have no value per se. There is no valuation basis such as "growth" or "value" in commodity trading. 

Traders learning about commodity trading can get into a great deal of trouble if they try to buy a commodity on a pullback on a "valuation basis."

Saying "I should buy it here because it's pulled back X% and that's a reasonable decrease" will put that trader out of business. 

You can't be "reasonable" with the markets and you can't negotiate your stops. 

The best rules and systems are price-based models that eliminate sub-optimal trades and thereby filter out many of the losers BEFORE a trader would put the trade on. 

How do you lose less? Avoid losing trades in the first place. 

Admittedly, it's a bit of a different mindset at first, but it's possible for traders to trade both asset classes albeit with slightly different rules. 

Click here at get your free copy of The Inner Voice of Trading audiobook.

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Trader MindsetBy Michael Martin

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