How do you monitor commodities prices? (2024)

Depending on your trading or investing style, you may want to monitor commodities prices on different time frames, such as daily, weekly, monthly, or even intraday. The time frame you choose should reflect your objectives, risk tolerance, and available resources. For example, if you are a long-term investor, you may want to focus on the monthly or weekly charts to capture the major trends and cycles of commodities prices. If you are a short-term trader, you may want to use the daily or intraday charts to spot entry and exit points based on price movements and technical indicators.

There are many types of charts that you can use to monitor commodities prices, such as line charts, bar charts, candlestick charts, or point and figure charts. Each chart type has its own advantages and disadvantages, and you should choose the one that suits your preferences and needs. For example, line charts are simple and easy to read, but they only show the closing prices of commodities. Bar charts and candlestick charts show more information, such as the opening, high, low, and closing prices of commodities, as well as the direction and magnitude of price changes. Point and figure charts are useful for identifying support and resistance levels, but they ignore time and volume.

Technical indicators are mathematical calculations based on price and volume data that can help you monitor commodities prices and identify patterns, trends, signals, and divergences. There are many technical indicators that you can use, such as moving averages, trend lines, oscillators, volume indicators, or chart patterns. You should select the technical indicators that complement your chart type and time frame, and that provide you with useful and reliable information. For example, moving averages can help you smooth out price fluctuations and determine the direction and strength of the trend. Trend lines can help you draw support and resistance levels and identify breakout or reversal points. Oscillators can help you measure the momentum and overbought or oversold conditions of commodities prices. Volume indicators can help you confirm the validity and significance of price movements. Chart patterns can help you anticipate future price movements based on historical price formations.

Monitoring multiple commodities can help you diversify your portfolio, reduce your risk exposure, and take advantage of intermarket relationships. You can monitor multiple commodities by using a commodity index, such as the S&P GSCI or the Bloomberg Commodity Index, which tracks the performance of a basket of commodities across different sectors, such as energy, metals, agriculture, or livestock. You can also monitor multiple commodities by using a correlation matrix, which measures the degree of similarity or difference between the price movements of different commodities. A positive correlation means that two commodities tend to move in the same direction, while a negative correlation means that they tend to move in opposite directions. A correlation matrix can help you identify potential opportunities for hedging, arbitrage, or diversification.

Monitoring commodities prices is not a one-time activity, but a continuous process that requires constant attention and adjustment. You should review your charts and technical indicators regularly and update them according to the changing market conditions and your trading or investing goals. You should also evaluate your performance and learn from your successes and failures. You should keep a trading or investing journal that records your entries and exits, your reasons for taking or closing a position, your profits and losses, and your emotions and thoughts. You should use your journal to analyze your strengths and weaknesses, and to improve your skills and strategies.

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

Technical Analysis

+ Follow

Thanks for your feedback

Your feedback is private. Like or react to bring the conversation to your network.