Commodity Futures Trading

Details

Category: Trading

Did you now that the official commodity exchange settlement price and the actual closing price are frequently different and quite often are changed some time after the actual trading ceases? Commodity futures trading system research was done using data from the Chicago Mercantile Exchange (CME) Live Cattle market over a 4-1/2 month period. The trade results probably would be similar using data from most other futures markets but we have not verified that to be correct. Using our commodity Price Quotes Machine we made a note of the price exactly 30-minutes prior to the market close each trading day. On the next day we noted the opening price, the day’s high/low range above or below the open, and closing price. Days were ignored if the 30-minute price and the subsequent closing prices were the same.

This test has some good statistical validity. It seems to us a good commodity futures trading system could easily be developed based on this technical research. Unfortunately, the percentage numbers may not be quite strong enough to make any potential commodity futures trading systems too reliable or extremely profitable. However, with more extensive market research involving a number of diversified trading markets, and using good money management skills combined with a tested and sound trading plan, any potential trading system based on this research could in fact be nicely profitable with reasonable low-risk. Additional research needs to be done on this subject to decide on the reliability of any potential commodity trading system or trade methodology based on this concept.