In this paper we will discuss about commodity futures trading system. We will analyze what is commodity futures trading first, then describe the operations and utilities of the system. In the later half of 19th century the Chicago Board of Trade was founded as a commodity futures exchange.
After that, many other commodity exchanges had been established in US. Now days, commodity futures trading system is an important trading tool in the global market. To develop their own commodity trading system a trader needs to identify the system type. A traditional commodity futures trading system basically shows the current market trend. This kind of system uses Moving Average as an indicator of the market trends.
Commodity futures trading system can also be designed using the Break Out systems. These systems are normally used in that market where the prices fluctuate in between the support and resistance level.
If a price exceeds a support level, that is, breaks out, then price is more likely to come down. On the contrary, if the price level breaks out of the resistance level then, there will be an increasing trend.
After the completion of designing a commodity futures trading system, the traders may use charting software to construct the system. This software enables the traders to enter the trading formulas and specify the time constraints.
Like many other financial trading, like stock, savings accounts, bonds etc, commodity futures trading has also some advantages and disadvantages. But one can make huge profit within a short span of time through commodity futures trading.