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Want to be a Successful Trader?

Successful Traders like to see where the edge is and seize it every time it appears! Our Commodity Spreads Program was developed with this in mind, by taking advantage of one of the very few true edges we see in the market: The Goldman Roll and Long Only Commodity Funds. Seize the edge, sign up for our Commodity Spreads Program and trade your first 60 days complimentary!

Now, more than ever, investors must have a true diversified portfolio. Diversification can no longer be defined by owning some stocks, bonds, real estate and cash. For those investors still locked into that pattern of investing, the net results for the last couple years can honestly be described as disastrous. The argument can be made that eventually the markets will come back to previous levels, thus erasing the incredible losses suffered the last year or so. Yes, it is comforting to see how well the indices have rebounded from last year's lows. Unfortunately, it does not take much to rattle and derail this fragile recovery. A sound portfolio cannot depend on markets being constantly on the upside in order to be growing. In recent years, the majority of American investors believed that by allocating their assets between tech., banking, industrial, and international stocks, as well as some real estate and bonds, they would be diversified enough and protected from major losses. That diversification preached by most media and financial institutions was an illusion: most people witnessed the worst decline in their portfolio ever. Unfortunately, most people took their losses and converted to cash, waiting for better days...in order to re-invest the same old way! Will it take another precipitous drop in the markets for people to realize that the old way of investing is no longer efficient and is actually dangerous to their financial health? As this article is written, another crisis is unfolding in Dubai, with unknown effects and consequences for the global banking system and the rest of us. It is time to add new financial instruments beside stocks, bonds and real estate.

One of them is an obvious one: Commodities . Over the years, only professional traders have had access and knowledge to trade commodities. For most people, trading commodities conjures up this picture of risky investment for high-heeled investors and institutions. In recent years, the emergence of large amounts of money in the "long only" commodity fund has had a profound impact on the market. Prices of commodities have been rising due to the participation of major institutions and investors looking for better returns than equity markets. For most investors, trading commodities can be tricky. Trading commodity with the same approach as trading stocks, by being long only, is a mistake. Besides deciding when to buy, what to hold or when to sell, the issue reverts to the fact that profits are generated only when prices go up. Profits should be made, whether the prices go up or down. In the case of commodities, the best approach is to use Spreads, where profits are generated by the price difference between the same commodities but during 2 different contract periods, usually future contracts. Regardless of the direction of the Market, this trading method can generate profits.

How would a Commodity Spread program work?

The program enters spreads between different contract months in the same market. The spread trade is entered several months from expiration and always exits at least one month before expiration of the nearby contract. By exiting the trade before the last month of trading, the spread avoids the very dangerous moves that spreads often make just before expiration. Besides making money regardless of market directions, Spread trading has many advantages.

One of them is the fact that this type of trading is not being overused, thus holding the potential for tremendous rewards for those using the right approach. Spreads act like a true market with consistent trends and predictable behavior. As most experienced traders know, when too many people jump into the same strategy, it eventually stops working. In the early days of trend following, traders made huge profits on trends that seemed to last forever. However, in recent years since tens of billions of dollars began chasing these trends, the success of this type of strategy has dropped dramatically and major draw downs have begun to occur.

Another benefit to investors is the fact that margins on spread trading can be very low, allowing a much higher return on their margin, as well as the ability to truly diversify by trading a basket of uncorrelated commodities at the same time, commodities such as Crude Oil, Wheat, Silver, Live Cattle or Coffee.

Spread trading involves trading futures positions but is considered less risky than outright futures positions.

There are Commodities Spread programs such as the Alpha Spreads programs offered by PowerTrade International, which are fully automated and do not necessitate active investors' participation. Several levels of initial investments are offered, with some as low as $15,000. Those types of programs have been trading for a few years and are ideal to incorporate in a portfolio, especially one that does not have any commodity program. Go here to learn more about our Commodity Spreads Program.

After selling his computer Network Company in the late nineties, Pascal Gressier got involved in trading the volatile market of currencies. He quickly moved to day trading the S&P500 and NASDAQ using a system developed by TCI Corporation. Besides trading, Pascal conducted seminars and training throughout the Country, mostly on trading Futures indices. He also developed and tested automated trading systems using TradeStation and CQG as platforms. He has also worked with several system developers by promoting their technical indicators as well as their fully automated Trading systems throughout Europe and Asia. Lately he has focused on trading commodities by using Spread programs. He is presently a business Consultant and licensed Commodity broker working with PowerTrade International. Over the years, he has been the author of multiple Newsletters and articles. He presently resides in Orange County California.

Want to be a Successful Trader?

Successful Traders like to see where the edge is and seize it every time it appears! Our Commodity Spreads Program was developed with this in mind, by taking advantage of one of the very few true edges we see in the market: The Goldman Roll and Long Only Commodity Funds. Seize the edge, sign up for our Commodity Spreads Program and trade your first 60 days complimentary!