Commodity Futures You Should be Buying Now

Do you know what commodity futures you should be buying now? A futures contract is defined as “A standardized contract to buy or sell a specified commodity of standardized quality at a certain date in the future and at a market-determine price, which is the futures price.” It can also be thought of as a contract that provides for the delivery of a tangible asset at a particular future date and price.

Do you know what commodity futures you should be buying now? A futures contract is defined as “A standardized contract to buy or sell a specified commodity of standardized quality at a certain date in the future and at a market-determine price, which is the futures price.” It can also be thought of as a contract that provides for the delivery of a tangible asset at a particular future date and price. The commodities that are traded in futures markets include such items as copper, corn, eggs, cocoa, oats, frozen concentrated orange juice, soybeans, wheat and lumber, among other things. 

Before considering which commodity futures you should be buying now you should know that if you wish to invest in commodities and manage futures then it is a good idea to learn about the philosophy of trend following. What trend following does is it emphasizes a disciplined approach to commodity and futures trading. In order to be successful at trend following and commodity futures investing you must be a patient person, a disciplined person and you must be able to actively manage the risk.  Now only must you consider the return on investment but also the amount of risk you will have to contend with in order to reach your investment goals. 

When it comes to commodity futures one of your primary goals must be to manage the risks that come your way when investing and to let the power of positive compounding take place. If you choose to follow the philosophy of trend following then you should get into the habit of utilizing multiple mechanical systems trading under different time frames.   

If you happen to be a trend follower, an investor in commodities and/or an investor in managed futures then right now is an excellent time to buy commodity futures. A number of different commodities have been rising at an extremely fast pace. This means that the opportunity for profits is great. Examples of these include corn, cotton, soybeans, crude oil and gold. There are others that are rising rapidly but these are the ones that stand out the most. For this reason these are the commodity futures you should be buying now.

The CRB Index has been at a high for the past two years. This means that a commodity surge is taking place. If you are a trend follower the reason(s) for this do not matter. If you would like to speculate then low crop yields could be one reason or if you like it could have something to do with the weakness of the American dollar.
However what matters the most if you want to protect your net worth is that you must educate yourself about the market trends and then from there learn to ride them.  Don’t worry about opinions in this case, instead learn the trends. To put it another way whatever is increasing in price is what a trend follower should be watching closely, paying attention to and following. If oats are increasing in price then follow that trend. If it is French fries then follow that trend. If it is orange juice then follow that trend. You get the point. 

As far as what commodity futures you should be buying now, the truth of the matter is that nobody really knows the answer to that. Trends can be here and gone in no time. They can develop almost as fast as they end.  Trends can be unpredictable. This is why it is often recommended that investors make trend following an important part of their investment allocation. Be aware that the markets will always rise and fall and then rise again. They go through cycles of hitting new highs and then having drawdowns. Trend following can be compared to a marathon and it is very much a lifetime strategy.  It is also a liquid and transparent strategy.