Gold tends to be a safe-haven type of investment — something investors turn to when they don&r...
Commodity Traders Almanac 2009
01/01/2009 12:01 am EST
For those of you who have been trading and are unaware of the Stock Trader’s Almanac, you are in for a double treat now, as Jeffrey A. Hirsch and John L. Person have joined together and released the Commodity Trader’s Almanac 2009. Any serious stock trader should have been reading the Stock Trader’s Almanac for years, and now, with the addition of John Person’s expertise, the commodity markets are finally getting their due.
The traditional almanac format for those of you who are not aware is a day-by-day, month-by-month account of the entire year. Commodity traders are familiar with the seasonal tendencies in the commodity markets, and the almanac contains 54 specific seasonal trades for 17 different commodities. A good example of this is the commentary for January 2009, as the Almanac reports “Seasonally speaking we do see in the ten year history of the Euro a tendency for prices to head lower against the US dollar on or about the third trading day in January through the first week of February. The typical holding period is 23 trading days ending on or about February 8th.” This trade has been profitable nine of the last ten years, and the almanac provides the complete trading results for the past ten years.
It should be noted that most of the trades mentioned go back much further as the January gold trade goes back 34 years. There is a seasonal trade in natural gas in February that has been profitable 16 out of the past 18 years. In fact, the last two sections of the Almanac, entitled the “Directory of Trading Patterns” and “Databank,” respectively, list each of the individual trades noted in the month-by-month section of the Almanac. So for the gold trade, you have at your fingertips the trade data for each year going back to 1975, including the profit/loss as well as the maximum profit or loss during the holding period. This type of detailed information will allow the trader to better assess whether the risk/reward is compatible with their individual trading style.
Also included in the “Databank” section is detailed information on each of the major commodities, including not only contract specifications but also the seasonal tendencies, annual highs and lows, and monthly percentage changes that go back to when the contract started trading. The ability to have this data easily accessible is a real advantage, as even with the power of the Internet, I doubt one could easily find this information within a reasonable amount of time.
Interspersed throughout the Almanac are pages discussing several trading and analytical methods. At the end of the January section, there is a short introduction on how the COT, or Commitment of Traders Report, can alert traders to important turning points. Later on, there is also a discussion of pivot point analysis, one of John’s favorite technical tools.
If you are making more than ten commodity trades a year, The Commodity Trader’s Almanac is a resource you should have. Stock traders should likewise take a serious look at the Stock Trader’s Almanac, which is a resource utilized by many professional stock traders.
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