Recent content by Don Dawson

I received an email from a student in Singapore regarding the margin for Spread trading and where to find it. Spread trading is gaining more popularity, even internationally based on the emails I have been receiving. Let’s now look at two different Futures Exchanges and identify the process of...

Futures’ trading has been around for hundreds of years. Even before Futures Exchanges existed trading was done by either a handshake or a forward contract. Producers and Processors of Commodities both have always needed a way to protect against price risk. The Producer, who owned the...

One of the charting differences between Equities and Futures is that some Futures trade for almost 24 hours per day. Once Equities stop trading at 16:00 EST, the last price that a trader sees on their chart is usually the closing price. The next morning when the market opens at 9:30 EST and the...

I started my 24th year of Futures trading this month and have been reminiscing about the path that the Futures industry and I have both taken during this time: Instant fills on electronic platforms compared to waiting minutes to hours for a price fill from the exchange floor No more watching...

Spread trading is very good for the smaller account traders after they figure out how to trade Spreads. The capital required to trade these Spreads is a fraction of an outright Futures contract. Figure 1 shows a comparison of a Corn Spread to an outright Corn position. Figure 1 Spreads...

As we start the New Year, we look back on 2010 and find that Commodities outpaced any other asset class with a 15% return based on a basket of Commodities. Compare this to Stocks 13%, Bonds 5%, and Dollar-based trades of 2%. Why is this? For starters, we are in a secular bull market for...

Many of us are already using support/resistance levels to locate possible turning points in the markets. We can identify these by looking at multiple time frame charts. Depending on your style of trading (investor, swing trader, day trader, etc), you could use two larger time frame charts to...

Learning to trade is much more than just learning a strategy and applying it. In my classes I try to emphasize how important the psychological side of trading is to your trading success. This is why we could give 10 traders a completely mechanical trading system with very specific rules, and at...

As we come into the growing season for many of our agricultural Commodities, there will be numerous opportunities to trade the volatility created by weather, crop estimates and other fundamentals. I mention the agricultural markets because they offer some of the finest opportunities. However...

Each year as we prepared for these holidays, we planned for all those we had bought gifts for and careful thought was put into each person's gift: * We planned where we will shop for the gift * Our trips to the stores were planned to eliminate too much back-tracking * Consideration for the...

Through my years of trading, one thing I have found is that one strategy does not fit all. We all have different risk tolerances and monetary goals. One of my goals in each E-mini Futures class I teach is to show the students a strategy and have them take it home and use it as a foundational...

Every year at New Year we hear of people making resolutions of all varieties. Have you ever noticed that these resolutions are usually made without any serious thought or planning involved? This is the difference between a resolution and setting goals. Goal setting is: A focused plan based...

Ever wonder what makes a winning trader consistent? In my opinion that consistency is due to the trader having his own "edge" over other traders. This "edge" is what each trader must find for himself. Often traders focus on their results so much that they forget that every other trader in the...

This week I would like to discuss Spread Trading in Commodities. I will write future articles on this topic as it would be near impossible to cover all aspects of this method of trading in one article. This article will be an introductory lesson on Spread Trading in Commodities. Welcome to...