Four Principles of Commodity Market

# Principle No 1. In commodities, wherever the cash price of a commodity goes, the future price of that same commodity will generally follow.Future price may fluctuate in a range a bot more or below cash prices but not never vary far.


# Principle No 2. When cash prices advance or decline out of a long narrow trading range, they will usually continue to advance or decline for several weeks or months before returning to their original price level.

# Principle No 3. Since Future prices follow cash prices, never by commodity futures contract unless you anticipate an advance in cash prices. And never sell commodity future contracts unless yo anticipate a decline in cash prices.

# Principle No 4. If you do decide to buy, don't buy until prices actually do advances. If you do decide to sell, don't sell until prices actually do decline.