Active investment in commodity futures can be divided into trend trading and arbitrage trading.
For trend trading, we must first determine our own trading basis, such as making decisions based on various technical indicators or commodity fundamentals. These foundations guide investors to judge the price trend of commodity futures and eventually form investment positions. For example, investors who believe in the trend can find out the commodities with the biggest ups and downs in the past three months, open long positions and short positions respectively, and then hold them for one month before closing positions. This is a typical trend trading strategy.
Arbitrage trading does not judge the price trend of commodity futures, but makes profits by forming two positions in opposite directions and relying on the price difference between different futures contracts. Arbitrage trading focuses on the analysis of the spread of commodity futures, which can be subdivided into intertemporal arbitrage, cross-market arbitrage and cross-commodity arbitrage. For example, Zhengzhou Qiangmai, at a certain point in a year, the price difference between two adjacent contracts will suddenly increase, which provides an opportunity for inter-period arbitrage. Before the spread is enlarged, multiple positions open a strong wheat contract, and at the same time open an empty position for the next strong wheat contract, and then wait for the spread to change before closing the position for profit. Even in the process of arbitrage, strong wheat has unexpected ups and downs. As long as the spread changes in anticipation, the arbitrage result will not be affected. Obviously, the risk of arbitrage trading is smaller than that of speculative trading.
This information does not constitute any investment advice, and investors should not use this information to replace their independent judgment or make decisions only based on this information.