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Strategies & Market Trends : Commodities - The Coming Bull Market
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To: Ed Ajootian who wrote (1519)3/5/2003 10:58:42 AM
From: Robert Douglas  Read Replies (1) of 1643
 
When you are playing the long-term trends, how do you deal with the blips that inevitably occur along the way? I understand that if the market moves against you even a small amount you can get huge margin calls due to the high leverage that a commodity futures contract has vs. owning the commodity itself.

You have hit on the most important aspect of speculation in commodity futures.

My rule is that I never take a position too big that I can't ride it through a significant period of loss.

Once in a while, I do take a bigger than normal size position. When I do that, I have to set limits on how far it can go against me. But, as you can see, this is just market timing and is not what I'm all about.
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