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Verona8

Cotton, Oil and Currency

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Hello,

 

My name is Vera. I am supposed to do analytics for cotton, oil and currency.The problem is that I never did that before, just browsed internet and observed prices and shor-term forecasting.Well, it was even not my opinion.Could you please help with sourses of information which I can use to forecast trends of cotton, oil prices.Our company buys monthly these commodities and we always need to know in which volumes to buy without losing.

many thanks in advance and sorry for my not "pure"English.:)

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So we need to know will it be the increase or decrease of price next month, next 2-3 weeks. We regularly purchase oil and cotton and intuitively define the volume, so is there an opportunity to forecast the prices, to know the tendency of their change?

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Welcome Verona, I think this is the reason why we're all here, understand the market and possibly learn how to predict the market. That's the Holy Grail for everyone but unfortunately, the best way to anticipate is using technical analysis or fundamental analysis. Since you're expecting 2-3 weeks of forecast, might want to try technical analysis. Go through this site, I'm sure you'll learn something worthwhile toward your objective.

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Welcome Verona, I think this is the reason why we're all here, understand the market and possibly learn how to predict the market. That's the Holy Grail for everyone but unfortunately, the best way to anticipate is using technical analysis or fundamental analysis. Since you're expecting 2-3 weeks of forecast, might want to try technical analysis. Go through this site, I'm sure you'll learn something worthwhile toward your objective.

 

Hello,

Thank you for your comments. This web page is very interesting for me. Please , I need your advise, will these books be useful to read at the beginning: books by Van K. Tharp and One by Michael N. Kahn “Technical Analysis Plain and Simple”

Many thanks.

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Yes, Van Tharp is good but not a complete book for beginners since it's not comprehensive. I've never heard of Kahn so I can't comment. You can go to Amazon and check out Alexander Elder, John Murphy, Edwards and Magee. These should get you started. Check book reviews on this site as well. Hope that helps.

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Fundamentals and seasonal tendencies might be of some help too.

I can't really recommend any books since my focus is very short term so I have little use for such methods. Think Jack Schwager covers some of it but his book is already pretty old, might still be worthwhile though.

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So really you want to hedge against price changes rather than speculate? Either way your company is likely to end up loosing money or is this some sort of 'test' to see if you are suitable for the job? I'm kind of confused why a company would put this in the hands of someone with no experience.

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It sounds like your just getting your feet wet in the world of trading. Its my opinion the best book for an absolute beginner is John Murphy's book introduction to technical analysis. If you look hard enough you can get an ebook for free on the internet. i won't give the exact link here because this site (T.L.) is a top notch reputable site. However, over at the stock market forum for India at http://www.traderji.com they don't respect copyrights and you can find links to just about any trading ebook floating around the net.

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You want to look for resources on commercial hedging strategies in the futures markets. A number of them exist but I don't pay attention to them because I'm not a hedger. Cotton is traded on ICE, Oil on NYMEX or ICE.

 

I too wonder why your company would ask you this. Hedging is pretty involved and could be complicated (I don't know), and done incorrectly could produce a surprise for the company.

 

I don't think the types of books you mentioned are useful to you (they aren't intended for hedgers), since it will take a huge undertaking just to research HOW to hedge, you better start there.

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So we need to know will it be the increase or decrease of price next month, next 2-3 weeks. We regularly purchase oil and cotton and intuitively define the volume, so is there an opportunity to forecast the prices, to know the tendency of their change?

 

No there really is no way to accurately do this for commercial reasons in production & the immediate purchasing of raw materials. See my previous post - I think this will steer you in the right direction and I hope that info helps.

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You might want to look at COT (commitment of traders), a report that reveals who buys/sells what and at what volume. Many use these to gauge the market tendencies. Google these words for some info.

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