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commodities charts show us initiating and responsive activity in the commodities market. In commodities charts we can spot new trends or sideways movement when commodity trading.

commodities charts show us initiating and responsive activity in the commodities market. As commodity traders, It is important to know if market participants are looking at commodity charts whether initiating in their trading or responding in their commodity trading to the commodities market. This kind of activity determines new trends or sideways movements in the market.

What is and how to look for Initiating Activity in commodities charts:

When Market profile users and commodity traders use the term "Initiating activity" when looking at commodities charts, they refer to the activity of moving the commodities market to new levels, which means, break outs and break downs from consolidations. These break outs to the upside or break downs to the downside are the cause of new commodities market trends.

When the commodities market opens above (or below) the previous day's value area when using a commodity trading system and DOES NOT get inside the previous day's value area we have initiating activity.

Initiating Buying in commodities charts:

Every time that the commodities market opens and stays above (it is important that it stays above) the previous day's value area, we have a bullish signal.

When this happens, you have commercial and institutional buying getting into the market. When the commercials and institutions (Long-Term Participants) are long, you don’t want to put on a position opposite of what they are doing since it will cause lots of harm to our commodity trading. The best chance to profit on a day like this will be from the long side.

commodities charts Buying dips in the commodities market to get long will be the best strategy (buying the pull-backs). In fact, I would say that when the commodities market has opened above and stays above the value area, we should not be short for any reason.

Otherwise We will be standing in front of a freight train in full momentum.

Initiating Selling in commodities charts:

Just the opposite of initiating buying, every time that the commodities market opens and stays below (it is important that it stays above) the previous day's value area, we have a bearish signal.

When this happens, you have commercial and institutional selling getting into the market.

When the commercials and institutions (Long-Term Participants) are short, you don’t want to put on a position opposite of what they are doing. The best chance to profit on a day like this will be from the short side. Selling rallies in the market to get short will be the best strategy.

In fact, I would say that when the commodities market has opened below and stays below the value area, we should not be long for any reason.

Important Fact: Remember initiating activity, either buying or selling, are break outs and break downs (beginnings or continuations of trends in the markets).

Normally this break outs to the upside or break downs to the downside that start or continue trends are caused by important NEWS and fundamental reasons going on and moving the commodities market.

Commercial and big players buy, sell or adjust their long term positions according to fundamental reasons like News, expectancies, new long term demands of products, new companies, a good country to invest in, price of crude oil, gas, gold, cattle, etc, moving HUGE amounts of money.


What is and how to look for Responsive Activity in commodities charts:

Simply the opposite of initiating activity in the Market. When the market is above (or below) the value area and DOES GET into yesterday's value area we have Responsive activity. Look at responsive activity as a Sideways, Balance, in range or bracket commodities market. commodity market

Responsive Buying in commodities charts:

Every time that the commodities market opens below yesterday's value area and buying starts coming into the commodities market (The market starts moving higher when it is below the value area).

Buyers are “responding” to the commodities market being below the value area, and they are attempting to buy the market cheap, thus pushing the market back toward the value area.

When we get responsive buying in the market, there is a good chance we will see the 80% rule come into play.

Responsive Selling in commodities charts:

Every time that the commodities market opens above yesterday's value area and selling starts coming into the commodities market (The market starts moving lower when it is above the value area). Sellers are “responding” to the market being above yesterday's value area, they are attempting to sell the commodities market at higher prices than yesterday, thus pulling the market back toward the previous day's value area.

When we get responsive selling in the commodities market, there is a good chance we will see the 80% rule come into play.


Well My friend this sums up important facts that we have to take into account when looking at our commodities charts for commodity day trading, just remember there are two market activities created by commodity traders.

Initiating or Responsive activity.

Knowing this two kind of activities can help us be in the "right" side of the commodities market, avoiding stepping in front of trends which could harm our accounts, or trying to predict a new trend when there is no initiating activity.


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