The latest The Spread Trader segment.

The Intersection Between Technical Analysis

and

Commodity Futures Spreads 

I, Brent Futz have worked as a commodity futures trader over a period that spans seven US presidents and two marriages. 

That period also spans the evolution of commodity futures trading from the trading floor era to the introduction of electronic trading. 

With respect to trading strategies, advances in technology have led to the adoption of technical analysis and to a trading community that didn’t exist 40 years ago. 

The transition from open outcry to electronic trading has had another effect on trading strategies; today, many do not address the mechanics of futures trading, specifically the relationship between contracts known as calendar spreads. 

What hasn’t changed is the relevance of spread trading to markets; in fact, it is perhaps more consequential than ever. 

Trading communities are polarized, and traders identify themselves as either fundamental or technical analysts.

Either of these communities can benefit from an understanding of spread trading, an often misunderstood dimension of commodity futures trading strategies.