The first thing every potential investor in the commodities markets and stock markets for that matter needs to know is that you have to run your own business to be successful. You cannot rely on a friend, the barber, the newspaper boy, your wife to make the investment decisions that only you can make in order to be successful, and this list includes your broker. Financial investment brokers are for the most part very efficient, capable professionals who derive their income from salaries AND commissions charged to the investor so it behooves the investor to make his or her OWN decisions and NOT turn their account over to suggestions by the broker. For one thing simply to avoid being switched from purchase to sale, purchase to sale in order to generate commissions for the broker. Another reason is that the broker while they may be on top of what the current trend in the market is, knows no more about where the market is going than anyone else. Otherwise why are they working for commissions?
In order to run your own business and the only way to know what is happening and going to happen in any market is to refer to historical charts. Charts will tell you historical highest prices in the market selected, lowest price historically in the market selected, recent fluctuations up and down, buyer and seller activity, seasonal changes, environmental changes, and it will reflect before the news, world events. All of this simply from a set of commodities or stock markets price charts. When you see the news on television, it has already occurred in the markets, too late to take advantage of. But charts show something else. They show the pattern of rising and falling markets which is the only way money is made or lost in the markets, in other words in moving markets.
The typical market pattern of behavior is for there to be an accumulation phase where prices are low and not rising or falling much for extended periods of time. This is a good time to watch that market for a break or rise off the lowest high which could indicate the beginning of mark up. For investors who intend to profit in any market you must buy while the investment is low. Although the true secret to any form of investing is to “buy low in quantity at a volume discount lot price” and hold. This can be said in reverse for selling. “Sell high in the most quantity and continue to sell as prices fall”. This means that you do not sell everything necessarily but profit slowly as the market drops.
While buying comes before mark up or during the initial phase of mark up, how do you know when to sell? This question is made simple with charts because the next phase is distribution which involves high market activity and higher prices than what you purchased for. So accumulate at the bottom, hold during mark up, sell at distribution and move on as it will take several years after mark down for that market to be ripe again for accumulation or mark up. And so that is the model of the typical price history of any market be it stocks or commodities and can be seen in market after market repeatedly in charts over time.
Just remember a broker is an order taker and do not rely on them for what you should do. Having said that a broker can be a very valuable asset over on line trading without a broker for example. You can be reasonably confident that your broker will get your order right if you relay it correctly because he takes orders every day. Also you have at your disposal another professional watching over your account to make sure you don’t fall into trouble and that is worth all the brokers commissions in itself. Shop for your broker and discuss commission costs and be upfront and ask if the broker has any problem with you making your own investment decisions without needing his advice and make sure you know what you are doing to be a responsible investor.