Now let’s take a look at the four risk groups of markets available to spread traders -:
Slow Growth Trading:
These are the markets that trade with the lowest volatility most of the time and offer the steadiest long term equity growth through buy and sell combinations while remaining in the markets. The commodities include:
|Eurodollar||Soy Meal||Rough Rice|
As with all markets these can experience extreme times of volatility, which make for faster equity growth. However, for the most part they trend slowly for longer extended periods of time.
These commodities offer long term equity growth potential. These are very fundamentally sensitive markets and swing from extremes of very quiet trades to limit moves. During the moments of the highest sensitivity and volatility limit moves in both directions can been seen in one trading session. With the great volatility within these markets, they offer fast equity growth rates, at a much greater risk.
The markets include:
|CRB Index||Feeder Cattle||Copper|
|Live Cattle||Platinum||Lean Hogs|
Aggressive Growth Trading:
These markets move at a 200%-1,000% faster rate than the Slow Growth and Aggressive Growth markets, with high volumes, no limit moves, 24 hour international trading and great sensitivity to international news and rumors.
These markets not only offer incredible equity growth opportunities, they also are commensurately more volatile, which means extreme risk of loss and a need for the equity to allow for large drawdowns.
These markets include:
|Swiss Franc||Japanese Yen||British pound|
|Canadian Dollar||Australian Dollar||Eurocurrency|
|Mexican peso||US Dollar||Nikkei Stock Index|
|Unleaded Gas||Natural Gas||Crude Oil|
|Heating Oil||5-Yr Notes||T-Bonds|
|10-Yr Notes||Bund Bonds||UK Gilts|
These are the markets that when entered can either build your equity at the fastest rate or will make it crash and burn. You should be willing to experience large equity fluctuations from both an intraday and daily equity basis. These commodities can bring about the daily and weekly trading homes runs to juice up your equity growth.
While most of these are index futures, others are in this group not based on margin but based on their history of volatility.
These markets include:
|Coffee||Orange Juice||NYSE Composite|
|S&P Index||Value Line||NASDAQ 100|
|Russell 2000||Dow Jones||Dax Index|