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How do I calculate the risk in a commodity trade?

To work out the risk based on your stop loss for a commodity trade you need to know how many increments the product can move before your stops kicks and stops you out.

Then once you know how many increments it can move, you then multiply that by the value per increment.
For example, if we have a long trade for the Emini S&P 500, with our entry price of 1060.75 and our ATR puts our stop loss at the price of 1019.25.
We need to work out the difference.  The easiest thing to do is just take the lower value off the higher value ( this is important for a short trade).
So 1060.75-1019.25=41.5 increments.
Then you need to know what is the smallest increment the product can move (found on the Commodities paper trader spreadsheet).  In this case the S&P Emini moves in whole points and they are broken down into .25 or 1/4 increments. So one whole unit is broken down to 1/4s.
We also use the spreadsheet to find out what each whole point and what each increment is worth.
In this case, 1 point is worth $50 ( from 41 to 42 for example), each smallest increment ( 1/4) is worth $50/4= $12.50(41.25 to 41.50).
So back to our example at the top- 1060.75-1019.25=41.5 ( so thats 41 whole points and .5 is two increments.
41 points worth $50 each is $2050, and .5 at $12.50 per .25 is worth $25.00
So our total max risk is $2075.00
You can do exactly the same for all products, please note most commodities have different incremental movements and values.  All the information is on the Profit Looks ups tab of the Commodities paper trader spreadsheet

What time does the Commodities Update

You can find out what time the commodities update, in the members area.

Select members tab > login to the members area using the monthly generated username and password.

What do the Red and Green Lines Represent?

Aussie Rob’s Lifestyle Trader tracks “Supply & Demand”, therefore, to keep things simple, think of the Green line representing the “Buyers” and the Red line representing the “Sellers”.

When you have more Buyers than Sellers (Green line above Red line) in a market, the price should go up.

When you have more Sellers than Buyers (Red line above Green line) in a market, the price should go down.

Where can I find the Commodity and Forex paper trading spreadsheets?

Visit www.lifestyletrader.com.au > Login to the members area > Click on Downloads tab

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