The Correct Method of Analysis

The most efficient and accurate method for analysing a spread

Books and courses on spread trading often repeat the same advice: select a seasonality and compare it with recent years’ prices, buy the spread when the RSI is oversold, or follow chart patterns such as a 1-2-3 Ross low or a double bottom. Spread trading requires a different approach.

Commodity trading cannot be reduced to a standard, automatic strategy, because too many variables affect crops and livestock. Relying exclusively on the seasonal trades recommended by Moore Research and SeasonAlgo, with their predefined entry and exit dates, means overlooking many other potentially valuable trading opportunities.

In Commodity Spread Trading – The Correct Method of Analysis, I present a five-step analytical method in which seasonality is just one component. It does not rely on technical analysis or indicators. It is built on the analysis of market conditions, so that you can judge whether the probabilities favour your position.

The method stems from more than 25 years of experience in financial markets, including my time as a fund manager, with particular emphasis on commodities. This expertise led, in 2018, to a collaboration with one of Europe’s premier investment firms.

Through practical examples, you will learn:

• Techniques for analysing seasonality.
• Principles of fundamental analysis.
• Term structure analysis and contango distribution patterns.
• How to interpret COT net positions.
• How to capitalise on market anomalies and identify the most promising spreads.

Once you have worked through the five steps, you will have a structured way to analyse any spread and to make your decisions with a clear picture of the market.

Read the first 4 chapters for free