A wide range of commodities can be traded on global futures exchanges centred in the major commodities exchanges in the US. The range runs from agricultural commodities (meats, grains, 'softs') through to metals, energy, and financial instruments.

These commodities are an excellent speculating vehicle, combining leverage, low commissions, tight spreads, and high levels of liquidity. Our framework aids newcomers to the market by helping them avoid common pitfalls, and also helping make them aware of alternative instruments that present better risk-controlled exposure - relative to standard futures contracts - to the underlying commodity.

MarketMentat's Commodity Workbench uses a structured volatility-based approach to the development of a sustainable commodities-trading methodology. It is designed specifically by futures traders for futures traders, but is kept as simple as possible to enable those unfamiliar with commodities trading to examine the merits of including this category of invesment instruments into their overall investment program.

We start by partitioning the commodities 'universe' according to the underlying volatility of each market. With each commodity placed in one of five risk categories (with the volatile S&P500 and Nasdaq100 index futures in the most-risky category), we utilise Technical and Sentiment analysis to determine potential trading opportunities - concentrating on markets where the fundamentals are well-understood.

As with our approach to Equities, we attempt to integrate all facets of our analysis into the Commodities reports. Whether it is assessing the likely ramifications of Mad Cow disease in the Live Cattle market, or the implications of poor fiscal policy for the Bond market, our underlying grasp of the fundamentals enables us to get an idea of where the 'attractor' is for prices. From there we attempt to plot a technical/sentiment based course towards the attractor - while periodically examining our fundamental analysis to see that our 'base' analysis of the fundamentals, still holds.