People are always asking me if trading is more difficult in our current economic climate. While it’s true that the world has never seen an economic crisis like the one we’re in now but the short answer is “no”. Trading is trading. I’ve been through bull markets and bears and there are always opportunities available if you now how to find them.

Yes, it’s true that Mutual Funds and the stock market are taking a kicking right now, but we’re still fairing pretty well in the commodity world, all things considered. This is because unlike the Stock market, commodities deal with physicals, and in spite of everything the world will still need corn, wheat and oil. The ranges on these markets have increased dramatically within the last year as have the margin requirements – making the mini contracts a much more attractive option for the small trader.

The new economy has changed the way I trade however. I rarely swing for the fences on my trades anymore (although I will run a few trailing stops in the weeks to come) and am content to take my profit when the market gives it to me. While the big moves are great to reflect back on, they are very difficult to manage and hard on the nerves as well. Taking profit when you have it is the only way to go when you don’t know what’s going to happen next.

Remember that multiple contracts is what adds the snap to trading. Small profits + multiple contracts is the big trader’s best kept secret. Sure, it’s not sexy, in fact, when done right it can be downright boring, but we’re here to make money. I’ll look sexier in a new Ferrari than I will trying to nail a swing high or low.

So stick to your guns. Support and resistance trading works, even in these difficult economic times. Don’t going looking for the latest and greatest, because trust me, the answers aren’t there. Remember support and resistance trading is nothing more than identifying supply and demand in action and supply and demand is how the markets work. Learn that and you’ll have the trading edge you’re looking for.

Erich