Which Chart Type Should You Choose For Trading Commodity Derivatives?

Comparison of Robusta May and Spot Charts

For Breakout Traders:

• Robusta May Chart: Price has broken through the resistance zone with a strong candle, indicating a continuation of the uptrend.
• Robusta Spot Chart: Price also broke through the resistance zone, but then reversed back inside the zone as shown by a long-tailed Doji candle at the resistance level. This indicates a further price decrease.

The Robusta May chart shows an increase, while the Robusta spot chart shows a decrease. Which chart should we trust?

The answer is that both charts are currently showing unclear signals. Since the price action is unclear, it is not advisable to trade. It is better to wait until the price converges (breaks the resistance zone) to confirm the trend and then trade. Remember, no one is forcing you to trade. You have control over your own decisions.

If you want to trade immediately and don't want to wait: It is better to trust the spot chart because it reflects the actual price movement.

With the lack of confluence in the above chart, when can we continue trading?

Wait until both charts (spot and May) break through the support zone (OB) to confirm the downtrend. At that time, we will establish a short position with more confidence due to the confluence between the two spot and May contract charts.

H1 Chart: Confluence of Robusta Spot and Robusta May Futures Charts

Robusta Coffee Trading Recommendation

Bearish Trend Dominates Robusta Coffee Market

The price has broken through the resistance zone at $3278/ton, strengthening the downtrend. In yesterday's trading session, the price continued to return to the OB resistance zone and continued to decline, further supporting the current downtrend.

However, Robusta coffee has formed an upward trendline. We need to monitor whether the price will break through this trendline. If the price breaks through and then retests, this will be a good opportunity to establish a short position.

For investors who are holding long positions from before: We recommend closing the position when the price breaks through the trendline.

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