Updated on July 18, 2023
In the commodity market, a trend day refers to a trading day when the price of a particular commodity moves consistently and predominantly in one direction throughout the session.
A trend day in the commodity market signifies a strong and sustained movement in either an upward (bullish) or downward (bearish) direction for a specific commodity. It indicates a clear and dominant market sentiment for that day.
How to identify and trade on trend days?
During a trend day, the price of the commodity tends to make higher highs and higher lows in an uptrend or lower highs and lower lows in a downtrend. This movement is typically accompanied by increased trading volume, indicating significant participation from traders and investors.
Traders and investors in the commodity market often pay attention to trend days as they can offer profitable trading opportunities. If there is an uptrend, traders may consider buying the commodity and riding the upward momentum, whereas, in a downtrend, they might consider selling or short-selling the commodity to profit from the downward movement.