How to Read a Commodities Chart

July 29, 2024November 5, 2025 FandC101 809 Comments

How to Read a Commodities Chart | Futures & Commodities 101

Learn how to read commodities charts as a technical trader. Understand price trends, volume, and volatility so you can make confident trading decisions.

📈 Why Every Trader Needs to Master Chart Reading

One of the first questions I get from new traders is, “How do you know when to buy or sell?”
My answer is simple: you learn to read the chart.

Charts are the language of the market. They tell you where prices have been, where momentum is building, and where smart traders are likely to position themselves next.

If you can learn to read charts — even the basics — you’ll trade with more confidence, patience, and accuracy.

So let’s break down exactly how to do it.

🧩 Step 1: Understand What You’re Looking At

A commodities chart shows you how the price of something — like gold, oil, or corn — moves over time.

The common types you’ll use are:

Line Chart: Simple and clean; shows closing prices over time. Great for spotting general trends.
Barchart: This chart type uses vertical lines that represent price data on the chart. This chart type allows you to see if the closed higher or lower than it opened. This chart type shows the range or volatility of price within the selected timeframe. Each bar on a bar chart contains four very important key price points:
- Open: A short horizontal tick located on the left side of the bar
- Close: A short horizontal tick located on the right side of the bar
- High: The very top of the vertical line
- Low: The very bottom of the vertical line
Candlestick Chart: Each candle shows the open, high, low, and close price during a certain time period (like 1 hour or 1 day).

The body of each candle tells you who’s in control — buyers or sellers.

A green (or white) candle = price closed higher than it opened (bullish).
A red (or black) candle = price closed lower than it opened (bearish).

Once you know this, the chart stops looking random — and starts telling a story.

The CME Group offers resources to understand market charts and price movements in futures trading: CME Group Education.

📊 Step 2: Identify the Trend

Here’s a simple rule every trader should memorize:
Trade with the trend — not against it.

To identify the trend:

Look for higher highs and higher lows → uptrend.
Look for lower highs and lower lows → downtrend.

Traders lose money fighting trends. Professionals ride them.

Use Barchart.com to practice chart analysis with live commodity data and historical trends.

🧠 Step 3: Use Support and Resistance Levels

Support and resistance are key price zones where markets often pause or reverse.

Support
Resistance

Mark these levels on your chart — they help you time entries and exits.

Investopedia provides clear tutorials on technical analysis and chart reading for traders at all levels.

📈 Step 4: Watch the Volume

Volume shows how many contracts are being traded. It’s the fuel behind price movement.

When price rises on strong volume, it means big players are active — and the move has strength.
When price rises on weak volume, it could be a temporary bounce.

High volume confirms that a trend is real. Low volume warns that it might fade fast.

⚙️ Step 5: Learn how proper risk management

Technical indicators can help you confirm what the chart is already showing. Some reliable ones for beginners include:

Margin/Maintenance: To enter a trade, you must have the required margin, and to remain in the trade each day until you exit the trade, you must have the proper maintenance.
Never risk more than 10% on any single trade: Every trade must be managed so that you do not risk more than 10% of your account balance.
Risk to Reward: The amount you are willing to risk should always be lower than the amount of your reward or profit.

Tip: If you are not confident about the trade, do not take that trade.

🪞 Step 6: Practice Chart Reading Every Day

Chart reading is like learning to play an instrument — the more you practice, the more fluent you become.

Set aside 15–20 minutes each day to:

Review your favorite commodity charts
Identify trends
Draw support/resistance levels
Write down what you think might happen next

Then check back later to see how the market behaved. That feedback loop will build your intuition fast.

🧭 Step 7: Combine Charts with Fundamentals

Charts tell you what’s happening now — fundamentals tell you why.

Pay attention to:

Weather patterns (affect crop markets)
News announcements (Economy news)
Economic reports like inflation and interest rates

Combining both perspectives — technical and fundamental — gives you a real trading edge.

💬 Final Thoughts: Read the Market Like a Story

Every chart is a story of human emotion — fear, greed, patience, and discipline — all playing out through price action.

Once you learn to “read” that story, you’ll stop reacting to noise and start trading with purpose.

You’ll see opportunities others miss. You’ll have a plan when others panic.
And most importantly, you’ll understand why the market moves the way it does.

If you’d like to learn hands-on with real charts, join us for our next Futures & Commodities 101 Mentorship Program or our Annual Trading Retreat — where we break down live markets together.

👉 Visit FuturesAndCommodities101.com/mentor to start learning with us.

Fundamentals