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Advices and Tips on Commodity Trading

sandysr
Sep 21 2016 at 10:24
posts 4
It’s pretty difficult to survive for long in the commodity market. The price fluctuations are completely unpredictable; and it is also very difficult to identify any trend which could be said to possess a statistical edge in the market when compared to the numerous other trends. However, don’t lose hope or get discouraged as of yet; because there are still a large variety of ways in which one can find their way around the pitfalls and master the art of trading.

The very first thing that a lot of traders do is to head for the libraries and read up voraciously on everything related to trading commodity futures. That’s a commendable thing to do by all measures; however, there’s a bit of problem with that. The theories that are generally mentioned in books and internet blogs/e-books are of quite little use in the practical world out there. A lot of famous and well-respected authors of such books are known to put forward theories and practices which might result in losses for the trader (when he/she puts the theory to test in the market). Therefore, a lot of those theories may look good, but are actually quite impracticable when it comes to dealing with the real market.

A few people would seek out experienced traders and hire their advice, maybe in exchange for a fee. But like expert tips, this method is not very likely to work out either. This is because, the trader who’s looking for advice, would be a completely different person from the advisor that they would seek out to guide them in the subject of trading. May be the beginner does not have an equal amount of capital to invest and is completely inexperienced. And last but not the least; their thinking pattern may not be identical to that of the veteran trader’s. In the light of all these, the question which inevitably comes to mind is: Is there at all a ‘way’ to get successful in the field of commodity trading? There’s no certain answer to that. While it is definitely possible to list out a number of generic advice points and cautionary notes which generally prove to be beneficial for traders the majority of the time, there is no absolute rule-book for success. But let’s hear those advices anyway:

• One should resist the temptation to over-trade. Putting a large sum of money on any single trade would mean kick-starting a cycle of losses. This is especially true if the commodity being traded is very expensive; such as platinum, crude oil or precious stones. In case the person happens to suffer a loss, the hurt will be multiplied manifold if the invested amount was a big one. And the spreads should be kept as short as possible.

• In order to be safe, traders should trade within short spreads till the time they’ve gained enough experience to be able to differentiate between genuine and false upside breaks.

• A lot of times it’s seen that most traders do not invest enough time and hard work when it comes to trading. Instead, they use it as a hobby which can provide profitable returns from time to time.

HenritteC
Jan 11 2017 at 08:22
posts 18
sandysr posted:
The very first thing that a lot of traders do is to head for the libraries and read up voraciously on everything related to trading commodity futures. That’s a commendable thing to do by all measures;


I think this I can help you in providing a good library of good write ups about commodity, you can check this link: https://itrader-commodities.com/ if you want :)

xgavinc
Jan 11 2017 at 15:13
posts 235
I would recommend having equity CFD trading experience first, and at least a theoretical knowledge of Options (Put and Call [Plain Vanilla]) before attempting leveraged commodities.

For every loss there should be at least an equal and opposite profit.
mp28
Mar 22 2017 at 07:16
posts 6
By staying in the same direction of the trend, we allow other traders in the market to push forward trade, and help you to reap more profits. This is perhaps one of the most basic and fundamental ways to make money in the currency markets. Unfortunately, investors now do not pay much attention to the trend. Do not let this common mistake influence you in your decision to invest in forex.

bh61
Mar 23 2017 at 07:35
posts 14
For someone who has decided to start commodity trading, all different terminology can be a bit overwhelming. There are many product terms that are adopted from other markets such as equity, leverage and stop losses, but there is a whole list of terms that apply to this particular market, so we decided to name and explain some of them to you.

Tiffany (TiffanyK)
Mar 26 2017 at 07:07
posts 427
Where can we find the terminology with the explanations? Thanks in advance!

Accept the loss as experience
Baldo (BaldoN)
Mar 29 2017 at 13:03
posts 522
Hello,
More or less, there are not too much difference between FX and Commodity trading. On Commodity trading some difference could be related with determine life of the markets (futures contracts) and some season influence over soft commodities (wheat, sugar etc.),
Ah and another point - bigger accounts are needed here :)

ema123
Apr 13 2017 at 06:53
posts 32
Commodity trading offers huge profit potential but for anyone willing to trade in commodities, I would recommend them to do complete homework as commodity market involves high leverage instruments thereby increased degree of risk. Other than the theoretical know how also focus on price analysis and news events.

AniLorak
Jan 22 2019 at 04:57
posts 920
ema123 posted:
Commodity trading offers huge profit potential but for anyone willing to trade in commodities, I would recommend them to do complete homework as commodity market involves high leverage instruments thereby increased degree of risk. Other than the theoretical know how also focus on price analysis and news events.


As I think, new traders should start their trading process through the major FX pairs than the exotics; after words the commodities.

Alcides666
Jan 24 2019 at 08:13
posts 10
Commodities are great for long term speculation but not so much for short term. The spreads are too high. I also find that technicals are less important on commodities. Fundamental analysis if more important.

AlexBainbridge
Jan 24 2019 at 08:40
posts 2
i certainly agree commodity trading needs time invested in understanding the markets, for example how AUD/NZD/USD forex markets can effect metals & how CAD,USD move with Oil. there can be trends in commodities looks at WTI or Brent down trend Oct-Dec 2018 as an example, what a great move lots of opportunities to stack trades on the way down.

GoldAbu
Jan 27 2019 at 08:00
posts 8
Commodites are better traded over the long term. The spreads are quite high so short term trading is not very easy. But there are good long term trends so trading long term can be very successfull (if you know what you are doing!!!)

AniLorak
Jan 27 2019 at 11:03
posts 920
GoldAbu posted:
Commodites are better traded over the long term. The spreads are quite high so short term trading is not very easy. But there are good long term trends so trading long term can be very successfull (if you know what you are doing!!!)


Yes; trading spread is not suitable for the short-term trading styles! But what about the volatility of commodities?

Imamul
May 16 2019 at 09:41
posts 650
Learning is the foremost ways to keep survive in this volatile trading place in a proper way. But sorry to say maximum traders who are particularly newcomers try to make money from here without learning. As a result they become loser when trading practically. It would be great if we choose the broker which always ensures best trading environment for learning this trading place by providing exclusive educational facilities.

zampa (zampa)
May 16 2019 at 13:42
posts 14
Commodites are better exchanged over the long haul. The spreads are very high so transient exchanging isn't simple. Be that as it may, there are great long haul inclines so exchanging long haul can be very successfull (in the event that you realize what you are doing!!!)

Alexsajed
May 23 2019 at 04:53
posts 32
To put it very simply, the factors to consider when choosing the best commodities to trade are market liquidity as well as fundamental trends.
...
Crude Mini: 950% in 3 years.
Precious Metals( Gold, Silver)
Base Metals( Copper, Aluminium, Zinc, etc)
Energy( Natural Gas, Crude Oil)

AniLorak
May 29 2019 at 13:43
posts 920
Alexsajed posted:
To put it very simply, the factors to consider when choosing the best commodities to trade are market liquidity as well as fundamental trends.
...
Crude Mini: 950% in 3 years.
Precious Metals( Gold, Silver)
Base Metals( Copper, Aluminium, Zinc, etc)
Energy( Natural Gas, Crude Oil)


Well; how do you handle the issue of high trading spread on commodities trading?

ElDoradoGold
May 30 2019 at 05:59
posts 8
With commodities it is all about the long term trend. Don't try to trade intra day just find the trend then wait for pull backs and enter in the direction of trend

AniLorak
Jun 01 2019 at 15:23
posts 920
ElDoradoGold posted:
With commodities it is all about the long term trend. Don't try to trade intra day just find the trend then wait for pull backs and enter in the direction of trend


Till now I can remember during the 2013-14 oil trading was much exciting; I know many traders made a huge amount of money!

AmDiab
Jun 02 2019 at 07:03
posts 718
ElDoradoGold posted:
With commodities it is all about the long term trend. Don't try to trade intra day just find the trend then wait for pull backs and enter in the direction of trend


It’s a good advice! I think, FX pairs are the best choice for intraday trading even for scalping because of high volume!

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