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About Commodity Trading
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Commodity trading is fast becoming the weapon of choice for a growing number of people who want to earn big money from their investments. This is because commodities represent an ever-expanding list of products that may be traded, from metals and petroleum, to agricultural goods, to consumer products and even to certain financial instruments and currencies.
When compared with other trading avenues, commodity trading presents infinite options, which a first-time trader might find valuable and easy to understand.
Small traders initially trade on commodities like grains, meats and certain metals because they are have lower margins compared to the other products.
Experts say that first-timers should begin with a combination of around six to eight commodities during their initial attempts to ensure proper monitoring and to be on the safe side, as well. Commodity trading is usually tracked on a daily basis, so it's best that there are only a handful of eggs in your basket at the onset to get a feel of how the market works.
In fact, even the most expert traders opt to have just around 8 markets under their wing, because tracking too many markets that are moving at the same time eventually becomes a tedious task.
Traders are advised to avoid large range commodities because the risk of losing is greater with these products.
You may want to start with corn market, because its highs and lows are often predictable and you don't have to worry too much about high margins. Wheat is also a good first choice because it moves much in the same way as corn. In the meat market, cattle is a workable jump-off point, though some experts urge against it because it often leads to a pretty wide range.
Products will large ranges include soybeans, cotton and sugar. In the past, sugar was considered a low-margin good because you don't really risk much when you get into it. However, current conditions in the market are not so favorable toward sugar and sugar-related goods anymore that it's best not to gamble too much into it.
The best way to invest in commodities is to trade futures. What you do is open an individual account, which can be access indirectly via a broker or directly through a futures commission merchant.
You can also engage in commodity trading via an account that is held by your chosen executor, by way of a written power of attorney. If you choose to take this path, you have to make sure this person is somebody you can trust because he will be making major financial decisions for you. If individual movement is not your type, you can share the load by joining commodity-related mutual funds and commodity pools, like limited partnerships.
Perhaps the best thing about learning to trade commodities is the fact that these low-margin markets, when combined with investments in the likes of stocks or bonds, are able to offset risks in your overall portfolio. This is not to say, however, that commodities do not come with major risks. Get the right information and trade wisely.
Trading Specific links
Trading News
Oil below $97 as traders eye Greek debt talks - The Associated Press
 PanARMENIAN.Net | Oil below $97 as traders eye Greek debt talks The Associated Press By early afternoon in Europe, benchmark crude for March delivery was down $1.03 to $96.81 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.48 to settle at $97.84 on Friday. In London, Brent crude was down 68 ... Oil near $97 as traders eye Greek debt talks |
How Traders Boost Forex Trading Vocabulary with Vantage FX UK - MarketWatch (press release)
How Traders Boost Forex Trading Vocabulary with Vantage FX UK MarketWatch (press release) LONDON, February 6, 2012 /PRNewswire via COMTEX/ -- Vantage FX UK is helping traders to tell their adjustable pegs from their leading indicators with a comprehensive Forex trading glossary hosted on its website, http://www.vantagefx.co.uk/ . |
The Week Ahead: Insider-trading bill hits House floor - The Hill
 Washington Times | The Week Ahead: Insider-trading bill hits House floor The Hill The Stop Trading on Congressional Knowledge (STOCK) Act, which forbids insider trading by members of Congress, will hit the House floor sometime this week. The Senate passed it on Thursday. The lower chamber is expected to amend the legislation and ... Editorial: Insider trading ban calculated Insider-trading bill is a solid investment in accountability Partisans quibble over right stocks bill |
AUD/USD: Trading The Reserve Bank Of Australia Interest Rate Decision - TheStreet.com
 BusinessDay.com.au | AUD/USD: Trading The Reserve Bank Of Australia Interest Rate Decision TheStreet.com As the region continues to benefit from global trade, the RBA may see scope to keep the benchmark interest rate at 4.25%, and the central bank may adopt a neutral policy stance for the first-half of the year following the slew of rate cuts in 2011. Forex News – Australian dollar off 6-month highs ahead of RBA |
China Shares End Flat; Analysts See Narrow Trade In Near Term - Wall Street Journal
China Shares End Flat; Analysts See Narrow Trade In Near Term Wall Street Journal SHANGHAI (Dow Jones)--China's shares ended flat Monday on wobbly trading as momentum eased after recent strong gains. The benchmark Shanghai Composite Index, which tracks both A and B shares, moved in and out of negative territory throughout the day, ... China Stock Market May Continue Win Streak China Stocks: Changchun Gas, China Vanke, Cosco Shipping Property Stocks Decline on Real Estate Outlook: Beijing Mover |