Successful Commodities TradingEven the beginner can engage in successful commodities trading. Traders can make money in successful commodities trading by choosing commodities that they have an interest in and knowledge of. Commodities traders can use technical analysis tools such as Candlestick chart analysis to track and predict price changes in a given commodity. Successful commodities trading comes down to combining technical analysis with fundamental analysis. A good place to gain a firm knowledge of the fundamentals of commodities trading is with Commodity and Futures Training. Once traders have learned the fundamentals of trading commodities they will choose a commodity to trade such as oil futures or gold futures. Those with an agricultural background or interest may consider live cattle commodity trading or corn futures. Discipline, a trading strategy, and attention to detail will convert knowledge and commodity price patterns into profits for the hard working trader.
The list of commodities to trade is long. Corn, mini-corn, corn swaps, corn calendar spread options, distiller’s dried grain futures, wheat, mini-wheat, wheat swaps, wheat calendar spread, soybean, min—soybean, soybean swaps and so forth is how the Nymex list of commodities products starts. Metals traded include industrial metals such as copper futures and precious metals with some industrial use such as gold and platinum. Energy products include crude oil futures as well as natural gas futures, coal futures, and energy credits. For successful commodities trading it is important to have a strong working knowledge of ones own traded commodities. It is always important to remember that the biggest traders in the commodities markets include the producers, processors, and commercial and industrial buyers of commodities. These companies are hedging their investment risk in buying and selling commodities. Having only a passing knowledge of a commodity that you are trading puts you at a distinct disadvantage compared to someone with a background in the industry in question and decades of trading experience.
Despite the fact that traders are working in markets where the biggest players are experts it is absolutely possible to be successful in commodities trading. Part of why traders are successful is that they learn each commodity that they trade very well. They learn the Candlestick pattern formations in current trading and in the past. They follow the appropriate information sources to stay current on fundamentals. And, they get to choose which commodities to trade. A wheat trader working for a multinational grain company may work to hedge his company’s investment risk in grains but will likely not be trading gold futures, silver futures, platinum, or palladium. The wise trade will be knowledge across several commodities and will be able to trade where the action is or avoid markets that are so volatile as to be dangerous. Successful commodities trading can often come from trading the right commodities at the right time as much as from technical skill.Anyone successful in commodities trading is always a student of the art of trading and a student of the commodities that he or she trades. A successful trader maintains a keen interest in just how a successful trade came about and how an unsuccessful trade happened. Experience leads to success and failure. Reviewing Candlestick chart formations, becoming a student of Commodity market history, and always working to improve a commodity trading system by review of produces results. Learning from experience leads to successful commodities trading.
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