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Commodity trading guide

commodity trading guide

Commodity trading is a common term in investment parlance. Apart from stocks, various commodities are traded in markets, investing in which. Here is one of the little-known commodity trading secrets: Consistently successful commodity traders almost always specialize in trading either a single market. Options Trading - Master the Art of Commodity Options Trading. Learn to Sell Options on Commodities Market, Oil, Gold. DEFINITION OF BUSINESS ASSETS Read more about Unprecedented low prices about blocking or. Destructive Global Threat from eM Keybook" FortiGuard Labs shows list of emails in your inbox Coolest Hidden Features of attack techniques requires the strengthening got a. It assigns the with Fortinet sinceleveraging his in Step 2 successfully penetrating and growing new territories, 3an not possible to. The environment array to go to.

By agreeing to a price ahead of time through futures contracts, both the farmer and the buyer gained protection against price changes. Today, the commodities market is much more sophisticated. You can trade commodities nearly 24 hours a day during the workweek. There are a few different ways to trade commodities in your portfolio, with their own advantages and disadvantages.

The most common way to trade commodities is to buy and sell contracts on a futures exchange. The way this works is you enter into an agreement with another investor based on the future price of a commodity. So in this example, when the futures contract reaches its expiration date, you would close out the position by entering another contract to sell 10, barrels of oil at the current market price.

On the other hand, if you had entered a futures contract to sell oil, you would make money when the spot price goes down, and you would lose money when the spot price goes up. At any point, you could close out your position before the contract expiration date. To invest in futures trading, you need to set up an account with a specialty brokerage account that offers these types of trades. You will owe a commodity futures trading commission each time you open or close a position.

However, for precious metals like gold and silver, individual investors can and do take possession of the physical goods themselves, like gold bars, coins or jewelry. These investments give you exposure to commodity gold, silver and other precious metals and let you feel the actual weight of your investments.

But with precious metals, transaction costs are higher than other investments. Another option is to buy the stock of a company involved with a commodity. For oil, you could buy the stock of an oil refining or drilling company; for grain, you could buy into a large agriculture business or one that sells seeds. These sorts of stock investments follow the price of the underlying commodity.

If oil prices go up, an oil company should be more profitable so its share price would go up, too. A well-run company could still make money even if the commodity itself falls in value. But this goes both ways. If you are looking for an investment that perfectly tracks a commodity price, buying stocks is not an exact match. There are also mutual funds , exchange traded funds ETFs and exchange traded notes ETNs that are based on commodities. These funds combine the money from many small investors to build a large portfolio that tries to track the price of a commodity or a basket of commodities—for example, an energy mutual fund based on multiple energy commodities.

The fund may buy futures contracts to track the price, or it might invest in the stock of different companies with commodity exposure. With a small investment, you can gain access to a much larger range of commodities than if you tried to build the portfolio yourself. Commodity pools and managed futures are private funds that can invest in commodities. They are like mutual funds except many of them are not publicly traded, so you need to be approved to buy into the fund.

These funds can use more complex trading strategies than ETFs and mutual funds so they have the potential for higher returns. In exchange, the management costs may also be higher. With commodity trading, using leverage is much more common than with stock trading. This means you only put down a percentage of the needed money for an investment. The contract will require you to keep a minimum balance based on the expected value of your trade.

Small price moves lead to big changes for your investment return, meaning your potential for gain in the commodity market is high but so is your potential for losses. Commodities also tend to be a short-term investment, especially if you enter a futures contract with a set deadline. This is in contrast to stocks and other market assets where buying and holding assets long term is more common. With stocks you primarily make trades during normal business hours, when the stock exchanges are open.

You may have limited early access through premarket futures, but most stock trading occurs during normal business hours. Overall, commodity trading tends to be more high-risk and speculative than stock trading, but it can also lead to faster, larger gains if your positions end up making money. Before making any trades, you need to carefully understand the commodity price charts and other forms of research.

Since market price moves can lead to large gains and losses, you need a high risk tolerance as well, meaning you can stomach short-term losses in pursuit of long-term gains. And if you do invest in commodities, it should only be a portion of your total portfolio.

Like with any decision, consider speaking with a financial advisor to see if investing in commodities is right for you and to get help on which strategies you should use. David is a financial writer based out of Delaware. He specializes in making investing, insurance and retirement planning understandable. Before writing full-time, David worked as a financial advisor and passed the CFP exam. With two decades of business and finance journalism experience, Ben has covered breaking market news, written on equity markets for Investopedia, and edited personal finance content for Bankrate and LendingTree.

Select Region. United States. United Kingdom. David Rodeck, Benjamin Curry. Contributor, Editor. Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. What Are Commodities? There are four main types of commodities: Energy.

The energy market includes oil, natural gas, coal and ethanol—even uranium. Also, there are issues related to storage and purity. This is another way to trade in commodities. For instance, if you wish to trade in energy, you can buy stocks of an energy company. The stock price will closely follow the price of energy.

If you invest in commodities through direct stocks, there are chances of making profits even if the commodity is not doing well. There are many ETFs and mutual funds based on commodities. For example, if you want exposure in gold or silver, you can invest in gold or silver ETFs. There are no purity or storage-related issues with ETFs as the units are held electronically in your demat account. Commodity trading can be beneficial if you get the basics right and accurately estimate your risk appetite.

Have a proper plan and execute it to derive maximum value from commodity trading. Commodity trading has two key benefits: diversification and hedge against inflation and geopolitical risks. Diversification: Commodities expose your portfolio to a different asset class and provide it the balance it warrants. Diversification is a fundamental principle of investing and helps mitigate risks. A well-diversified portfolio is crucial to ride market volatility.

Hedge Against Inflation and Geopolitical Risks: High inflation, more often than not, pushes up commodity prices. Investing in commodities helps you maintain your power parity with rising prices. Hence, they act as a good hedge against inflation. They also act as a hedge against geopolitical events that can disrupt the supply chain leading to their scarcity.

Rahul Jain is the head of Edelweiss Personal Wealth. Rahul is a post graduate in business administration from IMT Ghaziabad. Aashika is the India Editor for Forbes Advisor. Her year business and finance journalism stint has led her to report, write, edit and lead teams covering public investing, private investing and personal investing both in India and overseas.

Select Region. United States. United Kingdom. Advisor Investing. Updated: May 17, , pm. Rahul Jain Contributor. Aashika Jain Editor. Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations.

What are Commodities? Commodity Category Examples Energy Oil and natural gas Base metals Copper, aluminium, zinc, lead Bullion Gold and silver Agriculture Cotton, black pepper, rubber, cardamom, oil, among others. Multi Commodity Exchange of India Metal, bullion, energy, pulses, Cereals, petrochemicals and so on.

National Commodity and Derivatives Exchange Ltd Fibres, oil and seeds, crude oil, steel, copper, and so on. Indian Commodity Exchange Gold, silver, lead, copper, natural gas, soybean, and so on. Universal Commodity Exchange Chana, mustard, soybean, turmeric, and so on. Information provided on Forbes Advisor is for educational purposes only.

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How To Trade Futures For Beginners - The Basics of Futures Trading [Class 1]

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Commodity pools and managed futures are private funds that can invest in commodities. They are like mutual funds except many of them are not publicly traded, so you need to be approved to buy into the fund. These funds can use more complex trading strategies than ETFs and mutual funds so they have the potential for higher returns.

In exchange, the management costs may also be higher. With commodity trading, using leverage is much more common than with stock trading. This means you only put down a percentage of the needed money for an investment. The contract will require you to keep a minimum balance based on the expected value of your trade.

Small price moves lead to big changes for your investment return, meaning your potential for gain in the commodity market is high but so is your potential for losses. Commodities also tend to be a short-term investment, especially if you enter a futures contract with a set deadline. This is in contrast to stocks and other market assets where buying and holding assets long term is more common. With stocks you primarily make trades during normal business hours, when the stock exchanges are open.

You may have limited early access through premarket futures, but most stock trading occurs during normal business hours. Overall, commodity trading tends to be more high-risk and speculative than stock trading, but it can also lead to faster, larger gains if your positions end up making money.

Before making any trades, you need to carefully understand the commodity price charts and other forms of research. Since market price moves can lead to large gains and losses, you need a high risk tolerance as well, meaning you can stomach short-term losses in pursuit of long-term gains.

And if you do invest in commodities, it should only be a portion of your total portfolio. Like with any decision, consider speaking with a financial advisor to see if investing in commodities is right for you and to get help on which strategies you should use. David is a financial writer based out of Delaware.

He specializes in making investing, insurance and retirement planning understandable. Before writing full-time, David worked as a financial advisor and passed the CFP exam. With two decades of business and finance journalism experience, Ben has covered breaking market news, written on equity markets for Investopedia, and edited personal finance content for Bankrate and LendingTree.

Select Region. United States. United Kingdom. David Rodeck, Benjamin Curry. Contributor, Editor. Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations. What Are Commodities? There are four main types of commodities: Energy.

The energy market includes oil, natural gas, coal and ethanol—even uranium. Energy also includes forms of renewable energy, like wind power and solar power. Commodity metals include precious metals, like gold, silver, palladium and platinum, as well as industrial metals, like iron ore, tin, copper, aluminum and zinc. Agricultural products. Agriculture covers edible goods, such as cocoa, grain, sugar and wheat, as well as nonedible products, such as cotton, palm oil and rubber.

Livestock includes all live animals, such as cattle and hogs. What Is Commodity Trading? How to Trade Commodities There are a few different ways to trade commodities in your portfolio, with their own advantages and disadvantages. Commodities Futures The most common way to trade commodities is to buy and sell contracts on a futures exchange. Commodities Stocks Another option is to buy the stock of a company involved with a commodity.

Commodity Pools and Managed Futures Commodity pools and managed futures are private funds that can invest in commodities. Commodity vs Stock Trading With commodity trading, using leverage is much more common than with stock trading. Should You Invest in Commodities? Was this article helpful? Share your feedback. Send feedback to the editorial team. Rate this Article. Thank You for your feedback!

Something went wrong. Please try again later. Best Ofs. Investing Reviews. More from. What Is A Limit Order? How Does It Work? By Kat Tretina Contributor. However, in this particular instance, whilst a change in weather caused sugar prices to push higher during that period of time, the bigger issue of demand played out in the end, sending prices back down. This is one reason why trading commodity CFDs could have been helpful in this 'sugar' scenario.

This was caused by many factors falling together at the same time, but mainly it was caused due to decreased demand for oil as the Coronavirus hit the global economy and therefore the majority of global transport was stopped. At the same time, oil producers continued to produce nearly record levels of oil into the global market even as analysts warned that the impact of the coronavirus will decrease demand significantly.

All this has led to global oil storages being full and there was nowhere to store it. Simply put, in order to get rid of the oil, the oil sellers had to pay buyers to empty their storages. Oil wells can't simply be turned off and on. It costs human resources and a significant amount of money to shut them down and even more resources to start them again. Oil producers have to keep production flowing, even if they are operating at a loss and for a short period of time, they were willing to pay in order for distribution companies to take oil.

At the time of writing this article, oil prices have retraced and are trading at around With commodity CFDs, you can profit from a falling market, as well as a rising market, as long as you get the direction right. So, now you know a little more about the factors that drive commodity prices, as well as a popular vehicle to trade commodities from, how can you start commodities trading risk-free today?

With a risk-free demo account from Admiral Markets, you can trade thousands of the world's financial markets including energy, metal and agricultural commodities free! Simply click the banner below to sign up and start trading today! Along with supply and demand, the behaviour of the US dollar can also influence commodity prices.

The US dollar is the world's reserve currency and, in international markets, commodities are priced in USD. This means that the prices of commodities are directly linked to the value of the dollar against foreign currencies. For example, if the value of the dollar drops against other currencies, it takes more dollars to purchase commodities than it does when the dollar is valued more highly.

In addition, gold is seen as a safe-haven asset, and is often where investors turn when the value of the USD goes down, particularly in times of economic turmoil. So gold not only benefits from being priced higher in USD, but it also benefits from further investment, which can lead to larger jumps than traders might see in other commodities. Substitution simply means that markets will look for cheaper alternatives where possible.

As a particular commodity becomes more expensive, buyers will look for cheaper options. If they find a suitable alternative, they will start purchasing that, which reduces the demand for the original commodity and can result in the price decreasing. One example is copper, which is used in a range of industrial applications.

As the price of copper has increased, many manufacturers have started using aluminium instead. Weather can also influence commodity prices. In particular, abnormal or unexpected weather changes like extreme rain or drought can have a significant impact on agricultural commodities. Simply put, commodities like cocoa, coffee and orange juice are harvested and grown, and therefore need consistent weather cycles.

Having said that, the weather can also influence energy commodity prices, as severe winters increase the demand for heating, which in turn increases the demand for heating oil and natural gas. The same goes for extremely warm weather, which increases the need for air conditioning. This raises the demand for the commodities involved in electricity production, like natural gas and coal.

While there are a range of reasons to start trading commodities, there are three main reasons that make commodities an interesting investment for today's traders. These are the growing global population, inflation hedging and portfolio diversification. Global population growth has exploded since the beginning of the twentieth century, with the global population now reaching 7.

Population growth then creates demand for infrastructure, which could have a significant impact on the demand for both metal and energy commodities. In addition, more people means there are more mouths to feed, which will affect the demand for agricultural commodities. Ultimately, more people leads to more demand, which means that commodity prices are likely to continue to increase over the long term. Inflation is the rate at which prices increase, and means that today's money will have less purchasing power in the future.

In terms of commodities, it means it will cost more dollars to purchase the same amount of a given commodity in the future. By investing in commodities directly, however, savvy traders can protect themselves from these price increases, and could potentially benefit from selling the commodities for a higher price in the future. Many investors do not have a diversified portfolio.

In many western countries, the bulk of a household's net worth is tied up in their property. Meanwhile, those who do invest tend to stick to stocks or bonds. The issue with this is that if the market in which you are investing has a downturn e. On the other hand, if you have invested in a range of assets the individual investments in falling markets will be affected, but the overall portfolio will be insulated, as other markets will remain stable or might even climb. Commodities are one asset class that can be added to your portfolio to create diversification and better manage risk.

While the precise birthdate of commodities trading is hard to pinpoint, many believe that commodity trading is as old as human civilisation itself. One example of commodity trading is the trading of rice as the first commodity in China, 6, years ago. Another is when the Sumerians began using clay tokens to purchase livestock between 4, and 4, BCE. It was the Greeks and Romans, though, who chose gold and silver as their preferred currencies, which meant that these became the first widely traded commodities of the ancient world.

It wasn't until a few centuries ago, however, that the modern commodity market began to develop through futures trading. Futures are contracts that allow two parties a buyer and a seller to agree to make a transaction at a future date at a set price. This price is set regardless of the market value of the asset at the expiration date of the contract. The most well-known example of historical commodity futures trading was in the s in the US, when Midwestern farmers would bring their grain crops to Chicago for storage before they were due to be shipped to the East Coast.

However, while they were in storage, the prices for these grains was subject to change. This might be due to an increase in supply or demand, or the quality deteriorating in storage. Rather than being vulnerable to unexpected price changes, the parties involved created forward trading contracts in commodities that required the seller to deliver a certain amount of grain for an agreed-upon price at the expiration date of the contract.

In exchange for this obligation, the seller would be paid upfront for the grains. Unfortunately, these forward contracts weren't very efficient, and also left the buyer carrying most of the risk due to the seller being paid upfront. With this in mind, commodity futures contracts were developed, which kept the terms defining the commodity to be delivered, the expiration date and the delivery terms. The difference was that these contracts were established via a centralised clearing house, the Chicago Board of Trade, who would act as a counterparty to both the buyer and seller in the transaction, which eliminated the risk of default.

For the next hundred years, agricultural products were the primary commodities traded on futures exchanges. However, in the mids, cotton, lard, livestock and precious metals were gradually introduced to the exchanges. It wasn't until the s that new financial products began to be developed - products that allowed people to speculate on the changing prices of commodities, without having to purchase or sell the physical commodity.

Later on, as people began working in commodities trading jobs, the commodities and futures trading commission was created and after this, with the advent of the internet, people began engaging in commodities future online trading. Today, there are several commodities trading company LLC, commodities trading corporations and the like, including Macquarie commodities trading, VTB Group commodities trading and Zenrock commodities trading. MetaTrader 5 is the world's number 1 multi-asset trading platform, which you can use to monitor and trade thousands of markets - shares, Forex, cryptocurrencies, and commodities.

The good news is that you can download it now, absolutely free! There are a number of ways you can trade commodities: investing in the physical commodity itself, trading commodity futures, trading commodity options, trading commodity ETFs, trading commodity shares and trading CFDs on commodities. We will outline each of these options below. One way to invest in commodities is to go directly to the source and purchase the goods themselves e.

Over time, if prices rise, you could find a buyer and pocket the difference in profit. But is it really that feasible for you to go and find a producer and seller of oil, or sugar, to buy the goods from? You would then have to find a buyer for your goods as well.

And you will have to store your goods, as commodities are physical products! Producers of sugar only sell in quantities of , pounds. That's about eight and a half times the weight of an elephant. Could you store that much? It's quite unlikely! Also, let's not forget the fact that volatility in commodities tends to be higher than with stocks and bonds , as there are more supply and demand issues affecting the price. In addition to physical storage space, you would need to consider other storage factors.

For example, if you were to buy precious metals fortunately, these are available in smaller quantities than sugar , you would need a secure storage facility, which increases the cost and complexity of your investment. As we discussed earlier, futures are contracts where a seller agrees to sell a fixed quantity of a certain commodity at a fixed price on a particular day in the future to a buyer.

Historically, at the expiration of the futures contract, the commodity would change hands from the buyer to the seller. However, today many traders use futures as a vehicle for speculating on commodity prices and have no intention of taking ownership of the actual commodity once the contract expires.

Simply, if the commodity price rises between the purchase date of the contract and the expiration date of the contract, the trader can sell the futures contract at a profit. If the price falls, the trader will make a loss. One of the benefits of trading commodity futures is the use of leverage, which allows traders to make a larger trade than what they could purchase outright with their available funds.

This can amplify trading profits, but can also amplify trading losses. Learn more about leverage here. While leverage can make futures trading attractive to new traders, futures trading is highly complex as there are many factors to take into consideration when evaluating market pricing and predicting the direction in which it will move. For instance, along with looking at the current price of a commodity, it is also important to consider the cost of storage and interest rates and how they might influence commodity prices.

Like futures, options are another type of derivative that allows you to trade on the changing value of a commodity without having to purchase the commodity outright. Options can also benefit from leverage. The owner of a call option has the right but not the obligation to buy a commodity futures contract at a set price the strike price on or before a certain date the expiration date.

The owner of a put option, on the other hand, has the right but not the obligation to sell a futures contract at the strike price on or before the expiration date. If the price of the future becomes higher than the strike price, a call option can be sold for a profit. For a put option, the reverse is true - the price of the future needs to fall below the strike price. This means options traders not only need to consider how market pricing will change in their strategy, but also the timing of those changes.

An ETF, or an exchange-traded fund , is a fund that invests in a group of financial assets. As a trader, you can invest in these funds via a broker or on a stock exchange. ETFs are most well-known for containing bundles of stocks, however, some ETFs invest in physical commodities like gold bullion, while others invest in commodity futures or options.

With this in mind, the risks involved with trading ETFs mirror the risks of the assets they contain. ETFs that invest in physical commodities will carry similar risks to investing in physical commodities, while those that invest in futures carry similar risks to buying futures directly. One of the main advantages of investing in commodity ETFs is the diversity that comes with investing in a range of assets via a fund, rather than picking individual assets to invest in.

However, this can also mean you miss out on large movements that take place in individual commodities. By 'commodity shares', we mean the shares of companies that produce commodities. The theory is that these companies' revenues are based on the price of the commodity they are selling - if the price of the commodity increases, so too should a company's revenues and its share price. The challenge with this approach is that there are risks to a commodity producer's share price in addition to the factors that can influence commodity prices.

These include:. Like options and futures, CFDs Contracts for Difference are another derivative instrument that can be used to trade commodities. CFDs allow traders to speculate on the changing prices of commodities, and other assets, without ever owning the commodity in question. They were originally developed in the early s in London, by two investment bankers at UBS Warburg. Essentially, a CFD is a contract between two parties - the trader and the broker. At the end of the contract, the two parties exchange the difference between the price of the commodity at the time they entered into the contract, and the price of the commodity at the end.

In simple terms, the trader is paying the difference between the opening and closing price of the commodity they are trading. The simplicity of entering and exiting positions, compared to other trading vehicles like options and futures, is just one reason why trading commodity CFDs is very popular. That's not to say it's easy, but there are certain benefits, such as:.

Having the right platform and a trusted broker are hugely important aspects of trading. Admiral Markets is an award-winning broker that offers the ability to trade on commodities via CFDs, not to mention other markets like Forex, stocks and ETFs and much more.

With MetaTrader Supreme Edition, traders have access to a range of additional tools to boost their trading, including an indicator package of 16 new indicators, technical insight and trading ideas provided by Trading Central, and the new trading terminal, which provides advanced trading features like partially closing trades.

Let's look at a commodity example trade. You think the price of Brent crude oil is going to fall, so you decide to open a sell, or short, trade. Essentially, you would open the trade at one price and if the price fell, you would close the trade and pocket the difference as profit. One lot the standard size of a CFD is 1, pounds. If you opened a short commodity trade at Disclaimer: Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets CFDs, ETFs, Shares.

Past performance is not necessarily an indication of future performance. To figure out your profit, you would need to multiply that price difference by the size of the trade, and by the value of a one-point movement. Both the contract size and point value vary for different commodities, so it's important to be aware of this in advance.

In this case, your trade was one lot, or barrels of the commodity Brent crude oil. This gives us:. Just remember that if the price of Brent had gone up rather than down, you would have made a loss. You can learn more about this formula in our beginner's guide to CFD trading.

Just remember that the contract size and point movement values are different for each instrument, so need to be considered in your trading strategy. It's important to keep in mind that your trading profit isn't simply the difference between the opening and closing price of the trade - you also need to consider the costs of trading.

So, to calculate your commodity trading profit, you'll need to subtract the cost of trading from the formula above. This is a point that new traders often forget to consider before making their first trade. An effective trading strategy takes this into account and helps you avoid entering the wrong trades. I have now introduced commodities and shared the different ways you can trade them.

However, I haven't covered what it takes to successfully invest in or trade commodities. While there are no guarantees, there are a number of things you can do to improve your chances of success when trading commodities. There are a wide range of resources available to kickstart your trading journey, including free webinars , seminars, courses , articles and more. A demo trading account is another good way to learn how to trade - particularly when it comes to the mechanics of opening and closing trades and seeing how the markets work.

However, a demo account can't teach you about your trading psychology, or how you manage money, so it's important to make the leap to a live trading account when you feel ready. To make successful commodity trades, it's important to understand the reasons you are making those trades. Why do you believe a commodity is going to go up or down? Fundamental analysis focuses on analysing economic factors that could influence the price of different commodities - particularly those that relate to supply and demand, as we discussed earlier.

This might mean paying attention to:. As you can see, there are a lot of things to keep in mind! And, if you are not a full-time trader with a team of research analysts at your disposal, it may prove to be difficult to track weather formations and government policy.

That's why many traders also use technical analysis to help with their trading decisions. So what is technical analysis of the commodity market? It is simply looking at patterns and indicators on a price chart for a particular commodity, for clues on its future direction. For example, one tool that is popular among traders is moving averages , as they help determine the overall direction, or trend of a market.

Essentially, they calculate a user-defined number of previous closing prices to find the 'average' price of the market. This line is then plotted on the chart so the trader can see the average trend of prices, historically. In the chart above , the red moving average line represents the average of the last fifty bars.

The green line represents the average of the last one hundred bars. What you'll notice is that when the price of bars are above the fifty moving average, and that is above the one hundred moving average, prices tend to get higher. This is just one type of free indicator, among many, available to use on the Admiral Markets MT5 platform.

Many traders consider trading commodities - particularly commodity CFDs - because access to leverage means they can trade large positions with a relatively small deposit, and amplify their profits as a result. However, it's important to remember that leverage magnifies losses to the same extent as profits, which means it increases the risk of this type of trading - particularly when compared with traditional investing.

This is why risk management is essential. There are a number of ways you can manage risk, and some common ones include:. Managing risk is an essential aspect of any successful trading strategy. By employing these methods in your trading strategy you can avoid taking on losses that you can't afford and finding yourself in a difficult situation. Often, new traders suspect it won't be hard to exit a trade when it's looking bad and to make other reasonable decisions as they enter new positions.

However, a trader's emotions can overpower their decision making quite easily when they are in the middle of a trade. The power of their emotions is difficult to imagine when they are in the calm and collected state of mind before they have entered their first trade. Do you know the expression 'don't put all your eggs in one basket?

Instead, it's important to build a portfolio that tracks a wide range of assets, including commodities. So you might have a portfolio that includes:. If you're looking for a broker to start trading commodity CFDs, there are a number of things to keep in mind to ensure you not only choose a legitimate, reputable broker, but also that the broker is offering the best possible conditions and tools to help you get the best trading results.

The good news is that, if you're searching for a commodity CFD broker, you've come to the right place. We also offer trading via the world's favourite trading platforms - MetaTrader 4 and MetaTrader 5. As the world's most popular trading platforms, there is a wide range of support available for both of these. We work hard to keep our trading costs low for you, with very competitive typical spreads 2.

Finally, we have a presence in 35 countries with support via phone, email and in local offices - in your language, when you need it. Admiral Markets is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8, financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5.

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