Commodity trading strategies

By: inky On: 22.06.2017

ETX Capital offers a large range of commodities to trade on within the categories of metals, agriculture, livestock and energy.

Investors Cash In With Commodities Trading Strategy - WSJ

Here are some key points to consider before starting to trade commodities:. Different commodities often react in dissimilar ways and have diverse levels of liquidity and volatility. Before you start trading, it is best to research the commodities that would fit best with your trading approach. For example, high volatility means that a market has greater potential to see large shifts, and a trader should be extra diligent to manage the risk of these trades.

Traders should keep in mind, however, that there are different types stop losses and limits, not all of which are guaranteed.

Types of Commodity Trading Strategies

One key advantage of trading commodities is that at least some commodities are largely unaffected by the financial markets. This means that the rise or fall of stock markets has little impact on the value of, say, oats.

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Commodities also differ from stocks in the sense that there is no takeover risk, and have a weaker focus on any kind of quarterly reports. However, many factors do significantly affect the supply of commodities, for example, the weather, production strikes, crop and livestock diseases, major oil discoveries, energy prices and emerging technologies. The price movement of some commodities have the potential to shift the values of other related securities. For example, a fall in oil prices a bny mellon work from home scam in late resulted in the testing forex trading systems value of a number of energy sector stocks equities.

This is why traders often have a minimum of one commodity in their trading portfolio: This strategy can be particularly beneficial to those with trading experience who have learnt to identify patterns between different markets. Safe commodities are viewed to have a greater degree of stability than other securities.

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The leveraged trading products available on this website are not appropriate for everyone.

It is possible for losses to exceed your account balance. Do not trade with funds you cannot afford to lose and seek advice if you do not understand the risks. Leveraged trading is high risk. Your losses can exceed your deposits.