If there is so much positive to the subject, why is there still scope for the ‘but’ factor?? The ‘however’ component can be understood by scrutinizing the other side of commodity trading; the face which relates with risk. Commodity trading has happened since ages, when none even imagined that the simple exchange system they are following, would transform to a sophisticated trading format in commodities and derivatives. The transformation however did happened and for good. From a sustenance exchange deal, commodity trading today is an important earning tool with commodity trading software programs assisting through the deal. But the change didn’t just happened on the procedures; it also inculcated the undesired risk element.
Commodity trading is a function of risk. Done in form of futures, the trading depends largely upon expectations, predictions and thus the uncertain calculations. Moreover, the available information is not controlled, as it is in other comparable schemas. Thus while commodity trading has positive news for many, there are ifs and buts associated with the framework, which again are equally robust.
The scenario is such that the loss, like profit, could be voluminous. Not only the calculated margins, but the existent account balances could be eroded in the deal. Future traders, thus ought to be well aware of the possible risks and risk aversion strategies. A number of steps can be taken in this direction, but the domain is huge and thus there are no guarantees that the steps will finally be effective; unless, there is an answer as comprehensive as the question itself.
Risk management by way of commodity trading software, fabricated on the likes of Hyper Rig risk administration strategy is the answer.
By: Hyper Rig
About the Author:
Hyper Rig is a global provider of trading risk management software, and data management software technologies. We enable you to create solutions that set a new standard for reliability, speed, flexibility, and scalability across your enterprise.
Internet technology has made the type of commodity trading services previously reserved for the deep pockets professional trader available to even small traders who have limited amounts of risk capital to trade. However, whenever you trade commodities the risk of sudden adverse price movements are still present, so even with great trading software, charts, and other facilities a trader should always protect his capital by using stop loss orders.
As always, great trading platforms or not commodities should only be traded with true risk capital. By that I mean funds that if lost would not impact your standard of living at all. No one likes to lose money but if you lose risk capital your life would go on without missing a beat. If you disregard this advice and risk your mortgage payment money you will almost certainly lose.
Commodity trading online makes the collection of commodity information, up to date prices, weather forecasts, USDA and CBOT reports, and commodity charts so much more convenience to access compared to old before the Internet trading days. However, greater convenience doesn’t mean that it is easy to become a successful commodity trader. Commodity trading requires skill sets and discipline that some people just don’t have.
One good thing about online commodity trading is that most online commodity brokers offer demo trading accounts that will let you try out their trading platforms without risking real money. While trading a demo account is not the same as trading your own funds, believe me, the emotional factors are different, you can still get a good feel for what is required in order to be successful and if online commodity trading is for you.
There are so many commodities that you can trade it is easy to at first become confused as each commodity futures contract is a bit different. In getting started it is best to limit yourself to just one or two futures contracts.
There are contracts in the precious metals, like gold, silver, and platinum.
Then you have contracts in the base metals like copper, aluminum, nickel, zinc, and tin.
Don’t forget the “soft” commodities like sugar, cocoa, and coffee.
The grains have a lot of action these days and are subject to weather influences. Record prices were hit this year in corn, soybeans, rice, and wheat.
Then the big daddy of them all would be crude oil and the entire energy complex including natural gas and heating oil. With crude oil in a tremendous bull market and trading above $130 a barrel new trading price records seem to be made every few days. There is plenty of excitement, profit potential, and risk in the energy complex.
Commodity trading online can be a fantastic business for the well informed trader who takes the time to develop the necessary skill sets to trade well consistency. Commodity trading is not for the lazy who rely on luck for trading profits. Chances are their money will not last long in the extremely competitive trading environment offered by the commodity markets.
If you have an interest in online commodity trading you can run a Google search for “commodity trading online” and find a number of commodity resources. To find online brokers run a Google search for “online commodity brokers” and you will find plenty of firms to research.
In researching online commodity brokers make sure that they are members of the NFA and are registered with the CFTC. By dealing with firms who are NFA members and registered with the CFTC you will have some measure of protection as to how your funds are handled and as to the accuracy and fulfillment of your orders.
With most online commodity trading brokerage firms just a few mouse clicks will provide you with a world of useful information that will assist you in making better trading decisions.
By: Gerald Greene
About the Author:
Gerald “Taipan” Greene is a retired forex trader and portfolio manager who worked in Asia for over 20 years. The nickname was acquired in Hong Kong and is now used for a number of financial, political, and Internet business related blogs. One of them is at Commodity Trading Online
I have been searching the net to find out this info. I am new to commodities & futures. What is the future price for the November 08 NYMEX Crude Oil contract? I can get all details of the contract from NYMEX website, except the futures price, i.e. the pre-set price at which the delivery will take place on delivery date. Please do not confuse with settlement price, that’s the price at which crude oil will actually trade on the delivery date.
Does anyone know?
The second in a multi-part series on commodity trading. Modern commodity exchanges and futures are detailed. For more information, be sure to check out www
How long this story can be sustained? How will this correct itself? Commodities are going up in values mainly because of 2 things, the lack of investment in them because they were too cheap earlier to justify the investment and secondly, the demand was not as high as it is now that China as more and more money from its trade surplus. Oil demand is increasing, partly from developing country like China who are increasing their demand.
Where is this all heading?
Will the US dollar keep falling down?
I’m not interested in buying mutual funds, futures, commodities. Buying “gold” does not seem to be a very practical suggestion to me. Any other ideas?
Can you believe this ?
They keep bringing up legislation that BC signed that MOST of them benefited from themselves.
To all those who point a finger at Bill Clinton…
Under Clinton, these banks wouldn’t have been ALLOWED to sell these predatory loans to people who couldn’t afford them !
SURE he signed legislation that made it easier for alot of people to borrow money for homes..(which many of you occupy today with interest rates which were set in the 90’s !)…… BUT…he didn’t deregulate the Commodities Futures trading which drove the price of gasoline to 4 dollars per gallon over the course of the following 8 years either !…He didn’t DEREGULATE THE BANKS……
When Clinton was in office… people COULD afford their loans….but NOT NOW !
You’ people are referencing a time when a gallon of milk was $2.20 !
When a typical electric bill was around 70 bucks !
When home owners insurance rates were REGULATED
When energy was REGULATED
When Wall Street was REGULATED
nice try though…
I know Bill Clinton is always your “goto” man for blame…but it’s not going to work this time.
What Bill Clinton did was allow average people to afford average homes…..
What GOP did was allow banks to charge average people above average INTEREST RATES, on average homes. The GOP allowed futures traders to fix the price of energy.
see the difference ?
How can anyone blame Clinton for this is beyond all logic and reasoning…
When Clinton left office….gasoline was about $1.50/gal.
GOOGLE: ENRON LOOPHOLE
Republicans want us to “blame everyone”….when SPECIFIC PEOPLE ARE TO BLAME !
CONS: “let’s not point fingers”>…BS !
I’m pointing my finger squarely at who is at fault … >>>>>>>> GOP + BUSH !
Flip Ant: you are a joke….you probably live in a home that was puchased under that ACT !
But the difference is…. those loans were affordable and the banks were REGULATED…Wall Street was REGULATED….. Energy was cheap, food was cheap, jobs were plentiful !
Implementation: Students will work in groups of 2 or 3 and research a commodity that is traded in the futures market. Each group will be given $100,000 per week to invest. The group must track the price of the futures contract(s) on a daily basis. The group will be responsible to research the suppoly and demand forces that are driving the price of the futures contract. A summary report will explain what you learned during this project.
Summar:
-Take an opening position (i decided to go short–which means sell– and my commodity is sugar)
-close your position (whatttt?! idk how…)
Summary explainning:
Why you opened your position? (idk…..)
What actually happened to your futures contract?
[discuss the supply and demand forces] (again… what?)
How right or wrong you were?
[figure and discuss your profit or loss here]
What you would do different the next time?
[reflect and discuss what you would do if you could start again.
Complete an article review on your futures contract. (huh?)
HELP SOMEONE PLEASE!!! I CAN’T FAIL THISS!!!!
Gold, cash, stocks, agriculture and commodities? Where would you put 100k tomorrow?
just wondering, I looked around on the internet and strangely enough, I didn’t find what I was looking for
ten points–thanks!
