Question posed by RoastGoose: FX trading vs Commodity trading vs Equity trading?
i’ve somehow met a lot of people that trade forex. I trade the other 2 relatively well.
I’ve never traded forex before, but after looking at the charts for a few currency pairs, 2 observations:
1. There were many bear traps and other kinds of manipulations, almost as if some large fund / bank was triggering buy signals only to sell out.
2. It looked like there were many algorithms going off.
3. Common indicators didn’t really show much efficacy.
It could just be the particular pairs I was looking at during that point in time, but my impression was that it is a lot easier to make money from commodities, which has much more meaningful trends.
So why do people trade forex?
Do people actually find meaningful patterns to trade off of regularly?
It seems much more difficult.
Question by Sean: Is auto insurance a commodity on the free market or does it work similarly to health insurance.?
I may be completely off base here I have no Idea how either of the two work as far as the free market as far as their coverage I think I have some idea.
I live in Colorado.
The best answer:
Answer by mbrcatz Depends on what state you are in.
Whether you agree or disagree, why not leave your own thoughts below.
A question asked by Joey W: thinking about investing in crude oil, anyone know much about investing in this commodity?
Seems like the perfect commodity to invest in from an economic standpoint, limited resources/ huge demand…what are the drawbacks?
Chosen answer:
Answer by Adam L Commodities (such as oil) are highly volatile, and generally risky investments. If you are absolutely convinced that oil is going to go up and are willing to risk your shirt, go buy oil futures. This is the option/right to buy oil at a certain date at a certain price, usually close to today’s price. If, on that date, oil is worth more, you simply buy for today’s low price and sell for the high price.
However, you can lose everything this way. Price is lower on that date, and you have to buy the oil at the higher price, and sell low. You could lose a LOT of money.
A more risk averse method would be to invest in commodity base d Exchange Traded Funds, such as DBC or GSG, which invest heavily in energy/oil futures, but hedge their bets with T-bills so they aren’t as risky. They are about as risky as stocks – you can’t lose more than you put in, and are unlikely to lose all or nearly all of your investment. But, then again, you won’t quadruple your money in a week either.
Question by William M: Do you think that commodity options trading could create a billionaire in his/her early to mid 20s?
I want to know your views and opinions here as to wether you think that commodity options trading could create a billionaire in his/her early to mid 20s?
Also, I heard that a certain Richard Dennis traded commodity options, and in 10 years he turned his $ 400 into $ 200 million. Think if you started with $ 2k, in theory you could have started at my age (18) with $ 2k and ended up with $ 1 billion at 28, right?
What do you think?
Top answer:
Answer by matthewspeed If you KNEW what was going to happen there is no limit to the amount that could be made. A person could easily realize a return of 100% daily on each round trip options contract (one buy, one sell) if they could correctly pick the direction a stock with large option volume was going to move. The problem is being right 100% of the time.
Whether you agree or disagree, why not leave your own thoughts below.
A question from Nelly O: what are the significant variables of a normal commodity market?
Chosen answer:
Answer by SPQR unless there is an industry issue with regards to supply (think oil), demand drives prices over the long term. in the short term, prices are determined by supply considerations (think coffee, oranges, etc.).
How about adding your own answer to the comments below!