The Easiest Way to Learn Commodity Trading

We’ll teach you to start commodity trading today…

The commodities market is one of the foundations of the global trade system. For the serious trader, a knowledge in how to trade commodities is vital: great profits can be made if a trader has an in depth expertise in the issues driving commodity prices, and understands the mechanics of how to trade on it.

The advent of online commodity trading means that access to global markets is now available to private traders with a modest amount of capital thanks to accessible online brokers.

What are Commodities?

Commodities are primary resources that can be traded in set amounts and with agreed quality standards.

These basic parameters mean that commodities can be traded in large volumes in commodity exchanges, with traders being certain that the product they buy – whether it’s gold, oil or anything else – are as expected. In practice, this means fungible, of an agreed quality and in an agreed volume.

Commodities may be divided into several primary classifications:

  1. Energy (eg, oil & gas)
  2. Precious metals & industrial metals (eg, gold & silver)
  3. So-called new Commodities (eg, Bitcoin)
  4. Agricultural commodities (eg, coffee, cocoa, pork bellies)

Commodity Markets

Commodities are traded on the commodity markets. This is comprised of a number of international commodity exchanges, such as:-

  • Chicago Mercantile Exchange
  • New York Mercantile Exchange
  • London Metal Exchange

Officials of each exchange act to regulate transactions. Among their responsibilities is the duty to ensure that the commodities traded meet minimum quality and quantity standards. The exchanges themselves are regulated by national regulatory bodies.

Traditional Brokers & “Floor Brokers”

Commodity trading has been traditionally carried out by either floor traders that trade on their own behalf on the trading floor of commodity exchanges, or by firms of commodity brokers that carry out trades on behalf of others.

These firms often maintain a large staff of brokers and are able to carry out trading on most if not all of the world’s major multi commodity exchanges. The advantage of trading via a commodity brokerage is that such firms often offer advice and a vast range of information as part of their service: for an trader starting to learn how to trade commodities this support could be very important.

However, the costs of trading via traditional brokers are often high, and can be too high for some private traders. This has led to the rise of alternatives.

Online Commodity Trading With CFDs

Many discount commodity brokers operate online: online commodity trading has become a growth area in recent years, with many commodity brokers competing to offer the best deal to new traders.

They include regulated CFD brokers like:-

Important: Your capital is at risk. CFD trading is not suitable for everyone.

Start Trading Today