Long-term success in futures trading usually doesn’t begin overnight. You need to develop a proven trading technique that – more often as not – works. For new traders, Forbes magazine is a solid source for financial information. In one article, it flatly states, “You would be better off just giving your money to experienced traders . . . it would save on your emotional wear and tear.”
First Things First: Research
The only thing more expensive than education is ignorance.
Time is on your side. As a beginner in futures trading, it’s important to research risks and leverage. You will learn the ins and outs of this exciting marketplace when you work with a trustworthy, experienced online futures trading broker.
Part of your research into futures trading is to choose your online futures trading brokerage. The type of guidance you need will change as you learn more about the futures commodities trading market. Hopefully, your brokerage company will mentor your futures trading evolution; as a beginner, you may need a full-service broker. Later, you may opt for lower commissions and fees as you become more knowledgeable and adopt a do-it-yourself approach to online trading. Your considerations include:
Brokerage’s reputation for customer service
Commission rates you can afford
Margin requirements that you can handle
Software that is user-friendly and meets your requirements
“If you buy at the right time, you can make a mountain of money in commodities,” says financial magazine Forbes. ( and here at Cannon we would also like to remind you of the same possible large risk when you buy or sell at the wrong time….) Commodities don’t usually move at the same pace as the stock market, continues Forbes, so they can diversify your investment portfolio and lower the risk factor.
You need a commodity futures & options broker to facilitate your commodities trading. Commodities brokers buy or sell commodity contracts for a commission, and commission rates are usually paid per contract. A completed buy-and-sell transaction in the commodities market is called a round-turn.
Commodities futures brokers’ clients can be hedgers (people who use derivatives contracts to manage risk) or speculators (those who take a risk in hopes of greater profit). If you handle your own account, you are known as a self directed trader.Read the rest of this entry »
In July 2017, Forbes1 predicted an “explosion” of activity in commodities trading, and that prediction may have been right on the money; a bullish U.S. commodities market recently danced from summer to fall. As of September 5 2017, energy and non-energy commodities saw a respectable gain, but metals, minerals, and precious metals jumped as high as 8.2 percent. All that glitters is not gold; maybe it’s iridium! And maybe it’s time you learned about commodities trading as an investment strategy.
What are Commodities and Commodities Trading?
In the U.S., futures and option markets are regulated by the Commodity Futures Trading Commission. A commodity is a product that can vary in quality or grade. However, a futures contract of a commodity product is standardized, regardless who is the producer/seller. In addition to energy (oil and fuel, gasoline and natural gas), other commodities trading items include:
Soft – These products are grown and harvested rather than mined (Cocoa, Coffee, Fruit, Soybeans, Sugar, etc.)
The commodities market is driven by supply and demand. You can try to predict, based on previous years, what this year’s cotton crop will yield. But if disease damages much of U.S. cotton crops, supply is lowered and demand prices rise. Read the rest of this entry »