Commodity Futures
Trading requires Discipline, Research, Fundamental and Technical Analysis and
choosing a good
Commodity Broker, regardless of whether you require a Full-Service or Discount Futures Broker.
Commodities-Futures.net attempts to address these challenges that most Futures Traders face.
Trading Futures and Options is not an easy proposition. It has the lure of getting rich quickly,
however, most Investors who attempt to trade futures end up losing their money. Some will continue
to trade and always end with a losing account. It is the small percentage of Commodity Traders who learn
that trading is an education process and an exercise in control and patience. Once they can control their emotions
while trading commodities and implement trading techniques and discipline, then they may be able to join the
ranks of the small percentage of those trading futures who are successful.
STAGE 1 OF THE UNSUCCESSFUL COMMODITY TRADER
The aspiring commodity trader has probably read somewhere and heard from somebody
how quickly you can make money trading commodities. This person will normally open
an account with a commodity broker and trade the "Hot" market. This could be grains during
the summer or maybe heating oil in the winter. These market can have dramatic runs and make
people alot of money. The problem here is the commodity broker will normally recommend buying
out of the money options or possibly doing some type of option spread. And worse of all, the trader will
most likely use all his equity trading this one market. He/she has then turned this into a gamble.
LESSON #1: Don't bet it all on one trade!
How do you become Successful at Commodity Futures Trading?
If you want to be a consistently profitable Commodity Trader, you need to put alot of work into it.
You should read every book, periodical and every article on commodity trading you can get your hands on.
Keep updated with the markets regularly and begin to paper-trade. Be realistic with fill prices, stops, slippage
and write all your trades down as if you are actually placing an order with a broker. There are some excellent
electronic market trading simulators out there today. Many commodity brokers offer some type of service like this
to clients and prospective clients.
Next, you have to develop a trading plan. Yes, you need a WRITTEN Trading Plan. If you are going to
focus on Technical Analysis for trading, it may be helpful to backtest your trading strategy. Tradestation and
MetaStock are two well-know systems. A few key points to any commodity trading plan is address the markets you will
trade, entry and exit strategies, amount you are willing to risk per trade (money management), whether you are a short-term or long-term trader,
and rememeber discipline is extremely important.
We focus our trading information into 5 different catategories:
Feel feel to browse the site under any category you are interested in. We regularly update our information and lessons on Trading Commodities Futures.
- Commodity Brokers - Here we focus on how to find a good Commodities Broker who has experience, understands the markets
will help you learn about trading and someone who understands you goals in trading commodities.
- Commodity Trading Advisors (CTAs) - CTA's generally managed larger dollar accounts for trading future,
commodities and options. Commodity Trading Advisors usually keep a track record of their profits and losses. We will discuss whether
this is the type of trader or account you are looking for.
- Online Commodity Trading - Should you trade commodities online or use a broker? Many experienced
traders prefer the quickness, ease of use and of course lower commissions. This may be a dangerous road for the newbie.
- Futures Trading - Here we focus on general aspects of Futures Trading, from Futures Trading Systems
to Fundamental Analysis to Technical Analysis and general Futures and Commodities Trading.
- Futures Options - Many Traders like to use Futures Options to lower their risk exposure
on trades. Options have many advantages if you know how to use them properly.
Disclaimer: TRADING IN COMMODITY FUTURES OR OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
