Commission Rates for Online Commodity Trading
Commission Rates have dropped dramtically in the last 10 years due to Online Commodity Trading. Other
terms for online trading are Electronic Trading and even Discount Trading. A typical commission rate was once around
$100. Today that figure is much less. An ordinary trader can easy get rates around $10 for Online Commodity Trading.
A great source for a comparison or Online Brokers Commission Rates is
DeepDiscountFutures.com.
The electronic contracts or "mini" contracts have dramatically increased in popularity. Commission Rates are even
lower for these marker. The e-mini S&P contract is among a favorite of futures daytraders. The quickness of fills,
ease of order entry and execution are dificult to beat. You can literally be trade a contract in a few seconds with
confirm and all! It sure beats the old days of calling a broker, asking for a quote, deciding if the price is where
you want to trade, then the commodity broker has to call down to the trading desk and normally has to wait for a call back on the execution.
The Pitfalls of Online Commodity Trading
The most obvious problem with Online Commodity Trading is OVERTRADING. Commissions are so cheap and
you can move in and out so quickly, it is a tough temptation to fight when trading futures. This is where
Discipline in your Trading Plan and leaving emotions out of Trading Futures is so important.
Take advantage
of Online Commodity trading don't let it take advantage of you.
Many Futures Traders are prone to staring at every tick on the screen all day. This can cause mental
fatigue and tends to impair rational trading decisions. Sometimes watching every tick makes you impatient
and you don't wait for the proper Entry or Exit Points when Trading Futures. Also, many Futures Traders
end up turning themselves into DayTraders when in reality they should be Long-Term Traders.
Advantages of Online Commodity Trading
The Advantage are tremendous with the advent of Online Commodity Trading. Futures Trading has become
a much more level playing field, especially for the DayTraders or Short-Term Commodity Traders. The Traders in the
Futures Pits once were the only traders able to get in and out of the markets quickly and efficiently. Now, electronic
traders have instant quotes, instant charts, real time news and buy and sell signals pop-up from their
pre-programmed software. I believe Online Trading is a very good thing for the Commodities Markets. The
only drawback is the education of why the markets move. Traders today are looking at a screen all day, which
may cause them to lose sight of how the markets really work.
More in-depth articles to follow. Check back regularly.
Disclaimer: TRADING IN COMMODITY FUTURES OR OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.