Commodity Trading Under the Guidance of a Broker

Commodity Trading Under the Guidance of a Broker
By [http://ezinearticles.com/?expert=David_Rivera]David Rivera

Day traders especially those who are still new can benefit from the guidance of commodities brokers. Experts may be able to help starters in making their plans based on the goals that they would like to achieve. It is necessary that new traders work on attainable objectives when dealing with commodity futures. They also have to determine the extent of their knowledge about the way the market behaves. Commodities brokers can help as many of them specialize in precious metals, foreign currencies, treasury bonds, agricultural products, energy sources, stock indices and also futures options.
Brokers are able to guide their traders in creating strategies that are suitable to the type of market that they have selected. As traders are able to implement sound plans and effective methods, they are able to decrease the risk that they are taking. Beginners may benefit from the extensive knowledge and expertise of their brokers. New traders are able to learn from them how to correlate their available investment capital with their desired financial goals over a period of time while being aware of the volatility of the market trends. Seasoned brokers may recommend the best trading style such as Swing Trading or Trend Trading to their traders in order for them to achieve their desired goals.
Those who are relatively new to the trading business will need to find a good broker who will guide them in making the right choices or decisions at the right time. A reliable broker for instance is one who is registered and works under regulation of the trading commission. The trading platform that the broker is offering should be easy to use and understand. The best brokers usually allow their new traders to get hands-on trading experiences without them investing real money. The demo account will give people the chance to gain some experiences in trading without actually losing real money in the process.

It is also important that beginners are able to get the best customer service and also the support from their broker. Their queries should be entertained as soon as possible in order for them to benefit from their investments. Although most brokers provide facilities for funding and withdrawing, new traders have to select one that will provide them with utmost ease and convenience. People with smaller capital to work with may check the required initial deposit for them to start trading. Those who would like to have more advantage may also check the leverage options that are offered by their brokers.
Choosing the right broker and the right trading platform is important especially for those who would like to engage in profitable trading activities.

Commodity option trading involves buying and selling futures option contracts. You do not have to just trade one   futures options contract. You can combine different options and trade them together in what is called spread trading. Spread trading is a way to limit your risk because when you lose in one contract, you profit in another. Learn at http://www.deltaneutraltrading.com/optin/ezines.html
Article Source: [http://EzineArticles.com/?Commodity-Trading-Under-the-Guidance-of-a-Broker&id=7557200] Commodity Trading Under the Guidance of a Broker

Basic Principles Applied in Commodity Trading

Basic Principles Applied in Commodity Trading
By [http://ezinearticles.com/?expert=David_Rivera]David Rivera

There are some fundamental principles that individuals need to know and to understand if they would like to enter the commodities market. Some of the concepts may actually be applied in other markets as well. Physical goods like metals, grain and food than can be exchanged are considered as commodities. Practically almost all of the everyday things that people make use of or consume come from commodities such as gasoline, natural gas, cocoa, sugar, coffee and many more. These raw materials or products may range from soft commodities to energy sources and to abstract commodities as well.

Some traders transact in a spot market where exchanges are immediate. A trader who represents a large company for example may purchase large volume of gold or oil on the spot. Regular people who make small purchases of the things that they need are actually involved in spot trading.
There are also traders who trade in the futures market. The buyer and the seller would agree on the terms of their transaction that will be carried out at a future date. They will also have to agree on the price of the commodity being transacted. However, it is important to understand that the parties do not actually engage in the exchange of the physical product right away but they are dealing with a contract.

This form of trading protects the parties from possible fluctuations of the price in the future. One of them will gain while the other losses in case the price would increase or decrease. Farmers for example may protect their gains by ensuring that their harvest will be bought at a specified price in the future.

However, trading in futures may pose lots of risks to traders. Some of them would limit the danger of losing much by trading options as well. Traders only risk the premium that they have paid including the commissions and other fees. They are only given the right to buy or to sell and they can exercise their option if they decide to unlike futures contracts where the seller will have to deliver the actual volume and quality of goods that have been agreed upon.

Although traders have the advantage of using leverage when trading futures contract, they have to learn how to use it wisely. Commodities trading can also be very risky and some traders may lose all if they are not careful. The leverage that is at the disposal of traders is the main reason that makes the futures contract more volatile rather than the value of the underlying asset or security.
When [http://www.futuresoptionspapertrading.com]commodity trading, look for ways on how you can minimize your risk. You can practice commodity futures trading by paper trading using spreads. This means buying one option and selling another option at the same time. This can also be done using straight futures contracts by buying one futures and selling another. Learn at [http://www.futuresoptionspapertrading.com]http://www.futuresoptionspapertrading.com.
Article Source: [http://EzineArticles.com/?Basic-Principles-Applied-in-Commodity-Trading&id=7643777] Basic Principles Applied in Commodity Trading