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Excitement of Commodity Trading Online

May 31, 2008
Commodity trading online has become an exciting and potentially very profitable business endeavor with real time commodity quotes and live charting services now offered by a large number of Internet enabled commodity futures brokers.

Internet technology has made the type of commodity trading services previously reserved for the deep pockets professional trader available to even small traders who have limited amounts of risk capital to trade. However, whenever you trade commodities the risk of sudden adverse price movements are still present, so even with great trading software, charts, and other facilities a trader should always protect his capital by using stop loss orders.

As always, great trading platforms or not commodities should only be traded with true risk capital. By that I mean funds that if lost would not impact your standard of living at all. No one likes to lose money but if you lose risk capital your life would go on without missing a beat. If you disregard this advice and risk your mortgage payment money you will almost certainly lose.

Commodity futures trading online makes the collection of commodity information, up to date prices, weather forecasts, USDA and CBOT reports, and commodity charts so much more convenience to access compared to old before the Internet trading days. This greater convenience does not mean that it is easy to become a successful commodity trader. Commodity trading requires skill sets and discipline that many people just don't have. There are few natural commodity traders in this world. Most people will have to work hard at developing the right skills and mental outlook.

A very helpful thing about online commodity trading is that most online commodity brokers offer demo trading accounts and will let you try out their trading platforms without risking real money. While trading a demo account is not the same as trading your own funds, the emotional factors are quite different, you can still get a good feel for what is required in order to be successful and find out if online commodity trading is for you.

There are many commodity contracts that you can trade. It is easy to at first become confused as each commodity futures contract is a bit different. In getting started it you should limit yourself to trading just one or two futures contracts.

There are futures contracts in the precious metals, like gold, silver, and platinum.

Then you have contracts in the base metals like copper, aluminum, nickel, zinc, and tin.

The "soft" commodities like sugar, cocoa, and coffee often trade in cycles that go from highs to lows every few years.

The grains have a lot of action these days and are subject to weather influences. Record prices were hit this year in corn, soybeans, rice, and wheat.

The big gun of them all would be crude oil and the entire energy complex including natural gas and heating oil. With crude oil such a vital commodity strong demand has pushed it into a tremendous bull market. Oil contracts are trading above $130 a barrel and new trading price records seem to be made every few days. There is plenty of excitement, profit potential, and risk in the energy complex. No one really knows how high this market can go.

Commodity trading online can be a fantastic business for the well informed trader who takes the time to develop the necessary skill sets to trade well consistency. Commodity trading is not for the lazy who rely on luck for trading profits. Chances are their money will not last long in the extremely competitive trading environment offered by the commodity markets.

If you have a strong interest in online commodity trading take the time to run a Google search for "commodity trading online". You will find a number of commodity resources. To find online brokers run a Google search for "online commodity brokers". You will find plenty of firms to research.

When researching online commodity brokers make sure that they are members of the NFA and are registered with the CFTC. By dealing only with firms who are NFA members and registered with the CFTC you will have at least some measure of protection as to how your trading funds are handled. You can be sure that your orders will be filled accurately according to your instructions.
About the Author
Learn down to earth lessons about Commodities Futures Trading written by experienced traders. These guys love to trade and to share their experiences with people who are looking for a trading advantge for Commodities Futures Trading
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