Help in Making Money by Profitable Trading The Commodities Futures Markets
Welcome to Commodity Trading Advisor Organization who is on a mission educating traders to achieve "success" and profitable trading combined with "considerably less" trading losses, which is a formula for success.
A Good Commodity Trading Advisor Helps Traders Trade the Markets Successfully
There are ways to trade commodities futures markets successfully with an overall reduced risk of trading losses.
A Commodity Trading Adviser (aka CTA) is a financial markets term with a definition being a person who directly or indirectly advises investors about buying or selling commodity futures and/or commodities options. Non-direct advising includes providing information via financial websites, the media or by written communications, including online commodity futures trading advice.
For more commodity futures markets trader info please pay a visit to Commodity Trade System or go-to Commodity Futures Trading the traders and day trading website for successful long-term trading or day-trading the commodities markets. A CommodityTradingAdvisor can help futures traders trade the commodities markets with less risk (at least comparatively speaking), with no direct trading assistance). More traders knowledge and trader information is located at Commodity Trading Advisors...
Commodity Futures Trading Tips for Successful Trading
Commodity futures trading refers to trading of futures contracts. These contracts or agreements are made to trade the commodities market at fixed future prices. The prices are based on the existing or prevailing price quotes. Similar to stock market trading, commodity futures are traded in particular centralized trading markets or exchanges like Globex and S&P.
There has been a large increase in the number of commodity traders trading futures contracts due to many reasons. Among the reasons include the following:
- simplicity of trading that enables anyone to do trading online or virtually
- the present of high liquidity in the market due to huge trade volumes made daily
- the stability of the market
- easiness to own an underlying commodity wherein one can buy a high-priced product at a lower price during the time of agreement
- low rates of commission in comparison to trading underlying futures stocks
- the ability to do trading at home with decreased in working capital
- lower initial investment required
- the availability of small futures that have narrow spreads and less account minimums
- the presence of various underlying products in the market
Any person can be successful in gaining trader profits through commodity futures trading. At the futures markets, the speculators and the hedgers meet to predict whether the price of a commodity will rise or fall in the future based on a particular market or currency index. Just like any market, commodity futures trading can be risky, however the potential to see both long and short term gains can be considerable.
There are different futures markets as well as strategies a trader can use to get profits from commodity futures trading. Primarily, a commodity refers to the physical product whose value is decided by the forces of supply and demand. These markets include precious metals, energy, grains and much more. The commodities are traded in commodity exchanges at a predetermined price and time. Prices rise or fall. In trading commodities, it would be strategic to use straddles. A straddle is created holding the same number of puts and calls with the same expiration date and strike price. The “calls” is where the trader expects that the price will rise while the “puts” is where the trader speculates that the prices will fall.
Another commonly used strategy in gaining traders profits from commodity futures trading is scalping. Just like commodities, the prices of trade currencies in scalping are speculated to rise or fall. In the value of currency, the scalpers try to take short-term profits off the incremental modifications. As this is done repetitively, the profits will continue to grow in time resulting to significant total profits as all small profits are combined. In able to continue gaining trader profits, one must require strict discipline in order to continue making short-term and small profits while preventing large losses.
In the commodity futures markets, there are two main types of futures trading contracts. The first type is called as commodity futures and requires physical delivery. The futures in this type include agricultural commodities. The second type is called as financial futures, which often require cash settlement. This type involves mutual funds, bonds, treasury notes, and the like.
Tips on How To Trade Commodity OptionsTrade commodity options are highly profitable. It can be more wonderful and great than stocks options because it brings risk management to an entirely new level and gives plenty of flexibility as well. Compared to index or stock options, strategies for trade commodity options can be exchanged with lesser margin. These options can also be used for both speculative and income purposes. Moreover, the margin rules of SPAN allow usage of less capital for trade commodity options. Nowadays, the commodity option trading are made substantial for complicated options strategies with the help of brokers who use deep discount commissions, online trading platforms, electronic trading platforms, and electronic mini contracts.
Commodity options are just like with stock options when it comes to trading transactions. The only difference between these two is multiples of option premiums that each represents. Apparently, there are different advantages gained from commodity options that include low margins & high yields, lower commissions, low slippage, better hedging, no additional margin trades, call credit spread, and additional trades.
Most commodity options trading involves the SPAN margin rules wherein the calculation is centered on all aspects. This can be advantageous to the trader. For instance, a trade that uses collar strategy will have lower margin compared to the same trade that uses indices or stocks directly. Lower margins will result to better utilization of capital as well as with higher profits. It is so pleasant to work with experts.
With trade commodity options, the slippage per deal per trade is huge. However, in most cases, a trade option that involves the same currency size will result to low slippage. The slippage is even lesser with commodity options that are electronically traded like e-mini contracts and gold options. Most of the strategies with trade commodity options need some few adjustments or hedging during the span of a trade. The general rule for hedging or adjustment is going short or long of the principal to watch over if the principal is not in favor of the trade. E-mini contracts and futures provide the best method to hedge or adjust with low capital requirement.
Trade commodity options do not have extra margin trades. With careful assessment of the current trades, possible extra trade opportunities may arise. These additional opportunities can decrease the overall margin that the trade requires.
Apart from the above-mentioned advantages of trade commodity options, the trader must be aware that trading options as well as futures involve considerable risks of loss or gain that maybe or not suitable for all traders. Here is a useful list of tips that one can use for profitable options trades:
- Follow trends in the commodity market as well as your natural instincts. As soon as you've chosen your trading system, stick to it.
- Do not overtrade and apply techniques of money management on your trading.
- Secure a position in the market wherein your profit goal exists.
- Avoid trading markets that has low capital and with volatile contracts.
- Establish trading plans prior to market opening. The plans must include objectives, exit points, and entry points.
- Maintain discipline by using technical signals such as charts. This will eliminate impulse trading.
- Cut losses short so profits can run.
- Do not overstay on a good market because there is a tendency to overstay on bad markets as well.
- Learn to trade from the short side as much as the long side and learn patience!
- It is best if the broker and trader have good rapport.
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