T2W Trading Community

Commodities

Personally I have made a good amount of money from commodities, namely some small trades with high returns on gold. Very much like those which you initially viewed on www.insightsupport.com webpage. Commodities are not difficult to trade, providing you know which is which and that commodities are affected by world events be it war, weather or economic up/down turn. Let's look at what commodities are and how we can make good profit trading them.

Commodities were the first products to be traded on futures markets. Futures products first appeared in the 19th century as a means for businesses to buy or sell a large quantity of a particular mass product (wheat, sugar etc.) and fix the price now for delivery in the future - hence the name.

Why do this? Businesses, as we all know, run on their own internal revenue. The ability to lock in prices now for a future delivery of a product they use or sell can help them maintain and monitor production costs and also be able to quote steady prices to Mr & Mrs Joe Public. Trading in the futures market allows businesses to hedge against a sharp movement in the price of the commodity that they use or sell, a sharp movement that might otherwise cause an savage adverse to their cash flow.

It soon became apparent that a great deal of money could be made (and lost) by trading these contracts. While businesses usually use them to hedge their risk, the risk can be assumed by speculators in return for the chance of large reward if they (the speculators) are correct in their trade. The gearing involved can of course make or lose you a great deal of money. The risks with futures trading can be much higher than they would ever be when we trade sensibly in financial spread betting . However as far as the gearing and the profitability of the futures and that of financial spread betting there is little difference on that respect. Generally more capital is required to trade in futures and there are no such things as guaranteed stop losses either.

The key difference with actually trading 'real' commodity futures is that the contract you take out, if left to expire, would mean that you would be responsible for the purchase/sale of the product in question. Not great if you're trading, as the deposit on futures are a fraction of the real cost. Don't think anyone would like a tanker load of oil being delivered on his or her doorstep – that’s an awful lot of oil.

There has been a great deal of changes since those early days and that of the financial futures markets has overtaken commodity futures trading easily.

There still exists are great deal of opportunity for those wishing to trade in financial spread betting within the commodity markets. Commodities have a tendency to remain pretty static over time, then, just when you were getting bored at the whole static nature of them, they double almost over night.

There are more risks trading in commodities in financial spread betting . If you are not careful you can find that you are unable to close a losing trade and have to let it run. Why?

Most of the markets use a system of price limits that can lock someone into an open position, a situation which you must honour. The commodities that these vary on depend on whom you're trading with. Should you be concerned as to the possibility of being locked in, I would suggest that you trade only used a Controlled Risk Bet, otherwise known as a Guaranteed Stop Loss.
There are plenty of financial Spread Betting bookmakers who would be more than happy to help you with commodities and I have had little trouble trading them in the past.

Some financial bookmakers trade the London Metal Exchange. I would like to warn you of some bizarre things that makes the LME a strange beast and will save you a great deal of headache. Note: Only some use the LME as a strict guide, when you sign up with one of the financial bookmakers I outline later - please read their booklet they supply before trading. Don't worry however, I do point out which financial bookmaker is good for beginners, moving up to the more advanced trader.