I am in the commodities market and came here to learn how to have more stable n firm trade in a shorter term so i have no fear of waking up into the "red sea" and here i see people in forex trying to enter commodities.
Have to say profits n losses come hand in hand. Nothing much can be learn except that the BIG trend is one sided. UP. Unless negative news happen. It will be up by the end of 3 month period. ALWAYS. News will be your important source of information. If u gonna trade less than a month. It can go anywhere, trading commodities in a day chart is comparable to trading eur/usd on a 15 minutes chart. Not too bad but not good enough for me. Prepare to go roller coaster of hundreds of pips just from "noises"
Additional info. I used to earn around 10,000-50,000 between 4-10 months in commodities with 500,000 capital. Now i earn 2,000-10,000 a month in eur/usd with 50,000..
I'm only trading CFD's at this stage as I don't have a big enough account to trade full size lots through a normal commodity broker. As a result I'm just using my forex broker to trade them.
As I understand it a standard Natural Gas contract needs a backing account of around $14m to trade a Turtle channel with 1% risk. Using a CFD through my forex broker I can trade the same system and risk for just over $10k.
With GFT, whom I use, most of the commodities CFDs still require about $10k in the account to trade long term with low risk, so not quite the $500 forex account, but not a multi-million traditional commodities account either. Different commodities obviously have differing account requirements for both the base contract and the CFD, with the CFD generally available in a smaller size, and (for things like Gold and Silver) sometimes available in multiple sizes.
Another advantage of CFDs is they are also offered in some things that are hard to trade in other ways - like stock market indexes.
I want to invest some money in commodity market. But it is risky market. Is anyone making money through commodity Market and Guide me how can i earn money in commodity market.
First of all, you need to know: Are you investing or are you trading?
Investing usually means getting into a market and holding it for a considerable period of time. More commonly known as the 'Buy and Hold' method. It usually applies to the Long side, that means you Buy into the market with the prospect of the market increasing in value.
Investing also involves very long term perspective of the market.
Trading usually involves getting in and out of the market in relatively short periods of time. It takes advantage of market price volatility for profit taking. Unlike investing where there is usually a preference to go Long (Buy), for trading, you can Buy or Sell depending on your analysis of the market.
Commodity markets can be rather volatile and prone to the price gapping phenomenon. Price gapping can cause a trader to lose more than he had intended so it is something worth taking note of. I will suggest new traders to avoid trading commodity markets if they are just starting out to trade.
Do note that the level of riskiness of a financial instrument is also heavily dependent on the trader. So yes commodity markets can be volatile but an experienced trader will manage the risk according by applying strict risk management for his trades.