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http://profitabletradingtips.com/trading-investing/commodities-trading Commodities Trading As currencies fall in value commodities appear to rise. In fact, commodities such as gold, oil, and agriculture products simply retain their value in the face of inflation and currency devaluation. Those engaged in commodities trading know that fact. Traders engaged in commodities trading also know that supply and demand, the fundamentals, are basic to commodity prices. Those who wish to profit from commodities trading learn technical analysis. This is the analysis of past price movement with the purpose of predicting future price movement. One trades commodities in a futures market. Traders enter into contracts to buy or sell specified quantities of a given commodity on a specified future date. To profit from commodities trading one needs a firm grasp of the fundamentals that determine pricing and a clear sense of how the market reacts to changes in information. Commodity Futures Futures are standardized contracts between two parties to buy or sell a specific, standardized, amount of virtually anything. The price is agreed upon at the time of the contract and holds until the date of delivery. Most futures traders do not actually sell or buy commodities as they simply exit the contract by making the opposite trade prior to the delivery date. Although the price set in the futures contract for corn, beef, oil, gold, or other commodities is set the value of the contract varies and that is where the profit lies in commodities trading. In today’s world online commodities trading is common. Traders follow the news pertinent to the value of gold, cattle, or wheat. They follow pricing patterns in order to understand evolving market sentiment. Depending on the perceived changes in supply and demand the value of a commodity futures contract will rise or fall. In commodities trading one can buy or sell a contract for crude oil that is not deliverable for a decade but still make profits today. The trader simply seeks to enter and exit the trade at the most profitable times. Many traders use options in commodity trading. In doing so, they limit their risk and often leverage their investment capital. Futures Markets The following is a list of United States Futures exchanges: CBOE Futures Exchange (CFE) Chicago Mercantile Exchange (CME) Chicago Board of Trade (CBOT) Chicago Climate Exchange (CCE) ELX Futures (Electronic Liquidity Exchange) ICE Futures U.S. Kansas City Board of Trade (KCBT) Minneapolis Grain Exchange (MGEX) Nadex (formerly HedgeStreet) NASDAQ OMX Futures Exchange (NFX) New York Mercantile Exchange (NYMEX) and (COMEX) NYSE Liffe US OneChicago, LLC (Single-stock futures (SSF’s) and Futures on ETFs) The CME group owns CME, CBOT, NYMEX, and COMEX. Predicting the Future Will there be a drought in Eurasia, Brazil, or North America? These are the world bread baskets f
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As currencies fall in value commodities appear to
rise. www.ProfitableTradingTips.com
In fact, commodities such as gold, oil, and
agriculture products simply retain their value
in the face of inflation and currency devaluation. www.ProfitableTradingTips.com
Those engaged in commodities trading
know that fact. www.ProfitableTradingTips.com
Traders engaged in commodities trading also
know that supply and demand, the
fundamentals, are basic to commodity prices.www.ProfitableTradingTips.com
Those who wish to profit from commodities trading
learn technical analysis. www.ProfitableTradingTips.com
This is the analysis of past price movement with the purpose of predicting
future price movement. www.ProfitableTradingTips.com
One trades commodities in a futures market.
www.ProfitableTradingTips.com
Traders enter into contracts to buy or sell
specified quantities of a given commodity on a specified future date. www.ProfitableTradingTips.com
To profit from commodities trading one needs a firm grasp of the
fundamentals that determine pricing
www.ProfitableTradingTips.com
and a clear sense of how the market reacts to
changes in information.
www.ProfitableTradingTips.com
Futures are standardized contracts between two parties to buy or sell a specific, standardized,
amount of virtually anything.
www.ProfitableTradingTips.com
The price is agreed upon at the time of the contract and holds until the date of
delivery.www.ProfitableTradingTips.com
Most futures traders do not actually sell or buy
commodities as they simply exit the contract
www.ProfitableTradingTips.com
by making the opposite trade prior to the delivery
date.www.ProfitableTradingTips.com
Although the price set in the futures contract for corn, beef, oil, gold, or
other commodities is set www.ProfitableTradingTips.com
the value of the contract varies and that is where
the profit lies in commodities trading. www.ProfitableTradingTips.com
In today’s world online commodities trading
is common. www.ProfitableTradingTips.com
Traders follow the news pertinent to the value of
gold, cattle, or wheat. www.ProfitableTradingTips.com
They follow pricing patterns in order to
understand evolving market sentiment.
www.ProfitableTradingTips.com
Depending on the perceived changes in
supply and demand the value of a commodity
futures contract will rise or fall.
www.ProfitableTradingTips.com
In commodities trading one can buy or sell a
contract for crude oil that is not deliverable for a decade but still make
profits today. www.ProfitableTradingTips.com
The trader simply seeks to enter and exit the trade
at the most profitable times.
www.ProfitableTradingTips.com
Many traders use options in commodity trading.
www.ProfitableTradingTips.com
In doing so, they limit their risk and often
leverage their investment capital.
www.ProfitableTradingTips.com
The following is a list of United States Futures
exchanges:
www.ProfitableTradingTips.com
CBOE Futures Exchange (CFE)Chicago Mercantile Exchange (CME)
Chicago Board of Trade (CBOT)Chicago Climate Exchange (CCE)
ELX Futures (Electronic Liquidity Exchange)ICE Futures U.S.
Kansas City Board of Trade (KCBT)Minneapolis Grain Exchange (MGEX)
Nadex (formerly HedgeStreet)NASDAQ OMX Futures Exchange (NFX)
New York Mercantile Exchange (NYMEX) and (COMEX)NYSE Liffe US
OneChicago, LLC (Single-stock futures (SSF's) and Futures on ETFs)
www.ProfitableTradingTips.com
The CME group owns CME, CBOT, NYMEX, and
COMEX.
www.ProfitableTradingTips.com
Will there be a drought in Eurasia, Brazil, or North
America? www.ProfitableTradingTips.com
These are the world bread baskets for wheat, corn,
and soybeans. www.ProfitableTradingTips.com
Will overly strong monsoon rains or a
persistent drought affect the rice harvests in
Southern Asia? www.ProfitableTradingTips.com
Commodities trading in these foodstuffs requires a clear sense of what will
affect supply and demand.
www.ProfitableTradingTips.com
Gold goes up when currencies falter or war
threatenswww.ProfitableTradingTips.com
and oil goes up when there is unrest in the
Middle East or a hurricane approaching
the Gulf of Mexico. www.ProfitableTradingTips.com
In commodities trading, traders keep an eye on the facts and the other
eye on how the market is reacting.
www.ProfitableTradingTips.com
Timing the market as a day trader in commodities trading is also important, especially
important news breaks.www.ProfitableTradingTips.com
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