1. Money

Paper Trading the Commodity Markets

By June 20, 2007

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Paper Trading is one of the most important educational tools you can use while you are learning how the futures markets work. Paper Trading is a process of simulating real trading without putting your money at risk. After doing research, if a would-be commodity trader wants to buy a particular futures contract he would write down the current price at which the trade would have been executed. The position is tracked until it is exited. This process should be carried out multiple times until a realistic comfort level is reached.

Paper Trading will help new commodity traders learn the basics of the commodity markets and test how well they are able make profits over a series of trades. Real money should not be traded until you can see consistent profits made in paper trading. There are several online sources that offer paper trading or you can just use a sheet of paper to track your trades. Remember to be realistic and honest when executing your paper trades or your education will be flawed.

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