Churning is most commonly understood as excessive trading by someone who has control over another's account for the main purpose of generating commissions.
Churning happens most often by brokers who have discretion over a client's commodity trading account. When you open an account you have the option to allow a broker to place trades on your behalf without getting your prior appoval on each trade. In allowing a broker or commodity trading advisor to have discretion over your account, you need to be able to recognize if your account is being churned.
Excessive commissions are the first thing you want to watch for. Excessive commissions means the broker is placing trades for the main purpose of generating commissions and he or she is not looking out for your best interest. In trading commidities, your best interest should refer to a balance of making you money and controlling your risk.
