Commodities: Most Popular Articles
Wheat crops are planted and harvested at different times around the world. Included are the growing seasons for wheat in the United States and China.
Corn crops are planted and harvested at different times around the world. Included are the growing seasons for corn in the United States, Brazil, China, Argentina and Europe.
Learn the process of what you need to do to become a licensed commodity broker. Areas covered include passing the series 3 test, choosing a brokerage firm and what the job involves.
Trading commodities online is a fairly simple process to get started, but it is not something that should be entered into lightly. The traditional method of calling your commodity broker to place orders and waiting for a callback to give you a filled order price is quickly coming to an end. Therefore, if you want to trade commodities online, we will cover the process of how to start.
Futures Margin has many different meanings in futures trading and includes initial margin, maintenance levels, margin call and why margin changes.
Soybean crops are planted and harvested at different times around the world. Included are the growing seasons for soybeans in the United States, Brazil, China and Argentina.
A penny is currently worth more than one cent because of the meltdown value of copper. The value could go even higher in the future if the price of copper continues to rise. This article offers some insight and tips on how to profit from saving and collecting pennies and nickels.
How to calculate and file taxes on Commodities Trading using IRS Form 6781 – Gains and Losses From Section 1256 Contracts and Straddles.
The ticker symbols for futures contracts are used to identify and retrieve quotes, charts and market data for each commodity or futures contract. Page 3.
Learn the basics of futures options including calls, puts, premium and strike price.
Commodity brokers are usually paid on a commission basis, which means they get paid a percentage of the commissions from the trades their clients place. Since some commodity brokers are very good and many brokers fail in the first six months, it is very difficult to give an accurate estimate of what a typical commodity broker gets paid.
Commodities typically follow and inverse relationship with the value of the dollar. When the dollar strengthens against other major currencies, the prices of commodities typically drop. When the value of the dollar weakens against other major currencies, the prices of commodities generally move higher.
A derivative is a financial instrument or security that is based on the price of another asset, which is called the underlying asset. Derivatives are often highly leveraged instruments and the most commonly types are futures and options.
The two sugar futures markets that are traded include world sugar #11 and U.S. sugar #16. You may be surprised to find out that the U.S. sugar price is substantially higher that the world sugar prices – sometimes twice as much. I would like to say that the U.S. produces the Rolls Royce of sugar, but all the sugar is virtually the same around the world. The discrepancy in prices is due to fat subsidies and a tariff program that supports U.S. sugar farmers.
The Series 3 Exam for commodity futures broker is a 2 hour and 30 minute exam that covers knowledge on the futures markets and industry regulations. It is a test that you need to study for and we have included the key features of the series 3 exam and some helpful tips for passing the test.
Learning the meaning of commodities and futures markets and how to make money trading commodities.
Online commodities trading has many benefits to commodity traders, but it also has many dangers to the novice trader.
Fundamental research of live cattle futures, including contract specs, reports and tips on how to trade cattle futures in the commodity markets.
Most commodity traders lose money trading commodities. We look at the top reasons why commodity traders lose money and hope to educate commodity traders how they can avoid these mistakes.
You will need to search for a commodity broker once you decide to start trading commodities. I have outlined the best places to search for commodities brokers and what to look for.
Commodity brokers charge commissions per trade to their clients. How much should you pay a commodity broker in commissions? There are also ways to negotiate your commission rates.
Many investors don't utilize commodities as an investment because of many misconceptions people have of commodities.
Using fundamental analysis to research and trade commodities and futures. Supply and demand are the main factors to determine the price of commodities.
A hedger is basically a person or company that is involved in a business related to a particular commodity. They are usually a producer of a commodity or a company that needs to purchase a commodity in the future. Either party is trying to limit their risk by hedging in the commodity markets.
What is Day Trading in the Futures Markets? There are advantages and disadvantages to day trading futures. We also list the best markets for day trading futures; including t-notes, soybeans, crude oil, japanese yen and the euro fx.
An Introducing Broker (IB) is an industry term for a commodity broker or futures broker. In essence, an introducing broker is a brokerage firm that deals directly with the client, while the trade execution and back office work is left to the Futures Commission Merchant (FCM) - commonly known as a clearing firm.
The strategy of buying a call option in the futures and commodity markets. When to use this option strategy, the risks and benefits compared to buying a futures contract.
The strategy of buying a put option in the futures and commodity markets. When to use this option strategy, the risks and benefits compared to buying a futures contract.
The first thing to be done is to pass the Series 3 Exam if you are not a current broker and register as an Introducing Broker with the NFA. There must be at least one Associated Person (AP, commonly called a broker) listed with the firm. If you plan on being a one-man shop, that would be you. There are fees and paperwork associated with the registration.
Opening an account to trade commodities is probably easier than you think, but it is a major financial transaction and you can expect to fill out some paperwork and wait a couple days before you can begin trading commodities.
Futures and options both have their pros and cons. Experienced traders often use both futures and options, depending on the situation. Some traders like to focus one or the other. It is best to fully understand the characteristics of each in order to decide how to trade commodities.
Profile of Heating Oil futures including contract specs, heating oil supply and demand fundamentals, and trading ideas for heating oil futures.
Book review of How I Made One Million Dollars Trading Commodities Last Year by Larry Williams. He discuses the strategies he used in his commodity trading as well as other helpful advice on trading commodities.
Learn how to research the commodities markets and tips on trading commodities and futures to learn why the markets move higher or lower.
A commodity broker typically refers to the person who places commodity trades on behalf of his clients. The term commodity broker is also synonymous with the brokerage firm that handles commodity trades. For registration purposes, the brokerage firms are designated as Introducing Brokers(IB) or Futures Commission Merchants(FCM). The individuals are designated as Associated Persons (AP).
The Rogers International Commodities Index measured the global price level of commodities.
Fundamental research of crude oil futures, including contract specs, reports and tips on how to trade crude oil in the commodity markets.
Review of Online Futures Broker - Generic Trade. This is an online futures broker that offers very low rates with no contingencies. That means there are no account minimums and you don't have to make a certain amount of trades to get their stated commission rate.
Fundamental research of lean hog futures, including contract specs, USDA reports and tips on how to trade lean hogs in the commodity markets.
Several online sources provide futures quotes and charts. Three of the top sources for futures quotes are discussed.
Selling a commodity is just as simple as buying a commodity. Here is a simple explanation of why and how commodity traders can make money selling commodities.
There are several good books out there on day trading the commodities and futures markets. There are also many bad and misleading books that cause traders more trouble than they are worth. Below are some of the best books that I have read on day trading futures. Some of the books include a complete day trading plan, while others mainly discuss specific trading strategies.
The main reason why commodities are considered risky is that commodities are traded in futures contracts and they are highly leveraged. A commodity trader normally only has to put up 5 to 20 percent of the contract value to control the commodity investment.
Natural gas as the fuel of the future makes sense no matter which method of analysis you use. Natural gas is one of the cleanest burning fuels and the United States has enough supply to become energy independent. It has also become one of the cheapest fuels - even cheaper than coal. So why is it not the most widely used fuel in the U.S. when the facts clearly show that that it should be our number one energy source?
Whether you are starting out trading commodities or you have been trading for a number of years, there are some books that every trader or investor should read. I have read well over 100 books on trading and investing and a few stand out as highly educational and they stand the test of time. Anyone interested in the commodity and futures markets should find these books very beneficial.
Book review of Come Into My Trading Room - A Complete Guide to Trading by Dr. Alexander Elder. The psychology of trading is discussed as well as his Triple Screen System and the techniques he uses to trade futures and stocks.
Liquidity is very important to active commodity traders. The higher the volume of a futures contract on a commodity, the easier it is to get in an out of a market at the truest price – less slippage. Commodities with high volume are the often the choice for day traders and many large traders. Low volume commodity markets are often prone to wild price swings.
Crude oil is one of the better commodities to trade. It is a very active market and it is well known with investors around the world. There is usually no shortage of news to cause the price of oil to move from day to day. This presents many good trading opportunities, whether you focus on day trading futures or you are a longer-term trader or investor.
A review of Interactive Brokers where the focus is on the online futures broker part of their business. We are looking for low commission rates, trading platform, research and overall quality of this futures broker to report to our readers.
The purpose of commodity exchanges is to provide a centralized marketplace where commodity producers (commercials) can sell their commodities to those who wish to use them for manufacturing or consumption. The beauty of a commodity futures exchange is that someone like a corn farmer can lock in a price for his crops months before they are even harvested. This process increases business survival among farmers and the exchanges always make sure there is a buyer for every seller, provided their prices meet.
Copper mining stocks are a good way to invest in the copper market. They can be more conservative than copper futures and copper etfs. A list of the largest publicly traded copper mining stocks is included.
What size of account should you start with to trade commodities? They can range from $2,000 and up.
Stop order can be used to limit losses when trading commodities or to initiate positions on momentum.
Learn about online trading platforms for commodity and futures traders. A trading platform allows commodity traders to place trades electronically from their own computer. The software program allows trades exection, account monitioring, quotes and charts, and other features for traders.
Researching commodities is a very broad topic and there is no simple procedure that works for every commodity trader. In fact, do not expect to become an expert and sift through mounds of data when researching commodities. You just want enough information to make rational trading decisions.
Trend Following is a very effective trading strategy in the commodity and futures markets.
Stop loss orders are a key component to your success in trading commodities and futures. Stop losses help to limit your risk and keep you disciplined when trading.
Many professional commodity traders focus on trading spreads. A spread involves the simultaneous buying of one commodity and the selling of the same or similar commodity. Using spreads often cuts down on the risk of buying a straight commodity position.
A commodity ETF is an exchange traded fund that invests in commodities through exchange traded futures contracts. The commodity ETF is a basket of commodities that is a simplified way to diversify your investment portfolio by investing in commodities.
Moving averages are one of the most popular technical studies used in commodity and stock trading. The most commonly used technique of moving averages is for purposes of determining the trend of the market as well as finding support and resistance levels.
Profile of Coffee futures including contract specs, coffee supply and demand fundamentals, and trading ideas for coffee futures.
I often get asked - how long does it take to learn how to trade commodities? That is a tough question to answer. The short answer is that a diligent person can learn the basics of trading commodities in a couple months. The long answer is that it can take a lifetime to master.
The simplest answer to the question what are commodities is - commodities are the raw ingredients or components of almost everything we consume or use in our everyday life. Some of the most common commodities are corn, wheat, gold, silver, copper, oil, gas, cattle, sugar, coffee and cotton.
Brazil has become a major player in commodities during the last couple decades. The country is a major producer of coffee, soybeans, corn, sugar, and orange juice. The rapid increase in agriculture production in the last few decades from Brazil has probably prevented massive shortages to world inventories.
Learn the steps that it takes to become a successful commodity broker. You have to open accounts, trade the commodities markets and service your clients.
Trading commodities is a major part of being a commodity broker. Online commodity trading has become increasingly popular with investors making their own decisions, but demand by new commodity investors to have someone manage their trades will never go away. Therefore, it is important to learn everything you can about the commodity markets and trading if you want to be a commodity broker.
At first glance, ethanol seems to make sense. It is a clean burning fuel and it is better for the environment than gasoline, but things aren’t always what they seem. Ethanol solves one problem but it might be creating several larger and unintended problems.
Coffee is one of the more interesting commodities to trade. It is also usually one of the more volatile. Coffee is a member of the softs complex and most of these commodities are prone to wild swings in price.
Put option definition and uses in trading commodities and futures.
One of the first steps in trading commodities is finding out which commodities you should be trading.
DayTradeToWin.com offers an e-course or trading methodology for trading the e-mini s&p 500 futures contract. At The Open tends to get you into the market in the direction of the daily trend without chasing the market.
A margin call usually occurs when a client with a commodity trading account doesn't have sufficent funds in their account to cover the required margin to hold their positions.
There are good and bad types of commodity brokers to work for. We examine how you can determine whether you are looking at a good or bad brokerage firm.
Paper trading commodities and futures may be one of the best ways to learn how to trade without putting any money at risk. Paper trading may not be completely realsitic since no money is at risk, but paper trading is is one of the best tools to learn how to trade commodities and futures.
Momentum indicators are widely used by commodity traders to measure when a market is overbought or oversold. For traders who live by the old adage of buying low and selling high, momentum indicators are often a critical part of their trading arsenal.
Most commodity brokers and traders who have reached some type of success often think about opening their own brokerage firm at some point in their career. The pay is usually much better, but there is also a lot more work and responsibility. Each person has to realize their strengths and weaknesses and weather opening a commodities brokerage firm is the right choice.
Trading commodities for a living is a dream for most new traders, but a dream is a far thing from reality. We will discuss some of the things you can do to prepare for a full time trading career and decide if you are prepared for such a venture.
Gold mining stocks are a good way to invest in the gold market. They can be more conservative than gold futures and gold etfs. A list of the largest publicly traded gold mining stocks is included.
The USDA releases the Prospective Plantings report at the end of March each year. The report tells us how many acres are expected to be planted of each crop for the upcoming season.
What are the differences between commodities and a futures contract?
Profile of RBOB Gasoline futures including contract specs, gas fundamentals, gas reports and trading ideas for gas futures.
Fundamental research of corn futures, including contract specs, USDA reports and tips on how to trade corn in the commodity markets.
A stop limit order is a combination of a stop market order and a limit order. It is activated when the price touches your designated price. A stop limit to buy is placed above the market and a stop limit to sell is placed below the current market price.
Commodity trading strategies are simply the basis for why and when you will buy and sell commodities. You should have some well thought out strategies before you begin trading commodities.
Silver mining stocks are a good way to invest in the silver market. They can be more conservative than silver futures and silver etfs. A list of the largest publicly traded silver mining stocks is included.
Commodity prices tend to move higher during periods of inflation. Sometimes the economy exhibits high levels of inflation, as the late 1970’s is a prime example. Interest rates approached 18 percent to combat the high levels of inflation and commodity prices reached record highs during this period. Not all periods of inflation are this extreme, but commodities can perform well during periods of mild inflation.
Profile of Natural Gas futures including contract specs, natural gas supply and demand fundamentals, and trading ideas for natural gas futures.
This is a listing and description of all the agriculture commodity exchange traded funds. The ETFs include crops and livestock. The most common agriculture products in the funds are the grains: corn, soybeans and wheat.
Wheat futures fundamental research including contract specs, types of wheat, commodity exchanges traded and trading tips on wheat futures.
An explanation of selling options in the futures and commodities markets. Selling futures options is an option strategy used by many professional commodity traders.
A Trading Plan is an essential component that must be in place before you begin trading commodities. We will go over the main features of a trading plan and how to create a commodity trading plan.
Technical analysis is often used among commodity traders. It is first important to understand the basics of technical analysis before trading commodities and then you can move on to more advanced technical methods.
Commodities trade on regulated futures exchanges including the Chicago Board of Trade, Chicago Mercantile Exchange, New York Mercantile Exchange and ICE Futures US.
Book Review of WD Gann Treasure Discovered – Simple Trading Plans for Stocks and Commodities by Robert Krausz. The book details trading plans created by WD Gann and refined by Robert Krausz.
Profile of copper futures; covering copper futures contract specs, copper reports, copper fundamentals and trading ideas for copper futures.
Buying out of the money futures options is often a risky trading strategy due to the time decay. A look at the pitfalls of buying out of the money futures options and some trading strategies you can use to improve you odds.
Fundamental research of soybean futures, including contract specs, USDA reports and tips on how to trade soybeans in the commodities markets.
Profile of cotton futures, including contract specs, cotton fundamentals, cotton trading ideas and cotton market reports.
Book review of Hot Commodities – How Anyone Can Invest Profitably in the World’s Best Market by Jim Rogers. The author covers the basis the the new bull market in commodities and how long he expects it to last.
Many traders like trading commodities for the leverage, but commodities can also have some preferential tax treatment when you compare futures contracts to stocks.
Profile of Sugar futures including contract specs, sugar supply and demand fundamentals, and trading ideas for sugar futures.
The original Turtles Trading System is described in this article. It was originally created by Richard Dennis and taught to his students in 1983. Richard Dennis used this very same system to make a fortune and he is one of the top traders and money managers of all time. His students made an average of 80 percent annual compound rate of return in their first 4 years using this system.
Orange juice futures fundamental research including contract specs, supply and demand of orange juice and trading tips on orange juice.
Most new Commodity Investors will find it beneficial to hire a full service commodity broker to help with their trading education and chance to make profits.
Book review of The Logical Trader by Mark Fisher. The book details the ACD Trading Method that Mark Fisher has been using as a professional commodity trader.
Futures Option Quotes is often more difficult than one might expect. Here is one online source that offers free online futures quotes on most commodity and futures markets.
There are developing political, economic and weather issues occurring everyday around the world that causes prices of commodities to move higher and lower. While opportunities seem endless to make money in commodities, only select commodities are available for direct investment.
Commodities have become a more mainstream investment class in the last decade, primarily due to the fact the commodities have performed much better than other investments. Today, investors have many new sources to invest in commodities.
Profile of Gold futures including contract specs, gold fundamentals, gold reports and trading ideas for gold futures.
Learning about each particular commodity is an important step before you begin trading commodities. The report includes profiles of grain, metal, energy, soft and livestock commodities.
Nadex is a commodity exchange regulated by the CFTC, which trades binary options on commodities like gold, silver, oil corn and soybeans. The contract are an all or nothing outcome, similiar to a bet where you either win it all or lose it all.
Many commodity traders often fall into the trap of not knowing when to take profits on their commodity trades. Sometimes they take profits too quickly and other times they hold out for a big move and their quick profit turns into a loss. Knowing when to get out of a trade can often be very difficult, but there are some easy steps to take that will help alleviate this problem.
Book review of Entries and Exits - Visits to Sixteen Trading Rooms by Dr. Alexander Elder. Interviews of sixteen traders of commodities, futures, stocks and options. They discuss their trading strategies and trades, while Dr Elder analyzes their trades.
Secrets of Traders by Larry Levin provides a futures trading course to help traders learn how to trade the e-mini S&P and commodities. The trading program includes a Futures Trading Manual, several DVDs, a mental trading course and one on one trading help with Larry Levin.
Rough rice futures fundamental research including contract specs, types of rice, commodity exchanges traded and trading tips on rice futures.
Profile of Cocoa futures including contract specs, cocoa crops, cocoa supply and demand fundamentals, and trading tips for cocoa futures.
Read and understand the key components of the USDA grain stocks report.
Book Review of Reading Price Charts Bar By Bar – The Technical Analysis Of Price Action For The Serious Trader by Al Brooks. This is an exceptional book on trading primarily of price action on the charts. Al Brooks uses only a 5 minute chart with a 20 period moving average to trade.
Commodity traders still have the option of using pit trading or electronic trading in several commodity markets. The ICE futures exchange has increased its presence in recent years and it is completely electronic - no pit trading. The old school thought is that pit trading is the most efficient form of price discovery, but it is hard to deny the benefits of electronic trading. So, which is better?
The details of investing in managed futures including CTAs, past performance, disclosure documents and futures trading strategies.
This is the most recent listing of futures margin rates for trading commodity futures. It should be used as an example, since many futures brokers will have different futures margins and they do change with market conditions.
Most people have heard of commodities, but they have no idea of how to invest in them. The mere thought of trading commodities scares them away in an instant. Commodities carry some type of stigma that often makes people think they are too exotic or too dangerous for investment purposes. Where people see fear, others see opportunity. It is this type of adventurous person that looks to make a buck from an often-misunderstood investment vehicle.
Learn the basics of creating a commodity trading system including: markets to trade, entry rules, exit rules, money management, stop losses and an example of a simple commodity trading system.
Profile of Silver futures including contract specs, silver fundamentals, silver reports and trading ideas for silver futures.
There are many ways to utilize futures options to lower your risk when trading commodities. Here are some examples of futures option strategies where you sell options against eother option positions or buy options to protect against downside risk in futures positions. These strategies could lower your overall trading risk and help you become more profitable.
The Bull Call Spread is one of the most common futures option spreads. It is fairly easy to understand how the option spread works and to place this option trade.
What is the Continuous Commodity Index (CCI) and what commodities make up the index? The CCI dates back to 1957 and was formerly known as the CRB Index.
Book review of Fibonacci Trading – How to Master the Time and Price Advantage by Carolyn Boroden. The book details an explanation of Fibonacci ratios and how to use them in trading commodities.
The USDA releases weekly crop progress reports during the growing season on the current status of crops in the U.S. These reports reveal vital information for commodity investors as they get an unbiased view of how well crops are developing during the growing season. Commodity investors tend to focus mainly on corn, soybeans, wheat and cotton when they analyze the USDA weekly crop reports, which are released every Monday.
The fact is that many new commodity brokers struggle to make a living. Most new brokers work on a commission basis and some receive a token salary just to pay the basic bills. Getting through the first six months can be painful, but it will take some hard work and talent to make a career as a commodity broker.
Some commodity traders make a good living from focusing on trading a single commodity. There are about 30 commodities that are fairly actively traded, but it is difficult to keep up with all the commodities and trade them. Some traders like the expanded range of opportunities if they follow many commodities, but a good case can be made for specializing in one commodity.
Book review of What I Learned Losing A Million Dollars by Jim Paul and Brendan Moynihan. The book is a real life story of a commodity trader who lost $1.6 million dollars trading commodities. The story is entertaining, but the focus of the book is what he learned from the process, which may be invaluable to many commodity traders.
The Dow Jones - AIG Commodity Index is a diversified measure of the commodities futures markets.
Day Trading Grain Futures is one of the few books that focuses solely on day trading the grain futures markets. The author, David Bennett, details his complete trading methodology in this book.
The benefits of an option selling strategy for trading the futures and commodities markets. The odds are in your favor by selling options but you also have to control the risk.
Book review of Day Trading by Joe Ross. This manual covers how to day trade futures contracts, while understanding how to read the futures markets. Joe Ross also includes many of his day trading methodologies that are easy to understand.
Weekly research and analysis of the commodities markets. A review of the week in trading and an outlook to next week for the commodity futures markets.
Higher volatility normally means there are wider price swings and more risk when trading a commodity, but it also means you may need to adjust your trading strategy to fit the volatility of a market.
As gold has marched higher throughout the last decade, there has been no shortage of market predictions for gold prices. I remember when $1,000 once seemed like a radical prediction. Then it was $2,000. Then it was $5,000. As you might guess, $10,000 was the next magical number being predicted.
A review of ExpressFutures.com. This company is an online futures broker. We examine their commission rates, trading platforms, research and the overall quality of this futures broker to report to our readers.
Looking for information to research commodities to make trading decisions is not always an easy task. Commodities are not as mainstream an investment as stocks, so you have to look a little deeper to find the latest news and research. The good news is that there is plenty of research on commodities, but you just have to know where to find it.
The definition of a strike price in commodities and futures options.
Seasonality often plays a part in determining prices for commodities in regular cycles throughout the year. Normal increases and decreases in supply and demand for particular commodities seem to occur every year in fairly consistent patterns.
Trading corn futures can be fairly subdued during the winter months, while the summer months are not for the faint of heart. Corn is planted in the spring and harvested in the fall. This growing season is when most of the action in corn prices take place. The winter months usually deal with demand and how much of the harvested crop is sold on a weekly basis. The summer months often have a barrage of weather problems that can keep corn traders on edge with every updated weather report.
Does a full service commodity broker have an advantage over an online commodity broker? Or, are the lower commission rates with an online commodity broker such a large factor that the savings on commissions far outweigh the benefits of using a full service commodity broker?
The bear put option spread requires buying a put option that is typically at the money and selling another put option that is out of the money. You can use a wide variety of strike prices to suit your trading goals, but the option you buy must be closer to the money and the option you sell must be further out of the money.
With the combination of futures and options, a trader is able to come up with just about any type of strategy for trading a market. Utilizing options with futures usually makes a trade more conservative, but sometimes you can actually make more profits than using just one instrument.
Time decay of futures options is a major factor option traders must consider before they buy a futures option contract. Time decay of options means that options theoretically lose money every day, since they have a limited life.
There are many versions of online trading available for commodity traders and this can cause confusion or indecision. The good news is that many platforms and options are available for the benefit of traders and once you understand what you need, the process quickly becomes an afterthought.
Review of TradeStation Securities, which is an online futures broker that executes trades on futures, stocks and options.