Tag Archive | "commodities"

Commodities: An Overview

Commodities: An Overview

Commodities are products traded solely on the basis of price. The products are undifferentiated products, goods or services that are not traded based on quality and features, only on price. Historically, commodities were items of value, of uniform quality that were produced in large quantities by many different producers. The items from each different producer were considered equivalent. Commodities are defined by an underlying contract and standard, rather than the quality of the product.

History

Chicago was the birth place of the first commodities market, way back in the 1840s. Farmers would bring their wheat to the market and exchange it for good, hard cash. Futures contracts developed from there. A farmer would contract with a dealer to sell a set amount of produce to him at a set date for a set price. It was comforting for both parties since the farmer knew how much he was going to get paid and the dealer knew exactly how much he was going to pay for these commodities.

This practice of commodities trading evolved over the years that ensued. The farmer would decide not to sell and cede the contract to another farmer to fulfil, or the dealer might decide that he did not want the produce anymore and then on-sell the contract to another dealer. Naturally supply and demand entered the equation. If the harvests were poor, the produce would fetch a much higher price and if the crops were abundant, a leaner price prevailed.

Before long, speculators were in on the act. They started trading the futures contracts in the hope of buying the commodities at a low price and selling these for a handsome profit.

What defines a successfully tradable commodity?

To successfully trade, commodities must:

·Be standardized. If the commodities industrial or agricultural, it must be unprocessed.

·Have an adequate shelf-life, if these are agricultural.

·There should be sufficient fluctuation in supply and concomitantly price. The reason for this is that without the risk factor, profits are meagre and unappetising.

Examples of commodities are: electricity, wheat, chemicals, metals, pork bellies, RAM chips, labour and currency.

Difference between commodities and stocks

The main difference between stocks and futures contracts from a trading perspective is that, unlike stocks, which you could keep for a very long time, commodities are held for a very short time only. Futures contracts are used to hedge commodity price-fluctuation risks or to take advantage of price movements, instead of trading the actual cash commodities.

How are commodities traded?

Commodity Future and option trading take place at exchanges such as the Chicago Board of Trade, Euronext.liffe, London Metal Exchange and the New York Mercantile Exchange, and other online trading systems. At the exchanges, areas are provided, each designated for a different futures contract. Those trading on the floor must be members of the exchange and registered with the Commodity Futures Trading Commission. Those traders, who are not members, work through brokerage firms who are.

To conclude

Commodity future option trading is both complex and risky, so the shoe may not necessarily fit just anybody’s foot. If you are considering commodity future option trading, you should evaluate how much you are prepared to lose should push come to shove. Choose a trading method that you are comfortable with and that is best suited to achieving your objectives. The bottom line in commodity future option trading is that, if you exercise good judgment and manage your risks effectively, commodities trading are likely to richly reward your efforts!

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Why Forex Is A Better Investment Idea Than Stocks or Commodities

Why Forex Is A Better Investment Idea Than Stocks or Commodities

Forex, the Foreign Exchange Market, is a worldwide marketplace for obtaining plus marketing foreign currencies. The main currencies which are traded include the U.S. Dollar (USD), Euro (EUR), British Pound (GBP), Canadian Dollar (CAD), Australian Dollar (AUD), Japanese Yen (JPY), as well as the Swiss Franc (CHF). The cause of the post is to not go into the facts of how Forex functions, however, to compare the pros of trading inside the Forex marketplace vs trading the Equity (American stocks) or Futures markets (Commodities).

The Forex marketplace is the biggest marketplace inside the globe with over 2 trillion $ traded daily. This compares to the 210 billion $ traded daily inside the Equity plus Futures marketplace every. Because of the, the Forex marketplace advantages from fairer costs, cost stability, plus greater trade performance.

Forex has the benefit of being open 24 hours a day. The Forex marketplace opens about Sunday afternoon plus remains open till it closes about Friday afternoon. The Equity plus Futures markets are just open Monday from Friday 8:30 the.m. to 5:00 p.m. Eastern Standard Time. This provides Forex traders the chance to trade about their individual schedule. Additionally, liquidity inside the Equity plus Futures markets are reduced following standard trading hours.

Whenever trading Forex, you’ll not incur the profits or transaction fees which exist inside the Equity plus Futures markets. You pay a spread found on the currency pair you may be trading plus bills are low, incredibly compared to the different markets.

Investment leverage inside the Forex marketplace is because significant because a 200:1 margin. In the Equity plus Futures markets a average margin is 4:1. This signifies to control ,000 value of currency with just a 50-dollar margin.

In the Equity plus Futures markets, investors are expected to fund many 1000 $ to open a trading account. In the Forex marketplace, you are able to open a mini account for just 300 $ plus start trading.

In the Equity marketplace, brief marketing is rather dangerous plus comes with restrictions. In the Forex marketplace, you can purchase lengthy or market brief any currency pair without restrictions or difference inside risk.

As an trader inside the Forex marketplace, you can focus about just a some main currencies. There are 7 main currencies yielding 4 main currency pairs that many Forex investors focus about. Whereas inside the Equity marketplace, investors have over 40,000 stocks to select from whenever considering where to invest their revenue.

There are numerous factors to consider whenever selecting that marketplace you need to invest a time plus funds. The Forex marketplace delivers numerous advantages over the additional main investment markets which allows we, the trader, to create heavier income, take less risk, plus invest longer with the individual existence plus less time investing.

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Forex Trading Vs. Commodities – See What We Could Be Missing

Forex Trading Vs. Commodities – See What We Could Be Missing

Foreign Currency Exchange (Forex) Trading involves determining whether a certain nation’s currency can increase or down compared to another main currency. If you trade inside the Forex, we trade currency pairs: Pairs of nationwide currencies that rise or down relative to every alternative.

If you trade Commodities (anything found naturally inside nature or planted) we determine when the cost of the certain commodity can increase or down based about whether we believe there is a wise growing season, improved mining prospects, a bad growing season, floods, drought, strikes etc. Mother Nature plays a much stronger character inside trading commodities than it does inside trading currency. And all of us understand “It’s not good to trick Mother Nature”.

World Events:

As revealed above, the continual change inside weather patterns from year to year could play havoc found on the commodities marketplace. If it’s not the weather it may be strikes by miners, modern mineral discoveries, dry holes, war or perhaps a multitude of different occasions, all that will completely change the outlook for commodities. The possibility of wise sized gains exists inside the commodities marketplace, however the danger of big losses due to crop failures, etc. is equally present. We need to be truly cautious in the event you play the commodities marketplace. With currency, the Forex Market could equally be affected by worldwide changes, even so they usually have a less dramatic impact on the portfolio than what will happen with commodities. Overall the Forex marketplace is the safer bet of the 2.

Forex Trading Information Simple to Find:

Information regarding trading commodities is very difficult to locate, particularly info that is free. There is an ample amount of info accessible, yet a great deal of it’s costly to get. Forex info is more accessible plus almost all of it’s free. You are able to also sign up for practice accounts at numerous Forex websites plus really try a hand at Forex trading without endangering the capital. This makes for a fantastic introduction to Forex Trading plus lets we understand what the possibilities are. These practice accounts inside Forex Trading are usually not obtainable in the commodities arena.

Hours of Operation:

The Forex Market is open 24 hours a day, five days a week. There is not any alternative marketplace open this lengthy. If you trade the Forex, we have more solutions plus time to complete a trades plus trade again than with commodities or any different marketplace.

Liquidity – Ease of Purchasing plus Selling:

Again, the Forex Market does the many amount than all additional markets. If it will be convenient to purchase plus market positions, Forex is the simplest with all its amount.

Highly Predictable:

Commodity costs will jump around the board depending about need, weather, crop percentages planted, oil found or not found, etc. Forex markets are more predictable. Sure, currency costs may fluctuate plus become volatile sometimes, yet there is much more of the pattern included with Forex. There are more styles built inside Forex which is followed compared to the commodity marketplace. This will help you be consistent whenever trading the Forex.

Commission Free Trading plus Instantaneous Order Execution:
Because the Forex Market is an open marketplace plus has no centralized trading floor, whenever we trade inside the Forex, we don’t pay a middleman. In alternative words, we don’t pay a commission to trade. Money is produced by organizations found on the difference amongst the call plus ask cost, nevertheless which happens with any marketplace. The truth which we don’t pay profits or fees can definitely help save you funds inside the extended run.

Both Commodities Trading plus Forex Trading is exciting plus successful. It is as much as the individual trader to determine that is right for their respective condition. With more info accessible for Forex Trading plus with all the info being free or truly inexpensive, complete with free demo accounts accessible to practice trading, it’s difficult to fail with Forex Trading.

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Fast and Furious Trading: High Frequency Forex Trading Techniques

More Videos: www.fxcmexpo.com High frequency forex trading for individual investors differs from institutional trading in various ways. Individual investors are limited in their trading capacity when compared to financial institutions, and as a result, there are some techniques individual investors can implement when trading the major currencies on an intraday basis. Day traders should look for currency pairs with tight spreads, and take a position when there is a high level of depth in the market to avoid slippage. Assessing the times when market liquidity is high can help fill market orders quickly, which could help to avoid missing a profitable opportunity.

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Top Ten Basic Technical Indicators

More Videos: www.fxcmexpo.com Thomas Long takes a look at ten of the most popular technical indicators available to traders in todays forex markets. Thomas explains how these indicators are calculated and discusses some of their strengths and weaknesses. This presentation is meant for traders who wish to learn more about these tools to get a better understanding of how they can be used when trading.

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Forex Trading Tips: Limit and Limit Entry Orders

Use Limit and Limit Entry Orders www.fxcm.com FXCM recommends that traders use limit entry orders to open positions and limit orders to close positions. Why? With these order types you can only receive your requested price or better.

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Plus500 Online Trading Platform [Forex, Stocks, Commodities, Indices]

Click here to read the review and find out more about Plus500 Forex broker: www.wheretoforex.com Plus500 Forex Broker offers you fast and efficient forex trading, CFDs trading, EquityStocks trading, commodities and indices trading. Open an account for free and start trading, trade with…

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The Vulcan Report (191) – Silver Futures and Silver Spot along with AGQ.mp4

To Join the LIVE CHAT ROOM during market hours (Live During regular market hours 9:30am – 4:00pm EST MF) TO LOG INTO THE CHAT GO TO – blackopstrading.chatango.com blackopstrading.chatango.com Please remember to RATE, SHARE, FAVORITE, COMMENT AND SUBSCRIBE. Help support this channel by…

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Black Ops Trading (7-28-2011) – TUTORIAL – HOW TO ENTER ORDERS ON OANDA PLATFORM.mp4

To Join the LIVE CHAT ROOM during market hours (Live During regular market hours 9:30am – 4:00pm EST MF) TO LOG INTO THE CHAT GO TO – Send me a private message request or simply visit The Vulcan Report live chat at blackopstrading.chatango.com and request a subscription. Please remember…

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Forex Never Sleeps | Forex Trading with FXCM

FXCM inc. (NYSE:FXCM ) an online provider of forex trading and related services worldwide, recently launched new TV commercials to compliment its new sponsorship of CNBCs New Forex TV Show: "Money in Motion Currency Trading" View FXCMs new TV commercials here on YouTube or during the show airing on CNBC at 5:30 EST on Fridays. In this campaign, "Forex Never Sleeps", youll see a table full of traders who, one by one, start to pack up their computers and head home at 4pm when the stock market closes, until only the Forex trader remains. Unlike the stock market, Forex does not sleep and is a 24 hour market. Learn more www.fxcm.com

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Forex Strategies

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