Understanding how commodity online trading works

Commodity online trading with advances in internet technology and speed allow for trading at a convenience and real-time efficiency that in past decades traders could only dream of. While the stock markets are known for trading billions in value per open day, the truth is that those numbers get dwarfed in comparison to what commodities are trading at.

Commodity online tradingThe commodities markets are many times the trading size of even all the world stock markets combined and are second only to the forex market in sheer value traded.

The essentials of commodity online trading

The key to commodity online trading is understanding that there is a wide array of different commodities that can be traded, and the first steps towards being able to successfully and profitably trade at this level are:

- Learn technical analysis and how to apply it to trading charts

- Focus on just a few specific commodities to specialize in to increase your understanding of the fundamental markets

These two steps in and of themselves can go a long way towards becoming more successful as a commodities trader. The problem with trying to go too broad means that you will have too much information to absorb and too many charts to follow to accurately take the proper actions and precautions on every trade.

When you're talking about commodity online trading, it's worth knowing what the ten main commodities markets are that getting the most trading action. Those commodities are:

- Crude oil (this is why every news shows the cost of a barrel of crude oil)

- Natural gas

- Gold, silver, copper & other precious metals (though gold and silver are the largest)

- Corn & soybeans

- Cattle prices

- Hog prices

- Coffee

- Other agricultural crops

This is also a good time to note that depending where you're trading from or what economy you're dealing with, that the location can change what is traded. Common commodities that show up on every newscast in the Midwest of the United States include corn, soybeans, hogs, and cattle. Australia pays close attention to the price of zinc while Central & South America really cares about coffee prices.

In conclusion

There's a lot that falls under the general umbrella term of the commodities market, but by understanding how technical commodity online trading works and doing some serious research beforehand, even a beginning day trader has the ability to learn, adapt, and become a successful trader. Knowledge, practice, and timing are what make up that thing called "skill."


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