What are goods?
There are two types of commodities:
Natural, requiring extraction. These include oil, iron, oil, gold, silver and others. They can be divided into subcategories — energy products, metals, etc.
Agricultural products — wheat, sugar, corn, coffee, and the like. Traders classify them into sub-categories, such as agricultural or livestock products.
Exchange Commodities. How to trade them?There are several ways to make money on the prediction of the price of raw materials without making a physical purchase of goods. CFDs (contracts for difference) or futures contracts come to help traders. At Eiler FX, we use CFDs to earn on commodities.
CFD contracts are financial instruments that are contracts to trade commodities at a specified price on a specified date, allowing traders to speculate on price movements. Their prices depend on the price of the asset itself. As a result, you do not have to buy raw materials, you only need to predict the rise and fall of the price of it.
What goods are the most liquid?Traders make money by speculating the price of Brent and WTI oil, natural gas, gold, silver, copper, and agricultural products — wheat, soybeans, cotton, since all types of products are characterized by high volume. That gives greater liquidity and high chances of earning.
The price of each exchange product depends on:
Supply and demand
Economic indicators and inflation
Current volumes of raw materials
Natural disasters and elements
Transportation and storage costs
Choose a commodity trading strategy
The main step to making money when trading commodity contracts is to have a well thought out and strong strategy. Go long or short a trade if you think the price will go up or down. In addition, it is important to explore the features of these products themselves.
Search and study the reports of brokerage and research companies.
Monetize financial news daily. Subscribe to the Commodity Newsletter to stay up to date with all the latest news.
When trading commodities, be sure to rely on fundamental and technical analysis.
Choose just one trading strategy (level break trading, range limit trading, etc.) or create your own if you have trading experience.
With Stop Loss, Trailing Stop and Guaranteed Stop orders you can manage your risk.