HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
Exness information and reviews
Exness
86%

What Are Commodities and How to Trade Them?


Since the beginning of human civilization, commodities have been a vital investment asset. In short, a commodity is a basic good or raw material that people buy and sell. Usually, commodities are the building blocks for more complex goods and services.

Commodity trading covers the buying and selling of a broad range of instruments, including oil and gas, metals, and other primary processing products like coffee, corn, and sugar. For investors, commodities are an important way to diversify their trading portfolios.

Commodities are risky investments because their market is impacted by circumstances impossible to predict – unusual weather patterns, epidemics, natural and human-made disasters. If you want to trade commodities, you always need to keep up to date with the latest news.

What kinds of commodities exist?


There are four main categories of commodities on the market:

Commodities also split into hard and soft ones. Hard commodities are natural resources that must be mined or extracted (gold, oil, etc.), while soft commodities are agricultural products or livestock (wheat, sugar, hides, etc.)

How to trade commodities?


Trading commodities doesn't quite differ from trading currency pairs. But let's have a look at the step-by-step instruction on how to do it:

Can you make money trading commodities?


Commodity trading has its advantages and disadvantages. The main advantage of commodities is that their performance is not strictly dependent on the equity and bond markets. This reduces the overall risk for investors who want to build a diversified portfolio.

Commodity markets usually are very liquid, meaning you can quickly enter and exit them. Although it’s not a get-rich-quick scheme, commodities can potentially give huge profits if traded carefully and smartly.

The disadvantages of commodity trading are that markets are volatile, which means risk is higher, especially for new and non-experienced investors. So, be careful and get ready for any outcome – you can win big or lose big.

At FBS, you can trade precious metals at both Standard and Cent accounts. If you are still unsure whether you want to add commodities into your trading portfolio, try our demo accounts before entering the real market.

#source


RELATED

How to Effectively Assess Your Forex Trading Performance

In the fast-paced world of Forex trading, constant growth and adaptation are essential. This not only demands a thorough understanding of the market dynamics but also necessitates regular assessment of one's trading performance...

Why Trade Forex: All around Forex Trading

It is widely known that forex is the most traded market in the world so once someone understands its benefits, it will become easier to understand why they need to trade forex...

Choosing a trading instrument: how to trade currency pairs

Early on the path to becoming a trader, every beginner must determine what to trade and how. This choice should be made based on the desired goals...

History of derivatives. Part 1. What are financial instruments?

You’ve been hearing about trading instruments here and there. This article will briefly introduce you to derivatives, forwards, and futures. Get comfortable and enjoy interesting information...

How Are Commodities Traded In Simple Terms

The lookout for how are commodities Traded is as old as the financial market itself. Perhaps commodities trading is even older than the financial market...

Choosing the Proper Forex Trading Strategy

A simple trading strategy is what most traders choose as a starting point. For instance, when a certain currency pair tends to come back from a particular...

Frequently asked questions about Cryptocurrency CFDs

Bitcoin is a digital currency that was created in 2009. Its creators are unknown, as they disguised themselves using the alias of Satoshi Nakamoto. When Bitcoins are bought or sold...

Most Important Forex Regulators in the World Today

It is important to regulate forex because the amount of money which passes through the market everyday makes it very attractive for all sorts of scammers...

Earnings Season: What Are They And How To Trade On Them

While marketing campaigns and plans from the top management are good, nothing says "We are successful" as well as a positive quarterly earnings report...

3 Not-so-hot Tips for New Traders From

A new wave of investors, or collectively known as “Generation Investors”, has spurred into the stock market during the pandemic. Research conducted by the FINRA Investor...

Why Trade Indices

Indices trading describes the buying and selling of a specific stock market index. An index shows the performance of a group of stocks. When the price of a group of stocks go up...

Optimal & Suboptimal Hours in Forex Trading

In the grand tapestry of financial markets, the needle of time weaves intricate patterns. Among traders and investors, the perennial quest to discern the right moments to enter or exit the market resonates deeply...

What is a moving average and how do I use it?

Moving averages are one of the easiest types of technical indicator to understand and use. They provide a simplified view of the price action of an asset, with most...

3 Common Trading Mistakes that can Affect your Trading Plan

How long does it take to profit in online trading? Check out this article to see 3 common mistakes made by traders that may also be affecting your trades!

Top Trading Picks 2024: Mastering the Financial Markets for Optimal Success

As we step into 2024, the financial markets offer a kaleidoscope of opportunities for both novice and seasoned traders. With an overwhelming array of advice on financial planning and investment strategies...

Position Trading vs. Swing Trading: Differences and Similarities

Position trading and swing trading are two prominent trading strategies that you can use to access the markets. Both methods provide market opportunities as you trade...

Financial Instruments Explained: Types And Asset Classes

Every beginning investor, having defined his investment objectives and risk profile, thinks about how to structure his portfolio so that it meets his needs...

Guide to Copy Trading: How to Replicate Trades

Copy trading presents the opportunity to mirror the trades executed by other experienced traders in real-time. The concept is to identify a trader with a proven track record...

Octa broker: leveraging AI to revolutionise trading and investments

AI has already made a profound impact on the financial markets. Its ability to predict trends, execute trades swiftly, and manage risk is transforming investment strategies at its core.

What is revenge trading?

Revenge trading has been identified as one of the major causes of traders' failure. In fact, Brett Steenbarger, a well-known trader and trading coach...

FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Just2Trade information and reviews
Just2Trade
76%
FXNovus information and reviews
FXNovus
75%
Riverquode information and reviews
Riverquode
75%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.