This course is intended for beginner. Please spend an
hour or two to understand the basics
of commodity trading.
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Most commodities trading is done in the form of futures or options and it's that scenario that gives rise to most of the huge potential for profit and loss...
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Let's examine a highly simplified commodities future contract trade...
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There are more than a dozen major commodity exchanges around the world, reflecting the global nature of speculation today...
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Stocks and bonds aren't the sort of thing the novice investor typically thinks of as a commodity...
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Commodities are categorized for ease of price comparison, research and other conveniences in trading...
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Most trades are carried out by buying and selling futures contracts, rather than trading directly in the commodity...
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Exchanges monitor prices, volatility and many other factors to determine acceptable levels of risk and then set the margins accordingly...
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Why do futures offer any advantage over trading the commodity directly...
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Coffee prices have been rising for the last two years, after a substantial dip...
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No one can predict oil prices with certainty, but there are several large scale factors that make reasonable projection possible...
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Silver is unique among commodities. Like gold and a few others, private investors can feasibly take actual delivery...
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Soybeans aren't sexy... except to a commodities trader. Yet this grain is among the lowest risk, most potentially profitable trades around...
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Uranium has a number of natural advantages over oil or other energy sources...
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Since commodities and stock prices tend to move in opposite directions, commodities form part of many intelligent hedging strategies...
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Since early 2000 commodities have risen substantially. Gold has increased over 25% and oil has nearly doubled. During this same period commodity funds have seen double-digit returns...
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A large number of common trading strategies are for the purpose not only of making a profit but, as a hedge...
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Hedging is essentially recognizing a hard fact: traders can't predict prices correctly 100% of the time...
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Fundamental analysis in commodities trading runs counter to one basic difference with the stock market...
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Expectancy is a powerful trading tool and one that isn't used often enough by novice traders...
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