If you want to trade commodities, you have to pay attention to more than just the supply stockpiles, growing season and weather. In fact, you need to use the commodity trading tips, and other information found here to have success with this.
Don’t Overtrade
If you overtrade, you are going to quickly lose your capital. Overtrading refers to risking too much money on a single trade. This is the absolute, number one commodity trading tip you need to adhere to. There is no question that you will be losing trades when working with features and options, which means you need to manage those losses and move on to other trades.
Trade According to the Short Term Trend
The saying in futures trading goes, “the trend is your friend.” In some cases, the market that is trending higher has a false breakout and then suddenly sells off and results in a two percent loss on your equity. You assume that was a bad trade and do something different next time. However, commodity trading is all about percentages and if you follow the path of least resistance, more often than you don’t then you will have real possibilities of success working for you.
Never Add to Losing Positions
If the position keeps going against you, and you add more contracts, which all lose money, then your account is going to suffer much higher losses than before. In some situations, adding positions and not getting out of losing trades may wipe your account all the way down to zero, just because of a few poor trades.
Using the tips here will help you have the highest chance of success with your commodity trading. Don’t rush in if you don’t know what to do. In the long run, it will cost you. Those who are interested in learning more can also get a free trial.
