Why Trade Commodities

Learn How To Invest Profitably In The World’s Best Market!

How would you like to earn a second income by investing in the futures market? A new bull market is already under way, and it is in commodities. If you look around your homes or enter a supermarket, you are surrounded by commodities that are traded around the world. When you get into your car, you are surrounded by other widely traded commodities. Without the futures markets setting and regulating prices, the basics items we all need in life would be scarce and often expensive. These essentials include crude oil, natural gas, corn, wheat, soybeans, copper, silver, gold, platinum, palladium, sugar, coffee, rice, lumber etc. As economies in Asia continue to grow, there will be a strong worldwide demand for all commodities. China, in particular, has moved quickly from a major exporter to an importer of commodities, consuming copper, oil, soybeans and other raw materials voraciously. With more than 1.3 billion people, China faces a considerable demand for commodities. The biggest fear that someone faces is losing their jobs and thus not being able to support their family or paying the monthly mortgage payments. As one grows older, this fear becomes more prevalent. We are already facing a massive pension’s crisis with the government expecting us to work until we are older, our council tax increases each year, owning a property is very costly, students are leaving universities with large debts, the average consumer is finding it extremely hard to make ends meet and is resorting to borrowing on their credit cards to supplement their incomes. How many of us dream of having a second income and possibly one day being debt free? Many of us are familiar with buying shares in a company. The whole idea is that we buy shares in a company when its share price appears attractive and hope to make a profit in the long term. There is no guarantee, very often when we expect a company’s share price to increase the opposite happens. Furthermore, ask the investors of Enron, MCI World Com, Tyco and most recently Livedoor to name a few. The Sarbanes Oxley Act of 2002 was introduced to prevent these scandals but as always in life there is no guarantee. Did you know that when trading futures you can also make profits when prices fall (assuming you are short on a contract)? I personally love trading futures because profits as well as losses can be generated in a shorter time frame particularly with the currency markets. Losses are a fact of life in any businesses. The beauty with futures trading is that you can dictate from the moment you enter a trade how much you are willing to lose before closing the trade. In order to achieve success in trading commodities (futures) one must abide by a trading plan. The veteran traders would always cite money management techniques and the fact that one should never risk more than 3% to 5% of their trading capital. There are numerous textbooks and articles that would emphasize that in order to survive in this industry one should let one’s profits run and cut one’s losses short. One should avoid the element of fear and greed and thus the psychology of trading becomes essential. The Futures Industry Association (FIA) has reported that in the first nine months of 2005, a grand total of 7.28 billion futures and options contracts were traded on derivatives exchanges around the world. Remarkably, some of the fastest growing exchanges in the world were in the US, arguably the most mature market for futures and options. Looking again at that same nine- month period, January to September 2005, the FIA calculates that 2.57 billion contracts were traded on the US futures and options exchanges, up about 25% from the same period in 2004. Looking just at the month of September 2005, the year-over-year growth rate at the US exchanges was nearly 40%. What these numbers tell us is that more and more investors and traders are becoming interested in trading commodity and financial futures. Even the New York Stock Exchange has expressed a serious interest in the derivatives business, because it knows that futures’ trading is growing much faster than cash equities trading. Futures trading volume has been growing at 15% a year over the last 20 years, and the rate of growth has been accelerating since 2000. Wall Street used to think of the futures industry as a bunch of guys trading pork bellies and soybeans. But now there is an increasingly widespread recognition that in a modern economy, with a modern financial system, futures and options have a central role as instruments for price discovery, risk management, and of course speculation in pursuit of profits. Trading futures can be very risky as well as very rewarding. Most brokers would ask an initial deposit of $5,000 to open an account. This is in effect your trading capital. If for instance, you bought 1 contract of June Crude Oil and within 24 hours the price rose and you decided to close the trade with a profit of $700, your trading capital would now become $5,700 before commissions and fees which is generally about $30 round turn depending on your broker. This cost is probably lower if you decide to trade futures online. It is important to have a trading plan, trading software and most importantly effective money management techniques in order to increase your probability of success. If you would like to supplement your income and pay your debts or perhaps retire early then explore this website. If you believe that futures’ trading is too risky for you, then why not paper trade (not risking any money) for a while and see the potential of the wonderful world of commodities trading! I can show you how using the Track n Trade software and by spending a few minutes a day one can identify potential trade setups. Lan Turner of Gecko Software is responsible for the development of this excellent software. I have tried many trading software and I certainly recommend this highly. It is easy to use, reliable and most importantly affordable. Trading futures or any markets you decide, is the absolute perfect business. However, you must learn to trade correctly and control your fear and greed whilst preserving your capital. I have listed below some of the advantages and disadvantages of futures trading: Advantages • Low start up costs - only your computer • Low overheads - work from home • No set hours - trade when you want • No worries about market direction - profit from short or long positions • Leverage. A small deposit (margin) allows you to control the full contract value. For example, a deposit of $2,700 (depends on your broker) allows you to buy or sell one Platinum contract consisting of 50 troy ounces of Platinum. • Inflation and recession proof   Disadvantages • Subject to margin calls if the market moves against your positions • Leverage Can be a double-edged sword. Low margin requirements can encourage poor money management, leading to excessive risk taking. Not only are profits enhanced but so are losses!   I hope you enjoy this website and will take the opportunity to explore the wonderful world of futures trading. Please contact me in the contact us section to answer any questions you may have. The future is bright, the future is commodities!

Explore Opportunities

It is important to have a trading plan, trading software and most importantly effective money management techniques in order to increase your probability of success. If you would like to supplement your income and pay your debts or perhaps retire early then explore this website.

Familiar With Stocks?

Many of us are familiar with buying shares in a company. The whole idea is that we buy shares in a company when its share price appears attractive and hope to make a profit in the long term. There is no guarantee, very often when we expect a company’s share price to increase the opposite happens.

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