Commodities play an important role in everyone’s daily life in a way or so. Directly or indirectly these commodities are the basic goods or in other words a building blocks of the global economy, natural resources traded on exchanges around the world.
The commodity markets are traded in a similar way to other types of financial markets, but there are some points to be aware of to avoid any shocks or surprises when dipping your toe into commodities trading.
How to trade Commodity
Choose your market products
Commodity has a vast option. For example, some people trade natural gas, crude oil, coffee, cocoa, etc. Choose the commodity that you want to spread or trade CFDs on.
Decision of buying or selling
The decision of buying or selling a commodity should be dependent on the market situation which means buy if you think the price will go high and sell if you think the price is going down.
Know your trade
When trading CFDs the value of one unit can vary from the other depending on the instrument you are planning to start your trade with.
After making a trade, you should keep a close check on the open position to keep track of the real-time profits or losses. Always remember that losses can exceed the deposit.
If your trade is not automatically closed out as a result of a stop or take profit order being triggered, close your trade when you are ready.