As an investor the large percentage of your investing will take place within a standard stocks and shares environment. However, if you think that such is the be all and end all of investing you would be sorely mistaken. Commodities (such as oil, gold, and silver) present a different investment avenue entirely. If you have been trading commodities (or are about to) then you’ll know that they need to be traded in a different way to normal stocks and shares. The following takes a look at the commodities market and offers several key tips that can help you achieve commodity trading success.
Tip 1 – Monitor economic movements
It doesn’t matter the type of commodity you choose to invest in, you can almost be sure that it’ll be influenced by global economic stability (or lack thereof). Those wanting to find success when buying and selling commodities need to stay one step ahead of economic movements and analyse such with great scrutiny.
Tip 2 – Keep an eye on the news
Questions will be raised over its quality, with the written press being regularly put under the microscope. But if you want to get involved in commodities trading and actually make money, you need to pay attention to it. It may not give you all the details of what you’re after, but it will give you the brisk of what is driving global business on that day.
Tip 3 – Step-up to advanced trading techniques
You can argue that when it comes to commodities trading, it’s not what you trade its how you trade it. If you’ve worked hard and put some experience behind you, don’t hesitate to take the next step and adopt advanced trading techniques like fundamental analysis. There is no place for fear when it comes to trading commodities, so don’t hesitate to raise your game to the next level.
Tip 4 – Embrace advanced trading strategies
Much like advanced trading techniques, in order to push on and find success it is advised that you embrace advanced trading strategies too. Look up the likes of “risk reversal strategy” and “knock-on strategy” to see if they are suitable for your current trading position. Who knows, if you implement these strategies you might find that commodities trading becomes easier and more profitable.
Tip 5 – Link assets together
Learning to listen to the market is one of the leading tips anyone can give some looking for commodities trading success. Reason being that if you think laterally you can identify the underlying relationships between assets you can make better decisions. For example, if you trade oil and see that BP are having sourcing issues, by linking those two investments you can start to discover advanced news that can keep you ahead of the curve.
There are no guarantees when it comes to commodities trading, but by following all of the above tips and you may find success sooner rather than later.
Spreadbetting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.
Alexander Bowring is a London based writer and a Southampton Solent University Screenwriting graduate. He has worked alongside TV personality and Telegraph feature writer Alison Cork, whilst also having produced content for ITV, This Morning, Canvas8, Who’s Jack, Alison at Home, and Bonallack & Bishop Solicitors. Alexander also has a keen interest in investments.