What is Riskier the Stock Markets Or Commodity Trading?

the question is always what is risky, stock or commodity trading? First, both are, but I have a problem with the initial response when they hear that I am trading advisor commodity or commodities involved in trading is that it is risky. How many people have forgotten how to obey blindly CNBC or Bloomberg during the tech bubble and lost their retirement money from Enron, Worldcom and a myriad of other shares. It seems people want to watch Jim Cramer, weather for crops, which Bernanke will say that they think they will find their way to investment success. Even now, talk of green shoots. People want to predict. This is what makes the risk. People who are trying to gather all the information and its analysis, regardless of the position size ... where is the exit ... etc. .. totally increases their risk.

Successful trend followers on the other hand focus solely on risk. Trend followers can be involved in commodity trading, stock markets, currencies, bonds and individual stocks. Until now, if you read my posts you realize that the prediction is meaningless. Nobody knows the future. The successful commodity trading advisors and trend followers know that the only thing that will get them in the store is some type of price move to the upside or downside. Not what Bernanke might say ... Or what OPEC can do. Cold facts ... Price trends !.

goal of a successful commodity trading advisor, or a follower of the trend to jump on board, that the "potential" move. Again, no prediction, and more .. successful trend followers know that most trades will not work. The successful commodity trading advisor or trend follower does not care. He does not put any mental baggage to any trgovinu.Trgovina or worked or not. The successful commodity trading advisor or trend follower does not need to bet BIG .. but a small percentage of his / her account (less than 1%) to see if any trades for or not.

The real key to successful wealth building, investing the stock market or even commodity trading is a combination of money over a long period of time. In order to successfully building wealth, the secret is to understand the risk in any approach (stock, bonds or even Forex) and look for risk management in a consistent and valuable basis. What is this foundation?
The risk per trade
The risk per sector
Open trade risk

I do not think that something is without risk. All types of financial products (even cash) risks. Accept the risk, to define the risks and separate yourself from your feelings. As I started this post, most people want to be told what to do, that's why they watch CNBC and the like. More so, what I saw most of the investing public does not have the discipline to follow even the best thought out financial plan with a strong risk management and money management. If you want a combination of money over a long period of time, consider the allocation for professional money managers, commodity trading advisor that trades in a way that you can understand and follow. Except you want to make sure you have the liquidity (you can take your money out at least within 1 month) and have transparency. In the end, do not invest more than 5% of their net worth in any idea. Remember all the risk. Even the way the U.S. dollar goes just keeps dollars in your bank account may increase the risk. Revolutionize the look of risk management.

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12 Features Of Online Commodity Trading And Futures Trading

Online commodity trading and futures trading are the words of today. But this is not scene uvijek.Izvorni marketers belonged 1800s. They are farmers who wanted to sell what they have grown on agricultural land. Crops to be harvested, and products brought to market for sale.

They do not have educational services available in modern times, they were unable to assess whether the goods they brought were insufficient or smaller quantities. If the amount was not enough for consumers, farmers have lost the opportunity to earn more money. If the amount of surplus products, such as trimming products, meat and dairy products should be carted back home. Eventually, they would rot and spoil. Either way, there is a surplus or deficit, farmers suffered losses.

Sometimes, some products will be available out of season, but not in such large quantities as it would be if available during the regular season. Of course, the goods of this were sold at high prices.

Finally, many heads got together to come up with the idea of ​​a common or central market. Farmers would bring their harvest here on certain days and sell them ih.Kupac could be taken as immediate delivery (today, this is called pay on the spot), or order them as future deliveries (known today as the futures market ).

a result of this effort is a set standard prices for various goods (in and out of season), and gives hints for farmers on the supply and demand. Thus, the decay products is brought to a halt and farmers no longer form a huge loss. It can be seen as a stepping stone for online commodity trading and futures trading that exists today!

above all that has happened between now and then, looking at the online commodity trading now as there is, what are the considerations to keep in mind if someone wants to go for it?

(1) in the first place spot on online commodity trading is intelligent to understand how markets work (physical or online), and how contracts are made for future exchanges.

(2) If you are involved in online commodity trading and futures trading, there must be a producer of goods and consumer goods of the same. One seller, a second customer in the contract.

(3) The shop is now gone from agricultural and food products much more, including financial instruments. Thus, the trader has a lot of business opportunities.

(4) Online commodity trading is different from futures trading in commodities that can be delivered fizički.Potvrdu issued to the customer, allowing him / her to go to the warehouse and pick up the product.

(5) The second type of contract that came into being is a futures contract. It has evolved from forward contracts, which is nothing but the buyer signing the contract for payment and purchase goods on a particular day some time in the future (generally, the deadline is three months from the date set in the contract). The goods will be delivered on the date in the future .

(6) Under the agreement, the buyer gets the goods has not dostupna.Cijena is, of course, decided in advance. Sometimes, goods are priced according to future values​​,. Stock market indices act as decision-makers to set the value of certain goods

(7) Another aspect of futures trading is that neither the seller is the actual supplier of the goods, the buyer or the beneficial owner of goods purchased. Only if the person is personally involved with the actual goods were purchased, will he / she provide and use it.

(8) Forward contracts are beneficial to both sellers and buyers, because the risks are minimized, plus parties get a chance to indulge in a little speculation. There is no exchange of physical goods.

(9) Different strategies are available for spot traders, as well as future traders to use the rising and falling prices of their best advantage. These strategies can be classified as -. Expansion, going short and going long

(10) for the same commodity, the prices listed on two different contracts can not be isti.Poduzetnik trying to use the price difference to his benefit. This is called the spread.

(11) goes briefly shows that the trader was wondering if he / she can get profit from falling prices. The contract, therefore, is sold at high prices now, to be repurchased at a lower rate in the future.

(12) last strategy for online commodity trading and futures trading going long. Here, an investor and speculator to sign an agreement in which the buyer is willing to buy the product at pre-set price. He / she predicts that prices will grow in the future be, yielding additional revenue.

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Commodity Trading Blunders II, PART 3 - My Early Days As A Novice Trader

Several years later, in the late '80s, I remember even as a mistake. I was using a new commodity cycle program I designed. In fact, it is the same one I used today to clients titled "Timeline". I feel comfortable with it. That's half the battle. In any case, I bought four of coffee futures contracts to about 58 cents. I was looking for an explosive cycle time move up. Sure enough, the coffee market began to creep over a week or so. After a few weeks he started to run and hit the coffee about 70 cents. This is a great result for me, something like $ 18,000. But this is not the end of the story.

Here is how an error occurred: in the morning I left, I had a resting GTC trailing stop at 68 sold four coffee futures closed out. I just had gotten one of those nifty hand-held citation devices with FM band. Remember that? It was a big mistake. Watching that thing just ruined my long-term perspective. But this time it's different. Somehow, I recognized the top and called the trading desk to sell everything on the market. I almost grabbed the top right. It was just luck. So I took the car thinking I was out of the market $ 18K points. Time for a celebration! I was so smart! Not so fast, Tom.

When I got home I heard a message on the answering machine from the trading desk. I called them and the officer said I forgot to cancel a GTC sell stop at 68 to sell four futures contracts. I sheepishly asked him what machine closed in. He said, "limit down" I was still $ 4,000!

But again, not so fast, Tom.Trgovanja Manager (with a hoarse, gruff voice, of course) got on the phone and said to be called before the market closed to see if I wanted to keep the shop. He said because he could not reach me, it covers four contracts without me. Then he barked, "This will be at the expense of an error!" He said it with such authority, I thought that was it. So it worked, I told myself. I was so pumped up to just create a $ 18,000 how could I be greedy and demand an additional $ 4,000 as well?

but ... What would happen if the coffee futures market went limit-up instead? Do you think that trading manager would require the loss goes to "error account" then? Not a chance. I would have eaten that as sure as day. In hindsight, I could have told him that my intention is to stop and reverse, and actually still be in the coffee market of the future and short. What is on the right are no signed contract management approval to assassinate me?

If it happened today it would be a different story. I'd probably offer to share it, as such a nice guy. [smile] But it was a long time ago and I did not know any better. Probably laughed and shook his head afterwards. As Robert Redford said at the end of the Sting ... "I would just like to blow anyway." Knowledge is learned is more valuable than money. Gann said something like: "Once you have knowledge, it is easy to make money in commodities." I guess I can rationalize it all.

So there you have it ... two stories to make mistakes. One we lost $ 1500, and the other me $ 4000 - well, I made $ 4,000 brokerage firms, I would say. It taught me the importance of having a novice commodity futures trader paired with an experienced, mentoring broker. It is so important to have someone at the other end who knows your situation and can flag errors before they get out of control. In these two cases, there is the potential to wipe out many years discount commissions savings.

If you are new to the commodity futures and options trading game, consider going slow for a while and work with someone you trust. Once you get the basics down, you can ramp with confidence. I know some experienced commodity futures traders will only work with a full-service commodity broker. There are a lot of traders like this out there. They know the risk of errors and what you can do to make your ego and your bottom line.

good trading!

There is a substantial risk of loss trading futures and options and May not be suitable for all investors. Only risk capital should be used.

READ MORE - Commodity Trading Blunders II, PART 3 - My Early Days As A Novice Trader

Tips for Commodity Trading

Commodity trading is a reputable business that can be involved in. work or can be run from the comfort of your home, or simply the office. However, in most cases, it is usually self-employed business and can be executed as a part time business. However, to succeed in business, to do more than just sales. This is a job like any other just easer to manage. There are several things you can do to rip the best of him.

The first thing you should do is understand the niche. There are many trade goods that can be used. The difference is that some are more profitable than others, and varying levels of complexity. To rip the best out of business, to understand the pros and cons of trade. This can be done through continued research, as well as seeking professional guidance from experts. Make it a habit to yearn to learn more every day.

real investment must be done. When you start a business, do not put all its resources. It is advised that you first understand the market before your full commitment. Put into a manageable resource that could be felt in the event of loss. When the business up and running, give him everything you can. Time and money must be allocated to commodity trading. This is a job, and the more it will give more back.

Finally, in order to succeed in trading commodities, you will need to separate your personal needs from operations. Most people fail because mixing the two. What is the business belongs exclusively njemu.Samo you are the owner of the operating profit was made ​​and nothing more. Understanding this will help performance.

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Commodity Trading - Trading Oil

Traditionally, commodity trading in petroleum products is a place where only the elite, super traders dared to venture. With barrels holding 42 gallons each, and the contract at least 1,000 barrels, delivering oil was a task best left to professionals. However, the petroleum trading landscape has undergone some dramatic changes over recent years.

For decades, oil prices were stable, then the mid-1970s the industry exploded. Technological advances and the political landscape contributed to insecurity, lack of stability, shortages and price increases. Nearly 30 years later, prices skyrocket to more than $ 70 per barrel, and forecasters predict that in the mid to late 2007, when it expects to see a slight decline for the next two years.

, however, there is no truth when it comes to oil prices, but there are few large-scale factors that can reduce risk by offering a relatively accurate projections.

As demands continue to rise, other countries like India and China are also experiencing technological and cultural promjena.Trend seems to be on the rise with no signs of slowing, reversing or reversible.

India is riding on the coattails of their western neighbors in relation to technology and business methods and is emerging in the 21st century. It brings with it increased demand for energy, mainly oil-based, so the houses, commercial buildings and manufacturing plants can be built. Rural economy is getting a facelift in many areas such as this movement carries with it such an exponential growth which, in turn, increases demand.

The demand is not just a piece of the puzzle, though. As India's purchasing power to obtain those goods increases, the growth of other shows as well. India has a wealth of cheap, educated workforce that is required for the outsourcing of information technology, electronics manufacturing, communications and more. It has continued to grow and expand for at least another decade. One indicator of this growth, the rapid growth of broadband throughout India.

China's technological mega country with the highest use of mobile phones in the world, and the other for the largest internet population. Energy is in demand around the world, but China is expected to grow steadily for at least the next decade.

Although China is considered to be a communist state, the social forces that cause performance to decline. As yet, it is impossible to predict whether repression will increase or decrease, but it is inevitable that information flow will be stopped and will reach people one way or another, despite any government attempts to block it.

of social change in China, it seems somewhat proportional increase in business there. Demand for energy is growing and new infrastructure, buildings and manufacturing plants are cropping up on a consistent basis. These companies and the growth of energy demand, mainly oil-based energy.

The demand continues to grow, but at the same cost falling off or blocked. Temporary loss, as the refineries, which occur as a result of a disaster can be recovered within a few months to a year. However, North Sea oil production, which saw its peak in 2000, has seen a gradual decline. By the time that the political change to come around, releasing massive reserves that are known to be in Alaska, is not expected to be sources of new discoveries that will be used. Not a lot of new sources are expected to achieve over the world.

As the technology is tilted towards the development of new forms of energy, there is no expectation that any of these resources will appear in the market over a period of ten years. Fuel cell powered cars, which only account for 7% of gasoline use, is not expected to look for quite a few years.

The current political pressures in the United States hopes to prevent any changes to the current situation. Disposal is one of the main problems at the political forefront that shows no promise of a solution anytime soon. However, there are new forms of oil trading mechanisms are developed to the average investor to participate in a market that was at one time exclusive.

For example, e-mini futures on the CME allow trading contracts that are half the traditional size of 500 barrels. Futures and options on NYMEX remains of 1,000 barrel size, but they require less than 5% of the investment. These moves place these trades in the understanding of all types of investors. Commodities pools and funds, such as those offered by Pimco and Oppenheimer allow investing smaller amounts that are increasing their popularity.

This time, the market can offer even the average investor a favorable risk and reward balance in the oil commodity trading.

READ MORE - Commodity Trading - Trading Oil

How Commodity Trading Differs from Stock Trading

There are major differences between trading stocks and trading
the future. While stories of fortunes are made or lost overnight on the futures markets largely untrue, the futures trader, if using a sound trading system, you can usually earn more money in the futures market and make it much faster. However, if the trading system is not sound the trader can have greater losses.

This is because futures contracts are highly affected. margins
(deposit required) on futures contracts are much less than for stocks, as low as 3% on some futures contracts compared with up to 50% for stocks. As well, futures investors are not charged interest on the difference between the margin and the full contract value.

margins for futures contracts act more like a bond or good faith deposit, while the margin for stocks is more than a loan. Although the margin on futures contracts is very small, she rides the full value of the initial contract as the contract rises or falls, which are affected earlier.

Commission charged futures brokerages are normally much less than brokerage commissions for other investments.

futures markets use the open outcry (auction type) method
trade insurance is very open, honest and efficient markets. Plus, it's much harder to trade on inside information as to the many variables affecting the markets. Also, futures markets are highly liquid. Transactions can be completed quickly, which reduces the risk of adverse market moves

If you own shares you own a business. This allows you to share in company profits, and losses through dividends, and increases or decreases in stock value. It also gives you certain rights to vote with the company. However, the company may go bankrupt, leaving you holding worthless stock.

When you buy and sell futures are just concluding a contract, not really own anything. What you have is a contract for the purchase of goods or financial instrument (wheat or Treasury Bonds for example) at a specified price on a certain date in the future.

person on the other side of the transaction agreed to sell a commodity or financial instrument at that specified price by a certain date. If you sell a futures contract before that date, you shift your position, and any gain or loss on the trade.

stock you bought 3 years ago is the same stocks you can buy today. Futures, on the other hand, are very limited life. They are traded in a regular series of contract months, called the delivery month.

futures contract expiration date, after which no further trading for that month may be održati.Ugovor September corn are traded last year's September corn contract you are trading this year. In fact in September of last year's corn contract no longer exists.

Many futures contract months of the same commodity trade simultaneously on the market, sometimes even years in the future. The current contract is called the front month and the other agreements referred to previous months. They called back months even for future months.

For example, corn trades for the month of January, March, May, July, September, November and December. Suppose today's date is 4 August 2000. The current contract month for corn will be in September 2000 and is called the front mjesec.Mjeseca November and December 2000, January 2001, March 2001, May 2001 July 2001 they returned months, although they are in the future, even flow in the next year .
(This May sound confusing, but not really ...)

All of these months are traded at the same time, although the majority of trading activity takes place in the months ahead.

When the current month contract expires next month becomes the front month and so on.

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Online Commodity Trading: What Is It

Commodity trading is a type of retailing where the contract that allows you to purchase certain securities such as stocks or currencies at a specified price. With the help of technology, everyone can benefit from this low risk, high return on the market. With on-line commodity trading, it is possible to buy or sell a commodity at any time of day. For beginners, many online websites commodity brokers offer demo accounts or paths that will help investors practice their trading skills. These accounts also help increase the understanding of real-time commodity market.

Online commodity brokers are organizations that help individuals and institutional investors for setting up their accounts to trade goods on the Internet. Commodity brokers usually offer their services online, while others opt for business over the phone only.

On-line commodity trading, there is no need to personally communicate with the broker. However, they do not have help lines that can be reached in case of any query. Online commodity trading offers investors a quick and inexpensive way to do currency trading from the comfort of their homes or offices, day and night. All specifications such as the prices stay the same, except for the fact that these trades done from the online account.

When you are opting for online commodity trading, traders must choose their online brokerage company carefully. The main factors to consider when choosing an online broker feedback from other traders on the broker if the broker has the assurance to customers? funds, execution of orders, margin requirement, commissions charged, trading platform and the size calculated nude.Pravilno understanding of accounts is necessary to avoid large losses.

Online commodity trading allows traders to stay in touch with all the speculation and market information. It also allows retailers to install a computerized trading system to automate the trading of goods, which in turn increases their chances for success.

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