Trading commodities online appeals to many for a number of reasons. The benefit is that you virtually have everything at your fingertips when you log in to your trading account; most online brokers will have real time quotes, charts, news, technical analysis and research available for their clients. This has opened the door for many online traders to make more of their own trading decisions and implement trading strategies that once were not available to the average retail trader. The commissions are also much lower.
Getting started has never been simpler. As the commodity market gathers momentum, and interest in the market gains popularity, daily trading volumes are also increasing, which in turn leads to greater potential profits. Here’s how to go about trading commodities online.
- Find a Broker.
The first thing you need to do is choose a commodity broker, most of which offer online trading. You will need to open an account and submit details of your financial information. This is important as commodities are highly leveraged and there is a chance you can lose more money than you invest. Therefore, a broker will want to know your income, net worth and credit worthiness before they decide whether they deem you an acceptable risk and suited to trade commodities, and agree to sign you up. The greater your income, trading experience and credit worthiness, the better chance you have for approval.
- Fund Your Account.
Once your account is approved for trading, you will have to fund it, but before you begin trading real money, it is advisable to have a well-researched trading plan in place. Starting with smaller-sized trades will help you understand the effects that leverage has on your risk capital, and assist you in mastering online commodity trading. You will be able to use technical analysis tools to help you decide on exit and entry points in the commodities markets while implementing minimal risk to your own capital.
- Never Stop Learning.
Before you begin trading, make sure that you are well researched, and even if you are, keep learning. Some online commodity brokers offer online courses and there are many books about commodity trading which explain the various risk management instruments available to reduce your risk when trading commodities.
- Find a Mentor.
Trading can be a daunting practice, especially if you’re new to the commodities markets. Binary options companies, like Banc De Binary, offer traders live assistance. Having someone on hand to help you with your trades can make the difference between trading profitably or losing your investment, so find a mentor you can trust.
- Don’t Over-Trade.
The advent of online trading has accelerated the problem of over trading which has been an issue with commodity traders for decades. If you find yourself placing a flurry of trades and look back at the end of the day wondering what happened, you are over-trading. This can be caused by a number of factors, especially psychological ones. So, be sure to stay calm and collected while trading. You’ll see the results in your successful trades.
Once you master the commodity trading software, become fairly proficient using some technical analysis, and have decided on the level of risk capital and leverage you feel comfortable with, you are ready to make larger investments. Online commodity trading can be highly profitable if you proceed with a reputable broker such as Banc de Binary, who can offer you a flexible medley of services, allowing you to begin slowly and increase your trading level at your own pace as you gain confidence.