Day Trading Futures is a distinguished kind of trading than others in the financial market. Successful commodity traders already know that trading commodities are totally different from trading stocks. Every investment and trading instrument is unique and different, but day-future trading is a game worth learning and playing. The profits that you generate from trading these are also unique.
Several benefits are adjoined with commodity trading. Let us understand these advantages in detail.
Advantages of commodity trading
Protection against inflation
The prices of the commodities increase as the demand for goods and services rises. Raw material prices increase and thus, the overall costing of the commodity. In an inflationary environment, the interest rates rise too. This phase increases the cost of borrowing while reducing the company’s net income. This decline in the income of the company affects the profits of the shareholders.
During the inflationary environment, the stock prices fall and the prices of the commodities rise. Hence, the investors get a huge capital from these commodity futures.
Protected against geopolitical events
Conflicts, riots, and wars are a part of geopolitical events that can disrupt the supply chain leading to resource scarcity. In such a situation, it is difficult to procure and transport any commonalities or raw materials, causing the prices to rise subsequently. During such an event in the market, the stock prices fall drastically.
Commodities have a low correlation with stocks. As they are basically the raw materials that are required to make finished goods, a slight rise in their prices causes a high rise in the cost of production. This reduces the profits of the shareholders as the earnings per share are reduced. Due to inflation the value of future cash flow paid by the stocks declines. Thus, the prices of stocks drop whereas the commodities perform better in this inflated market situation. For example, a rise in the price of oils means the cost of owning a car will rise too.
Commodity trading is now done online making every market participant access the resources. The price determination is totally dependent on the supply and demand, eliminating the risks of manipulation. During the entire time of trade buyers and sellers remain anonymous which makes commodity price discovery entirely transparent.
Now that you’re aware of the many advantages of day trading futures, you must prepare yourself for commodities trading training. The learning period for trading futures is different from training for stocks. An individual can learn the basics of commodity trading within a couple of months. However, it can take a lifetime to master trading skills. With a set timetable and excellent sources of commodities trading training, you can monitor the progress.
Let’s see how you understand and execute this.
Learning Period for Commodity Trading
The first year is crucial for any amateur commodity futures trader. New commodity traders try to make quick profits, but this short-term orientation can cause trouble in the long run. Even people who trade in commodities lose money. Thus, the first year should be about learning and getting commodities trading training. Achieving a break-even at the end of the year should be considered a victory.
It usually takes three years to consistently earn profits. Traders must learn and practice a lot of technical and fundamental knowledge to achieve this level of competency. Taking up commodities trading training from already successful traders at Commodity University gives you a better learning curve which would be shorter too. Read as many commodity trading books as you can, the course materials, and trade slowly in the beginning.
Learn The Secrets Of Long-Term Success
Learn the basics of the commodities markets from successful commodity traders at Commodity University. You will learn how to face new challenges every day and thrive even under great pressure. Apart from just trading and investing, you need to be an economist, a political analyst, and a risk manager.
Get started with day trading futures.
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