Trading Commodities can be very financially rewarding. You can literally make thousands of dollars in a matter of minutes or lose that same amount in the same time span. You have a wide range of investment products to choose from such as agricultural, currency energies, Indexes and metals. It is such a lucrative asset class to trade because the value of one tick movement is worth dollar amounts in comparison to stocks upon which each stock movement is worth just a penny. One tick in the right or wrong direction, depending upon whether you are Long or Short the contract could carry a value of $5, $10 or $12.50 a tick, just to name a few! That adds up to a lot of profit potential if you are able to take advantage of the market’s rally. Here are 3 valuable tips they may help to protect your capital risk and position you to capture large profits in this highly rewarding market.
The first tip is to always trade in conjunction to the size of your account. Do not attempt to carry too many contracts that will magnify your capital risk and cripple your ability to make sound trading decisions. Your top focus should always be capital preservation because without it you cannot trade. Period.
The second tip is to always have a strategic and specific profit and loss plan mapped out before you ever enter into a commodity trade. This will sharpen your ability to manage your money, increase your development of maintaining control of your trading activity and limit exposing your capital to unnecessary depletion that over time can keep your account in the negative.
The third step is to get a quality education that will enable you to trade this highly leveraged market successfully. Read books, find a mentor or online school that can teach you techniques that will provide guidance in this lucrative market that carries an equal amount of loss potential if it is not traded properly. Once you have learned some core commodity trading techniques and mindset principles you will be positioned to make a lot of money in this ever growing market. For more information on how you can learn to make money from trading commodities please visit the link provided in my profile.
Good Luck with your future trading endeavors!