HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%
XM information and reviews
XM
82%

What Are Commodities and How to Trade Them?


Since the beginning of human civilization, commodities have been a vital investment asset. In short, a commodity is a basic good or raw material that people buy and sell. Usually, commodities are the building blocks for more complex goods and services.

Commodity trading covers the buying and selling of a broad range of instruments, including oil and gas, metals, and other primary processing products like coffee, corn, and sugar. For investors, commodities are an important way to diversify their trading portfolios.

Commodities are risky investments because their market is impacted by circumstances impossible to predict – unusual weather patterns, epidemics, natural and human-made disasters. If you want to trade commodities, you always need to keep up to date with the latest news.

What kinds of commodities exist?


There are four main categories of commodities on the market:

Commodities also split into hard and soft ones. Hard commodities are natural resources that must be mined or extracted (gold, oil, etc.), while soft commodities are agricultural products or livestock (wheat, sugar, hides, etc.)

How to trade commodities?


Trading commodities doesn't quite differ from trading currency pairs. But let's have a look at the step-by-step instruction on how to do it:

Can you make money trading commodities?


Commodity trading has its advantages and disadvantages. The main advantage of commodities is that their performance is not strictly dependent on the equity and bond markets. This reduces the overall risk for investors who want to build a diversified portfolio.

Commodity markets usually are very liquid, meaning you can quickly enter and exit them. Although it’s not a get-rich-quick scheme, commodities can potentially give huge profits if traded carefully and smartly.

The disadvantages of commodity trading are that markets are volatile, which means risk is higher, especially for new and non-experienced investors. So, be careful and get ready for any outcome – you can win big or lose big.

At FBS, you can trade precious metals at both Standard and Cent accounts. If you are still unsure whether you want to add commodities into your trading portfolio, try our demo accounts before entering the real market.

#source


RELATED

How To Invest in NFTs: NFT Investing for Beginners

If you have been paying attention to the crypto markets for any length of time, you have likely come across the term "NFT", especially as there have been headlines of these...

Regulators Affecting the US Dollar

The value of the US Dollar can be affected by a number of different factors, such as the Central Regulator, also known as The Federal Reserve. The Central Bank...

Demystifying the 60/40 Rule in Forex Trading: A Comprehensive Guide to Tax Implications

Forex trading, also known as foreign exchange trading, is a dynamic market where currencies are bought and sold globally. The primary aim of forex traders is to make profitable trades...

Fundamental Analysis: A Beginner's Guide

Different methods are employed by investors and traders to anticipate the fluctuations in the prices of stocks, currencies, and other financial instruments...

10 Reason to Trade Forex

Foreign exchange, or more colloquially known as forex or FX, is the buying and selling of currencies to make profits based on the changed currencies' values...

IronFX: Leverage in Forex. Complete Guide

Leverage is simply borrowed funds that traders use to trade. In other words, it refers to the ability that traders have when opening an account with a forex broker...

InvestLite: Short term investments. What are they?

Short term investments are very popular financial instruments today, which attract both novice and advanced investors. The special appeal of short-term investments...

Money Management: One of the Keys to Success

Online trading of currencies (Forex), cryptocurrencies, and CFD deals with other financial assets (stocks, gold, oil, etc.) offer unique opportunities...

Navigating the Transition from a Full-Time Job to Forex Trading

Embarking on a journey from a traditional full-time job to the world of forex trading is a path increasingly chosen by many. This decision, while potentially lucrative...

Stop Loss: the lifeline of every trader

Stop Loss (SL) is one of the most important concepts in the FX market. Every trader has the opportunity to benefit from this trading tool.

Crypto and NFTs: The New Age of Art

Crypto and NFT art can be an even more promising pair for the future of art as a whole. Fiat currencies and art have both been around for a long time. We are equally...

Understanding Micro Lots and the Importance of Lot Sizes in Forex Trading

Grasping the concept of lot sizes in forex trading is essential for every trader stepping into the market. This article will delve into the details of what a lot is, the various lot sizes available...

Understanding Market Stress: Navigating Economic Turbulence

Market stress is a term that has been increasingly prevalent in financial dialogues, reflecting moments of significant tension and disruption in market functionality...

What is Forex VPS and What Is It For

The trading conditions in which modern traders work have changed dramatically over the past 10-15 years. Today, a trader's computer and trading terminal are able to work miracles...

What is Forex and how to trade on it?

The term Forex - also known as foreign currency trading, currency exchange or by its acronym FX - refers to Foreign Exchange or to transactions between currencies...

What Is Stop Loss and Take Profit?

Stop-Loss is a pending order used by traders to minimize risks. When analyzing the market, traders may misinterpret the asset price movement and incur losses...

Proactive Trader: a Team Player or a Loner?

When you start trading, many questions appear in your head. Today we concentrate only on ones that consider the effectiveness of performing on Forex...

Frequently asked questions about Cryptocurrency CFDs

Bitcoin is a digital currency that was created in 2009. Its creators are unknown, as they disguised themselves using the alias of Satoshi Nakamoto. When Bitcoins are bought or sold...

Everything You Need to Know About Cryptocurrencies

The concept of money as we know it has evolved in recent years from purely physical money to a combination of the physical; digital representations of physical money...

How to Become a Professional Trader?

After learning more about the world of trading and getting real money from your trades, you might start thinking about becoming a professional trader. But what makes a professional trader?

FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%
FXNovus information and reviews
FXNovus
75%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.