TRADING THE BASICS
Commodities trading gives you the opportunity to trade the primary products we use everyday, as well as the minerals, resources and other products that underpin our economy.
This includes agricultural products such as wheat, beef and coffee; energy resources such as crude oil and coal; metals such as iron ore, gold and silver; and even manufactured products such as steel, pharmaceuticals and electronic equipment.
the laws of supply and demand
When you trade commodities you’re making a call on whether you believe the price of something will go up or down, based on the laws of supply and demand.
For instance, you may form the view that a drought will restrict the supply of wheat and force is price up or that discovery of new energy resources will push the price of oil down. You may decide that a bumper crop of coffee is likely to result in an oversupply of beans or that trade sanctions on a country will temporarily affect the world’s supply of its primary resource.
Wherever your research leads you to think prices are headed, commodities trading lets you trade on your view.
Make the most of leverage
One of the most popular and effective ways to trade commodities is through contracts.
The good news is that you can usually enter into contracts with a lot less capital than other assets. Instead, you can use the power of leverage to invest a little up front and borrow the rest of the balance. This lets you free up your capital to make other trades. Of course, the flipside is that if a commodities trade doesn’t go your way, you also have the potential to make a far bigger loss.
You can also trade commodities through devices such as options and CFDs.
Everything you need to make an informed call
Commodities markets move fast. Their value can sometimes double or halve quickly. That means, as a trader you have the potential to make – or lose – a lot of money in a very short space of time.
That’s why we’re with you every step of your commodities trading journey. From the moment you open a demo account through to when you execute your first live trade, we’ll get you up to speed with some simple strategies that will help you to make better decisions.
Beyond that, you’ll have the opportunity to learn more advanced commodities trading techniques from some of the world’s leading commodities traders, both through the First Index Academy and through seminars and workshops at your local First Index branch.
Your commodities trading journey begins by downloading the demo
Getting started on your commodities trading journey begins with downloading the demo. That way you can see how commodities trading works and practise executing your trades before doing it in real life.