| Between 2008 and 2009, the world economic bubble | | | | like crude oil, foreign exchange and even financial |
| that was looking so nice and shiny burst, and what a | | | | instruments. |
| mess it was! And it was all tied to financial markets. | | | | As a commodities trader, you will buy a contract on |
| For most people, it's always been a technical and | | | | a given commodity at a given price. Your hope, as |
| foreign area, best left to your stock broker to deal | | | | you are buying the contract is that the price of the |
| with. In fact, all they could understand was that it | | | | commodity will rise. Assume you are speculating on |
| had something to do with banks, mortgages and | | | | the price of corn. If you think the price of will rise, |
| stocks. Nest-eggs disappeared overnight. If we are | | | | you buy a commodities contract on it. If the price |
| to learn from our failures, then this is the best time | | | | goes up, you sell your contract and net a profit. |
| for a re-education when it comes to investment. To | | | | Should you speculate a drop in price, you sell the |
| go back and learn the basics, because whichever | | | | contract and exit to avoid making a loss. |
| way we look at it, there is no other option to putting | | | | Much like any market where the laws of demand and |
| our money than in good investments. Only now, we | | | | supply are allowed to operate freely, there are |
| have to re-orient, re-educate and understand the | | | | always willing buyers and willing sellers. If you want to |
| basics so we can know when to make timely entries | | | | buy, there'll be a willing seller and if you want to sell, |
| and exits. | | | | there'll be a willing buyer. |
| Let's start with commodities trading, an investment | | | | As mentioned earlier, some consider it high risk. But |
| option that is not so common. It is otherwise | | | | remember, the higher the risk the higher the returns. |
| referred to as futures trading, and there is a school | | | | Get yourself a good broker, get yourself in the loop |
| of thought that deems it highly risky, but like with | | | | with information and get good software that can |
| anything else, knowledge is key to whether you win | | | | track trends and give you instant alerts. The only |
| or lose. | | | | other cash you will need is an amount that your |
| A commodities contract is a contract for speculating | | | | broker will hang on to should you make a loss and |
| on the delivery of a commodity at a certain price in | | | | you have to pay. |
| the future. An investor chooses a commodity, | | | | The best thing you can do for yourself now is to |
| speculates on a price that they predict it will sell at | | | | diversify investment options. And the best way to |
| on some future date, and based on their speculation, | | | | do this is to be as knowledgeable as possible on |
| they will either make a profit or a loss. | | | | whatever options you decide to take. Like the great |
| Commodities are traditionally agricultural products and | | | | investor George Soros likes to say, it's all about |
| they come in bulk - wheat, corn, rice, or even fruit. | | | | knowing about when to make and entry and when |
| The ideal is that they be commodities that are | | | | to make an exit. You can invest literally in anything; |
| consumed in bulk. In modern day, commodities | | | | just have your facts and trends at hand. |
| trading has expanded and has you'll find commodities | | | | |