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Tuesday, June 10, 2008

Commodity Futures for Beginner Traders

There are many commodity futures markets with a variety of products are available to trade. But all of these markets and products are not suitable for beginner traders. Beginner traders should choose markets/products which satisfy certain requirements as follows.
  1. Markets must be liquid.
  2. Markets should show good trendy moves.
Traders should analyze the historical trends and behavior of the markets before taking a decision. It is a good practice to diversify the markets and the products one trades. Here is a list of most liquid or tradable commodity futures available, which are good for beginners.
  1. Currency futures – Swiss Franc, Japanese Yen, Germen Mark and British Pound
  2. Energy futures – Crude oil, natural gas and heating oil.
  3. Food commodity futures – Coffee, sugar and orange.
  4. Metal commodities – Gold, silver and copper.
  5. Agricultural commodities – Oats, Corn, Cotton and Soybeans.
  6. Interest rate futures – T-bonds and Eurodollars for short-term and long-term trading respectively.
Remember there is no guarantee that the liquidity and profitability of a market/product remains the same over the time. Also before trading any market or product the trader must consider many things like his account size, risk tolerance, familiarity with the underlying commodity or market or industry, other fees included, ultimate goal – whether to own the underlying commodity or not, trading strategies, etc.

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posted by NobleTrading at 7:43 AM

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