Commodity futures trading is based on a raw product which has not been manufactured or refined. Commodity futures trading often involves products, whether that be animals, such as goats or pigs; or grain, such as wheat or corn. Commodity futures are traded on the world commodity market under strict regulations.
The range of commodities that are traded today is broad. Commodity trading is classified broadly as hard commodities and soft commodities: hard commodities are products that are mined, such as oil or gold, while soft commodities are products that are grown, such as wheat and coffee. One category for commodity trading is agricultural commodities, which can include grains, pulses, livestock and other cultivated materials. Examples include corn, rubber, cocoa, sugar, soybeans and feeder cattle. Energy commodities, mostly based around gas and petrochemicals, include Brent Crude oil, heating oil, and natural gas. Metal commodities can encompass both precious metals and base metals: examples are copper, aluminum, silver, and zinc.
To develop a profitable commodity trading strategy requires an understanding the ins and outs of the markets you decide to trade. When it comes to commodities, there are so many important factors to consider. First, remember that futures and options markets are derivatives of the actual market for the physical delivery of the commodity in question. Therefore, it is important to learn all you can about the underlying supply and demand fundamentals for that asset. There is a wealth of information available for free from the commodity exchanges as well as from a variety of trade organizations and government agencies.
Subscribers of the Art of Chart can benefit from daily market updates, trading trends, and additional information related to commodity futures trading. Given the enormous potential of trading commodity futures, our educational membership packages may be able to provide day and swing traders with more insight on where they see the market going. In conjunction with their own trading strategies, our videos, tutorials, and charts enable day and swing traders to make informed decisions to hopefully be on the right side of the commodity futures trade