Commodities SEO 2

Leverage or margin trading allows you to fund a percentage of the contract’s total value.

Suppose you plan to buy a futures contract worth $100,000, and the broker’s margin rate is 10%. The broker will require you to deposit 10% or $10,000 to buy the contract ($100,000 x 10% = $10,000).

You can become a commodity trader by opening an account with a trading broker. A demo account can help you practise trading strategies before risking real money.

You can also become a commodity trader by joining commodity exchanges that trade futures, swaps, or options.

Trading derivatives involves buying and selling financial contracts like futures, swaps, and options. Derivatives let you profit from price movements without owning the underlying asset.

Physical commodity trading is buying physical commodities from sellers based on spot prices (the asset’s current market price) and having those assets delivered.

For example, you visit a website selling precious metals and purchase gold bars. After confirming the order, the seller ships the items to your address. 

Another example of physical commodity trading is when oil companies buy and store oil barrels and sell them to customers.

Our customer support consists of vastly knowledgeable staff available 24 hours daily, five days weekly, through telephone, email, live chat, or a support ticket.

Taurex’s Standard and Pro accounts are commission-free. For the VIP account, Taurex charges up to $2 per side.

A “per side” cost is the transaction fee for opening a position in a market.

Precious metals typically have a trade size of 0.10 lots. One standard lot equals 100 ounces (oz). 

If you trade 0.20 lots of gold, you are trading 20oz of this metal (100oz x 0.20 lots = 20oz).

Taurex offers crude oil trading during these hours:

• Brent oil (UKOIL): 11:30 AM to 6:55 PM
• WTI oil (USOIL): 1:00 AM to 11:59 PM

The precious metals market opens from 1:00 AM (UTC+2) on Monday to 12:00 AM on Friday (UTC+2).

Trading commodities online is possible if you have an account with a licensed broker. After funding your account, you can begin trading.

The time to trade commodities depends on your broker and the exchange where those assets are sold.

Some of the commodities Taurex offers have the following trading hours:

To trade commodities online, you must sign up with a licensed online broker and fund your account to buy and sell those assets through derivatives.

Many commodities have a consistent or global demand. Some asset classes perform better over time due to limited supply. 

With these characteristics in mind, beginner traders can consider trading crude oil, gold, and base metals.

Taurex allows you to benefit from the following features:

• High-speed order execution
• Tight spreads
• Secure trading
• Seamless trading experience on MetaTrader 5
• 24/5 expert support worldwide

Taurex is also regulated by the Financial Conduct Authority (FCA) in the United Kingdom

During stock market downturns, investing in commodities can help you control potential losses. 

You can consider trading in commodities if you already have enough trading experience. The commodities market can have high price volatility and the potential for significant losses.

Because commodity trading is high-risk, you should consider allocating only a small part of your portfolio to commodities.

Taurex offers trading opportunities through MetaTrader 5, one of the world’s most trusted trading platforms. You can access MetaTrader 5 on your desktop or mobile device, and benefit from its advanced features and tools. 

For example, with MetaTrader 5’s intuitive interface, you can customise charting and trading indicators and engage in automated trading.

Taurex provides trading platforms and tools to trade more than 1,500 financial instruments across commodities, shares, indices, forex and metals and enhance your trading experience.

Certain currencies can function as commodity currencies. For example, an oil price increase can lead to a weaker U.S. dollar. Alternatively, a weakening U.S. dollar can cause oil prices to increase.

If your portfolio consists of stocks or forex, consider diversifying by investing in commodities. Diversification can help minimise or offset your losses when your other assets decrease in value.

When you speculate on price movements, you’re risking your capital. 

When you use leverage, you borrow money to fund a trade. Thus, while leverage can help increase your returns, it can also increase your risk, especially when your trade doesn’t go as planned. 

Consider implementing the following risk management strategies:

• Stop-loss orders: Setting a stop-loss order helps minimise your losses on a trade to an amount you can tolerate.
• Trailing stops: Implementing trailing stops involves setting up a moving stop-loss order that follows the price movement. Instead of placing a specific limit price, you can set the trailing stop several points away from the current price.

Risk vs reward ratio: Specifying this ratio helps you determine what you can gain for each unit of currency invested. A 1-to-2 ratio means that for every $1 you risk, you can earn $2.

Developing your market analysis skills can help you succeed in commodity trading. Two ways to assess the market are fundamental and technical analysis.

Fundamental analysis involves monitoring and evaluating macroeconomic factors like a country’s economic health, geopolitics, and updates on specific industries like oil, mining, and agriculture.

Meanwhile, technical analysis involves observing price trends and patterns seen on charts to identify trading opportunities.

Before opening a retail investor account with a broker and trading, consider reading books or watching videos and podcasts on trading commodities.

Some brokers offer educational resources and video tutorials on their websites to help you trade commodities and become familiar with capital markets.

Taurex provides resources and tools, such as market research reports, educational materials, and expert insights, to help you analyze commodity markets and trade with confidence.

Improving your trading involves performing actions that help increase your profitability and reduce your risk exposure. The sections below discuss the ways you can improve your commodity trading.

Margin rates can vary depending on your broker of choice. As of November 2023, Taurex offers the following commodity margin rates:

• Brent oil (UKOIL): 0.5%
• WTI oil (USOIL): 0.5%
• Natural gas (XNGUSD): 1%
• Coffee: 1%
• Cocoa: 1%
• Cotton: 1%
• Gasoil: 5%
• Sugar: 1%
• Copper (XCUUSD): 1%
• Gold (XAUUSD): 0.2%
• Silver (XAGUSD): 0.5%
• Palladium (XPDUSD): 1%
• Platinum (XPTUSD): 1%