A Guide to Commodity Trading Strategies [Video]

Commodities offer diversification for an investor’s portfolio, which reduces exposure to any one financial market and, therefore, is important in helping to manage risk. Traditionally, trading commodities was a more complicated affair and available only to professional traders. However, with advances in technology and, with it, online trading, commodity trading is more accessible than ever before.

In this article, we will explain what commodities are, tell you the different methods of trading available to you, explain how you can construct your own commodity trading strategies and much more!

What Are Commodities?

Commodities are either raw materials or agricultural products which are generally used as the “building blocks” for other goods or services. Therefore, the term commodity covers a vast range of goods, from sugar to crude oil, from coffee beans to gold.

Commodities of the same quality tend to be fungible with each other. In other words, they are interchangeable and of the same value to consumers.

For example, sugar produced in …