How to Start Commodity Trading Online in Simple Steps

How to Start Commodity Trading Online in Simple Steps

Commodity trading has become a very prevalent term in the investment world, and there are many commodities available today for those looking to increase gains and diversify their portfolios. Trading in commodities allows investors to take advantage of their ever-changing economic cycles. However, commodity trading entails specialized knowledge, carries higher risks, and only brings good returns if managed prudently. 

What is Commodity Trading?

Commodity trading is the process of buying and selling commodities and derivatives on a commodity exchange where traders speculate on future prices of commodities. An investor who anticipates a commodity’s price will rise in the future will buy the prospective contracts, which is called “going long.” Conversely, if the commodity price is expected to decrease, investors will sell the prospective contracts, commonly known as “going short”.

Commodities Trading with AximTrade

Commodity trading has been around for thousands of years, and many investors have been able to profit from it still in the modern day. Gold, Silver, Crude oil, Brent oil, and Natural gas are some examples of commodities available worldwide for trading. Commodity trading is the most widely traded market in the world, with almost 50 major exchanges operating all over the world.  

Crude oil is the most widely traded commodity in the world, which you can trade via a spread betting or CFD trading account.  

It is also possible to trade commodities in physical form by purchasing and holding them. Generally, this is a good option if you are looking to purchase gold or some other precious metal, but it is not appropriate for other commodities. Find out the top crude oil trading tips and strategies for information on how to capitalize on the world’s primary energy source with commodity trading. 

Most Traded Commodities on the Financial Markets

Before the advent of the internet, the majority of commodity trading took place in a physical setting. Price fluctuations in these goods are caused by the impact of supply and demand. In commodity trading, traders can profit from these constant price fluctuations by leveraging them to their advantage.  

Listed below are the most commonly traded commodities on the financial markets.  

  • Agricultural commodities – Mostly agricultural products such as coffee, sugar, soya bean, chana, jeera, rice, rubber, etc. 
  • Metal commodities – Usually industrial metals like copper, aluminum and lead, as well as precious metals like gold and silver. 
  • Energy commodities – Natural gas, crude oil, coal, and other fossil fuels, as well as renewable energy sources like wind and solar power, are all included. 
  • Livestock commodities – These are generally live animals, such as cattle, pigs, sheep, and other types. 

Profitable commodity trading begins with understanding how to choose the best commodities to trade. There are some commodities that trade more actively than others, so at this point, we hope you have a clearer understanding of what commodities are and how they are traded around the world. Let’s learn how to trade it to make a profit online.

Gold Trading Vs Oil Trading

Gold trading is considered a good means of protecting against constant economic changes. For that, it represents a safe haven that provides consistency over time due to its resistance to the swings in valuation, unlike currencies. An investor can invest in gold for a variety of reasons, one of which is to increase the balance of their portfolio. To do this, they can buy gold as a hedge against market risks, such as inflation or political instability. 

Oil is one of the most popular commodities to trade due to its extreme liquidity and global dependence. Oil prices are influenced not just by supply from oil producers, but also by global demand, green initiatives, political situations, and organizations such as OPEC (Organisation of Petroleum Exporting). 

It can be difficult to determine which asset is right for an investor since numerous factors can also affect market performance, such as economic, legislative, and corporate factors. A diversified investment portfolio can help here. Diversifying your investment portfolio is the only way for you to help protect yourself from financial crises and keep your assets growing at the same time.

What is Online Commodity Trading?

Online commodity trading is a process of buying and selling commodities online on a brokerage platform with the aim of generating profits. Trading commodities can be a lucrative way to make money from fluctuating commodity prices. If you buy a commodity, such as gold or crude oil, you can expect its price to increase in the future. Upon reaching the target price, you can sell the commodity to earn a differential profit. However, in order to be able to engage in commodity trading, you have to open a trading account with a brokerage firm. 

In the same way as stock and forex trading, a variety of commodities can also be traded online through certain exchanges. The London Metal Exchange (LME), the Chicago Mercantile Exchange (CME), the New York Mercantile Exchange (NYMEX), and the Intercontinental Exchange (ICE) make up four of the world’s largest commodity exchanges in existence. 

Who is a commodity trading broker?

Brokers are an essential part of the process of facilitating commodity trading; whether the trades are executed online or over the phone, trading cannot take place without them. Commodity brokers are typically brokerage firms or intermediate who place trades in commodities for their clients as a service. They might use a trading platform that places and executes trades electronically. Brokers are essential to exchanges in order for them to generate revenue. Each broker has its own set of rules governing how they conduct business. 

In order to have successful trading experience, it’s crucial that you choose the best brokerage as the first step. It is crucial to understand that the decision you make will have an impact on the quality of service you receive, the transaction fees, and the spread costs associated with your trades.

5 Simple Ways to Start Commodity Trading with AximTrade

Trading commodities is now very simple and straightforward if you choose to do so with AximTrade. Here are the 5 simple steps to start Commodity trading online with AximTrade. 

  1. Open a Trading Account – To open a commodity trading account, log in to your member account from AximTrade login, and click on the “+ Open Extra Account” button on the top right.  
  1. Choose your Trading Asset – AximTrade allows you to select your trading asset along with the forex market you wish to trade. Forex, Stocks, Crypto, Energy, Commodities, Crypto and Indices are all available through AximTrade. 
  1. Choose your preferred account type – You can choose between Standard, Cent, ECN or Infinite leverage accounts. You can also choose a Demo account if you’re a beginner. Here’s how to choose the best trading account type for you. 
  1. Name the Account – Give your account a name and create trading and investor passwords. It is not recommended that the investor password and the account password be the same. Don’t forget to use lowercase and uppercase letters, as well as numbers. Click “Done”. 
  1. Start Trading Commodities – Your commodity trading account is now ready to trade. All your accounts can be found under the “My Accounts” tab.  

With AximTrade, you can trade commodities and forex with the best trading conditions and with the lowest possible investment capital. With AximTrade, spreads and margin requirements for commodities trading are among the lowest. A wide range of tools and trading instruments are also available to traders in order to execute trades with confidence. Consequently, this will make it feasible for you to generate impressive profits and reduce commodities trading risks.

Why Choose AximTrade for Commodity Trading?

AximTrade is a multi-asset broker and financial service provider with a set of advanced technologies and highly efficient trading platforms to enable traders to expand their abilities and opportunities. AximTrade’s standards of quality are uncompromising when it comes to transparency and integrity and is considered the best investment for beginners to start with. Know more about our exceptional trading conditions by checking the full AximTrade Review.  

If you’re a novice in forex and finding it difficult to take advantage of market movements, you can try AximTrade’s leading Copy Trade platform and start trading like a pro from day one. Make use of the flexibility to choose from hundreds of successful trading portfolios, and select the one that is best for you.

AximTrade maintains the best business practices and international regulatory compliance to ensure the security of financial investors and clients. There is a high level of protection provided by the company for the interests of the general public and market participants. AximTrade protects clients’ privacy and confidentiality by adhering to the rules of confidentiality in legitimate business transactions. 

Check out the benefits of trading commodities with AximTrade and the top commodities available in AximTrade for commodity trading.

Advantages of Commodity Trading:

Commodities Trading

Are there any unique advantages to commodity trading? There are several advantages to using it. Here is a brief summary. The following are four advantages you can gain from trading in commodities. 

  • Diversification: Investing or trading in commodities can help diversify your portfolios. As commodities often have a low or negative correlation with other major asset classes, trading in commodity markets can also provide a greater degree of diversification than other securities. 
  • Inflation: When there is inflation, currencies depreciate, so stocks and bonds are worth less. However, commodities tend to remain at a positive value during periods of high inflation, which is why gold becomes a safe haven during uncertain times. 
  • Liquidity: Compared to real estate or penny stocks, the commodity market is generally considered to be highly liquid. Especially when it comes to commodities such as gold, oil, and natural gas. 
  • Volatility: In a commodity market, volatility is perceived both as an advantage and as a risk. Knowing when a commodity’s price will rise, for example, during a war in a major oil producing country such as Ukraine, can be advantageous. By understanding macro forces which could impact the commodities markets, smart investors can take advantage of these forces. 

As far as popularity goes, commodity trading is still far behind forex or stock trading. There is no doubt that the commodity transaction tax, or CTT, has dampened volumes in some way. However, in recent years, the advantages of commodity trading are becoming increasingly apparent among traders, utilizing it both as a means of hedging risk and speculatively trading commodities.

Is Commodity Trading Risky? 

Commodity trading is one of the highly risky as well as highly rewarding endeavors that one can engage in. Your portfolio can be effectively hedged against a bear market or inflation with it. However, it should only be considered if you have a deep understanding of the supply-and-demand dynamics of the commodity market. This includes understanding historical trends and current events. 

As far as commodity trading is concerned, it is largely a form of speculation and not an investment. There are a number of unpredictable factors that can affect commodity prices in the short term, including weather, disease, and natural disasters. In the long run, commodities can be a good investment if you choose to invest in long-term or take part in commodity stock trading. With AximTrade, you have access to over 70 stocks at your fingertips.

How much money do you need to trade commodities?

Money is not a major concern when it comes to getting started with commodity trading. You can start trading commodities with the cent account from AximTrade, where you can trade micro-lots starting at $0.01. Since the trading balance is displayed in cents, a $10 deposit will be shown as 1000 cents. The cent account is considered to be the ideal choice for novice commodity traders, offering the perfect start with minimum financial risks. 

The downside, however, is that smaller capital investment will only yield smaller gains. So, if you want to get large profits, then it is best that you choose a standard account with reasonable capital, like $100. Here’s how to trade effectively with $100 and maximize your returns. AximTrade offers a wide array of trading pairs that enable commodity traders to increase their trading efficiency, as well as their profits.

free online forex course