Forex and commodity futures are traded in trillions on daily basis across the globe. The trade is dominated by banks and other financial institutions, on their own account or on behalf of clients. Fortunately, the market is available to individuals as well, on various trading platforms.
Forex and commodity futures trading can be very rewarding. In Africa, though not as huge in volume as it is in Europe, America and Asia, banks in Ghana, Nigeria and Kenya are raking in millions very year from forex trading. And anyone can make as much if you’re willing to devote yourself to it.
- Learn First
The returns one can make from trading forex and commodities online can be refreshingly overwhelming. You can easily make 10% profit on your capital in a single day, sometimes a single trade, if you’re trading on margin. But to be able to do this, you should be ready to learn, learn and never stop learning. If you’re a beginner, don’t be in a hurry to open a live account to start trading. I advise you do a lot of reading around the subject, and master the basics. Understand the market and pick the commodities or currency pairs you want to trade. Then you do further reading. There are tons of learning materials on forex trading and commodity futures trading online.
- You’ll Win Some, Not All
You have to be ready to make money. Yes, a lot of money. But this won’t come as easy as opening an account and starting to trade. The risk in forex and commodity trading is very high, and even higher when you trade on margin. But so is the reward. You must psyche yourself first; to win some and lose some. You cannot make profits on every trade. I don’t know any trader who has not recorded losses yet, not even the experts. But my hope is that you win more than you lose.
- Choose a good broker
The choice of an online broker sure matters. They make small differences that matter in the end. The price at which you buy and sell (or sell and buy) currency pairs and commodities is what your broker quotes for you. With a lot of white-labeled trading platforms all over the place, some may be adding and deducting 1pip from the price anytime you make a trade. It may appear insignificant but it makes the difference between breakeven and a loss. It also affects your profit or loss, in big-ticket trades. Some brokers also charge you commission on your earnings, whilst others charge on the principal amount credited to your account. Others give high margins whereas some others would give you comparatively low margins, for different reasons. The minimum amount you can start trading with is also determined by your broker and sometimes the size of trades. And all of these would, together, affect your trading in a positive or negative way. Make sure your broker is giving you the best terms.
I’ll continue giving you simplified tips on commodity and forex trading in subsequent posts. Drop a comment if you want explanation on aspects of the subject. Share if you enjoyed this brief. Go make money.