Trading in commodities has been practiced for many thousands of years. It started many years ago as bartering between merchants. A merchant who had an excess of a specific commodity would exchange it for a second commodity of which he was short, and of which the second merchant had an excess.
Today commodity trading is worldwide, and amounts to trillions of dollars worth a day. The sheer size of international trade necessitated the introduction of tokens and later money as one of the commodities that was exchanged, and today the forex market itself amounts to trillions of dollars daily.
As opposed to products that are manufactured and carry a trademark, commodities are a form of merchandise that has a common price around the world. Coffee beans, for example, carry the same price in Rio de Janeiro, New York, London and Cape Town.
Commodity prices fluctuate according to the economic law of supply and demand, and can be greatly influenced by natural disasters, local political situations, unrest and war.
Generally speaking commodities are naturally occurring goods such as gold, oil or iron ore or their refined products, or agricultural products such as eggs, beef, sugar and corn.
Until relatively recently, all trading was carried out by specialist traders in commodity exchanges. However the advent and expansion of the Internet has meant that commodity trading can today be carried out by anyone with an Internet connection.
Don’t expect to become a commodity trader overnight though.
Initially it takes a certain amount of trading training to enable you to understand the terms used, the conventions and the ‘language’ of trading. You can learn about some of the trading courses available.
Once you are completely familiar with how the commodity market works, and this is made easy by being able to operate a ‘dummy’ account until you are completely familiar with the operating procedures, you will then be ready to ‘go live’. To go live you will have to open a trading account with a trading house – this can usually be done for as little as US $100, and with just that amount on deposit it is possible for the astute commodity trader to make considerable amounts of money.
However it must be stressed that, as with any financial undertaking, extensive research and training is a distinct requirement before entering the commodity market. Commodity trading is a way of making considerable profits from a relatively small investment, and after you have been trading for a while you’ll discover that it is very possible to make a profit out of not just an upward trending market, but also one with a downward trend. Becoming a commodity trader is one of the best ways of achieving financial freedom, and one of the best ways of getting an understanding of the practice is to first attend one of the seminars or workshops given by Work Your Wealth for just this purpose.