Introduction:

Commodities play an important role in global financial markets and have an important impact on the global economy and investment fields. Commodities, as part of asset allocation, play an indispensable role in investors' risk diversification and asset diversification. Understanding commodities and related knowledge is crucial for investors.

1. What are commodities?

Commodities are basic material goods that are traded on a large scale and are widely used as basic raw materials for industry. In the financial investment market, bulk commodities include chemical products, non-ferrous metals, steel, agricultural products, iron ore and coal, etc. Commodities can be divided into three categories: energy commodities, basic raw materials and agricultural and sideline products.

2. What are the categories of commodities in transactions?

Commodity trading includes two major branches: physical/spot trading and financial derivatives trading. Specific categories include the following:

a. Basic raw materials: Metal products include gold, silver, copper, iron, zinc, lead, aluminum, platinum, nickel, etc., which are the basis for the development of manufacturing industry.

b. Energy products: mainly including natural gas, crude oil, thermal coal, gasoline, etc., which are important pillars of the development of modern society.

c. Bulk agricultural products: mainly include corn, soybeans, wheat, cotton, sugar, etc., which are easily affected by factors such as weather and natural disasters.

d. Precious metal commodities: including gold, silver, platinum, etc., are widely used as tools for personal asset investment and value preservation. In particular, gold and silver are very popular investment products around the world.

3. Which commodity is most worth trading?

a. Agricultural products

Soybeans, corn and cocoa are all important agricultural products globally, and demand is affected by human food consumption and biofuel demand. Investors may consider investing in soybean futures, corn futures, cocoa futures and other products to achieve investment profits.

b. Petroleum

Petroleum is a non-renewable resource with a wide range of applications. Not only is it needed for daily life, but it is also needed as an important reserve for national strategies. At present, oil is the commodity with the largest trading volume in the world. It has the characteristics of high quotation transparency, open and transparent market, two-way buying and selling, and high capital utilization rate.

c. Natural gas

With the development of renewable energy and the increasing awareness of environmental protection, the demand for natural gas will continue to grow, and there are great market investment opportunities.

d. Precious metals

Judging from the current market conditions, global investors are very fond of gold among precious metals, because in recent years gold has given full play to its hedging and investment value-added value, and is a good safe haven. Investors can avoid market risks and achieve wealth appreciation by investing in gold.

For individual investors, risk preference, economic strength, investment needs, return expectations, investment capabilities, etc. are all important factors in determining which commodities are most worth trading. Therefore, the most valuable commodities to trade vary from person to person, and the one that suits investors is the best.

4. Why trade commodities?

a. the backbone of the national economy

The maturity of the commodity supply chain determines a country's industrial development level, supports the national economy, and is an important indicator of national competitiveness. Commodities connect the real economy and finance. Affected by the global economic and political situation, price volatility and risks are high.

b. achieve trade balance

Commodity trade is an important aspect for countries to achieve trade balance. Through bulk commodity exports, countries can increase export quotas and foreign exchange reserves, which is crucial to the development of the national economy.

c. investment value preservation

Commodities are considered one of the best options for capital protection investments during times of inflation. The commodity trading market has attracted the attention of investors and provides investors with a wide range of investment preservation and appreciation opportunities. Investors can directly choose to invest in the commodities themselves to obtain benefits.

5. What factors affect commodity prices?

Supply and demand

Changes in supply and demand for commodities are important factors in price movements. Supply is determined by manufacturers, governments, investors, etc., while demand is affected by economic conditions, political situations, demographic changes, and weather changes.

Monetary Policy

Decisions made by a country's central bank can lead to currency appreciation or depreciation, which directly affects commodity prices. Currency depreciation causes commodity prices to rise, while currency appreciation causes prices to fall.

Global economy

During the global economic growth cycle, commodity prices rise; during the economic downturn cycle, commodity prices fall.

speculative factors

Speculators buy commodity futures contracts to drive commodity prices up or down.

USD exchange rate

Since most commodities are priced in U.S. dollars, the U.S. dollar exchange rate directly affects commodity prices.

geopolitics

Geopolitical issues will bring uncertainty to the commodity market and affect price fluctuations.

Seasons and climate

The prices of some commodities are affected by season and climate. The prices of agricultural products are related to the harvest season. The climate will also affect the output, thus affecting the prices.

6.What are the methods of commodity trading?

Spot trading: 

It refers to offline trading, where the buyers and sellers physically exchange commodities. Although this method is gradually being replaced by the development of internet technology, it still exists.

Forward trading:

Both parties agree to deliver a specified quantity of goods at a predetermined price at a future time and place.

Auction trading:

Auction trading can be divided into online bidding and online auction. In bidding, suppliers issue bid invitations, and buyers openly compete by increasing their prices until the highest bidder wins the item and signs the electronic contract. In auctioning, buyers issue auction invitations, and sellers openly compete by decreasing their prices until the lowest bidder wins the desired item and signs the electronic contract.

Tender procurement:

Procurement parties publicly invite bids, and the bidding parties compete to determine the winning bidder.

Listing trading:

Buyers or sellers enter detailed information about the goods they wish to order or offer into a trading system. Both parties can access and review the listing proposals through the system and finalize the transaction by signing an electronic trading contract.

Electronic trading:

The utilization of internet platforms for bulk commodity trading, such as futures and options. Investors can participate in electronic trading by simply applying for a trading account through online trading platforms. In the internet era, electronic trading is the most common method for investors to participate in bulk commodity trading, offering advantages such as low barriers, low costs, and flexible transactions.

Additionally, there are other trading methods, including two-way bidding, match trading, and negotiation trading. Each method has its own characteristics and applicable scenarios, and investors should choose the most suitable method d on their own needs and risk control requirements.

7. What is the minimum fee for commodity transactions?

Minimum capital requirements for commodity trading vary by commodity and platform. Some trading platforms may require a few thousand dollars to open an account, and other trading may require a higher minimum deposit. In addition, some transactions adopt a leverage system, so investors can use a small amount of funds to control larger transaction volumes.

JRFX is a well-known commodity trading platform. Its commodity trading account is free to open, the minimum deposit threshold is US$100, and the trading leverage can reach 1,000 times. There are no commissions and handling fees for transactions, which reduces the starting point and cost of investment. Investors should choose an appropriate platform d on their own risk tolerance and goals.

8. What are the skills for trading commodities?

1. Choose the right product:

Like most investment products, different commodity trading products have different trading rules, investment returns and trading risks. Investors need to choose the appropriate products for trading.

2. Pay attention to fund management:

Fund security is an important prerequisite for profitable trading. When trading commodities, it is taboo to operate heavy positions. The position operation should not exceed 50%. For mid-line trading, it cannot exceed 30%. Under normal circumstances, it is recommended that investors use less than 30%. Use the funds in your account to conduct trading operations and enter the market with a light position.

3. Diversify your investments:

Investors should diversify their investment funds into different commodities and use portfolio investments to reduce investment risks. If investors only focus on a certain commodity market, they may face the risk of large market fluctuations.

4. Accurately judge the market situation:

Being able to accurately judge the general direction of market trends is a prerequisite for trading commodities. Investors need to learn to grasp the timing of transactions, judge market trends d on fundamental and technical information, and improve the accuracy of transactions. They must not operate randomly, otherwise it will be difficult to make profits.

5. Don’t chase the highs and kill the lows:

The commodity trading market is constantly fluctuating, and there are opportunities for profitable trading at any time. In order to pursue high returns, many investors like to chase highs and sell lows. They are often easily trapped, and in the end the gains outweigh the losses.

6. Strictly limit profits and losses:

If investors want to obtain ideal returns in the commodity trading market, they need to enter the market at the appropriate point according to their own risk tolerance, and they must also leave the market at the appropriate point. In actual operations, stop-profit and stop-loss are The importance is highlighted.

9. How to start trading commodities through JRFX

Open an account for 0 yuan:

JRFX provides high-quality trading conditions and a variety of trading accounts to meet the needs of all traders. Account types are divided into demo accounts and real accounts. Demo accounts are suitable for novice investors. Investors with investment experience can directly apply for real accounts. All account openings are free.

Select account:

JRFX trading accounts are divided into three types: EasyPro account, Standard account and ECN account. Choose the appropriate account according to actual needs.

Inject capital and activate account:

With a minimum investment of $100, you can participate in the commodity trading provided by JRFX.

Start trading:

There are 0 commissions and 0 handling fees for transactions, and a single transaction starts from 0.01 lots. Get fully transparent high-quality order execution speed and the best trading conditions in the industry.

Learn the basics for free:

JRFX has a large amount of free analysis and educational materials. Investors can learn basic knowledge, trading skills, market analysis techniques, etc. for free to improve their personal investment capabilities.

10. Frequently Asked Questions about Commodity Trading

1) How to conduct commodity trading?

Understand the market:

Before conducting commodity trading, investors need to have a sufficient understanding of the commodity market, including commodity trading varieties, trading terms, trading rules, investment risks, etc., so as to know themselves and the enemy.

Choose a variety:

According to your actual investment needs and investment capabilities, choose the commodities that suit you to participate in investment.

Apply for account opening:

Applying for a personal trading account is a necessary process for commodity trading. The premise is to choose a formal and reliable trading platform. Different trading platforms have different account opening rules, account opening conditions and account opening thresholds. Choose an account opening platform carefully.

Develop strategies:

Each investor's trading style, investment capabilities, and return expectations are different, so investors need to develop a trading strategy d on their own actual situation. It is generally recommended to develop a trading strategy that suits them through simulated trading.

Deposit investment:

After you are fully prepared, you can start investing in commodities. In actual trading operations, you must always keep in mind that there are risks in investment, improve your awareness of risk prevention, and constantly adjust your trading strategies d on market trends and other factors to improve your trading. Success rate.

2) Can commodities trading be profitable?

Commodities are one of the most popular investments in the global financial market. As long as investors make the right move, they can generally make money. However, commodity trading is also an investment method that involves both risks and returns. If you enter the commodity trading market with a wealthy mentality, it will become difficult to make money. If investors have a deep understanding of commodity trading, reasonably master investment skills, and accurately judge market conditions, their chances of making money will increase.

3) What is the most traded commodity?

Oil is the world's most traded commodity.

Oil not only has commodity attributes, but also financial attributes and geopolitical tool attributes. As one of the most important energy sources in the world, its price changes will have an important impact on the global economy. Therefore, oil is also known as the representative of bulk commodities.

4) What are the most popular commodities?

Gold among precious metals is the most popular commodity.

Gold not only has commodity attributes, but also financial and monetary attributes, and can be used as a hedging tool or investment tool. The gold market is a global financial market. The Asian, European and American markets form a complete world trading market. The number of funds and investors participating in gold transactions every day is very large. As the price of gold continues to rise, gold is also one of the largest commodities traded in the world.

Conclusion:

Commodities markets attract many investors. Beginners need to have a deep understanding of the trading market, rules, varieties and techniques when getting started. Choose a legal and formal trading platform, formulate an investment strategy that suits you, develop a good trading mentality, and accumulate experience and confidence. The above is a comprehensive guide to getting started with commodity trading. I hope it will be helpful to investors. JRFX would also like to warmly remind all investors that the commodity trading market is changing rapidly and investment is risky. Please be cautious when entering the market.