Commodity Trading 101
I’m Meta Matt, Director of Education and welcome to PB University LITE! This is a 50 Class Trading 101 Series geared towards both new and veteran traders alike! We go over everything from Trading Psychology, Technical Analysis, and Options Trading to Commodity Trading, Forex, and more!! This 50 Class series is not designed be taken in order, it is instead designed for traders to browse and pick which classes interest them. I will include the list of classes at the bottom of this page.
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What are Commodities? Commodities are the backbone of our global economy. Unlike stocks or bonds, which represent ownership or debt in a company, commodities are tangible goods or raw materials that are traded in financial markets. From precious metals like gold to agricultural products like wheat, commodities encompass a wide range of assets.
A Brief History of Commodities Trading The roots of commodities trading stretch back to ancient civilizations when goods were exchanged through barter systems. However, as societies evolved, the need for standardized exchange systems became evident, leading to the development of commodity markets. These markets have evolved over time, becoming integral components of today's financial landscape.
Types of Commodities Commodities can be broadly categorized into two main groups: hard commodities and soft commodities. Hard commodities include natural resources like gold, crude oil, and copper, while soft commodities encompass agricultural products such as corn, coffee, and cotton.
How Commodities Differ from Other Assets Unlike stocks or bonds, which derive their value from company performance or debt obligations, commodity prices are influenced by supply and demand dynamics in the physical market. Understanding these supply and demand factors is essential for commodity traders to anticipate price movements effectively.
Methods of Trading Commodities Commodities can be traded through various methods, including spot markets, futures contracts, and exchange-traded funds (ETFs). Each method offers unique advantages and considerations for traders, from immediate delivery in spot markets to hedging against price volatility in futures contracts.
Strategies for Commodity Trading Technical analysis plays a crucial role in commodity trading, helping traders identify price trends and patterns. Additionally, understanding fundamental factors such as supply and demand dynamics, economic indicators, and geopolitical events is essential for informed decision-making.
Risk Management in Commodity Trading Managing risks is paramount in commodity trading, given the inherent volatility of commodity markets. Strategies such as diversification, position sizing, and leveraging can help mitigate risks and maximize potential returns.
Advantages of Commodity Trading Commodity trading offers several advantages, including diversification of investment portfolios, hedging against inflation, and exposure to global market trends. Moreover, certain commodities, like precious metals, can be physically owned, providing a tangible asset for investors.
PB University LITE Class List
1) Trading Terminology
2) Stock Market Indices
3) Common, Preferred, and Penny Stocks
4) Diversification of Assets
5) Fundamental Analysis Made Easy
6) Technical Analysis Made Easy
7) Risk Management In The Market
8) Portfolio Management
9) How To Follow Market News
10) Trading Psychology
11) Options Explained
12) The Greeks In Options Trading
13) How To Short Sell Options
14) Covered CALLS
15) Spread Trading
16) Online Brokers for Options Trading
17) Implied Volatility Calculators & Tools
18) Protective PUTS
19) Iron Condors
20) Straddles
21) Reading Level 2
22) Taxes
23) Trading Psychology Techniques
24) The Art Of Trading
25) Becoming A Jedi In The Stock Market
26) Futures Trading Explained
27) Commodity Trading 101
28) Regulatory Environments
29) How To Become A Millionaire
30) $100K In 100 Days
31) Wash Sale Rule
32) Behavioral Finance Part 1
33) Behavioral Finance Part 2
34) 5 Charting Indicators
35) Fair Value Gap
36) Insider Trading and Market Manipulation
37) Stock Chart Types
38) Moving Averages 101
39) Base vs Precious Metals
40) Electricity Trading 101
41) Trading Brokers 101
42) 5 Trading Strategies
43) 85% Trading Rule
44) Are Win Rates A Scam?
45) Futures Trading 101
46) ATR Indicator Strategy With The Greeks
47) MACD Indicator 101
48) Bollinger Bands Indicator 101
49) Wedges, Triangles, Flags and Pennants
50) RSI Divergence 101
