Commodity

There are so many traded commodity products either physically or in futures contracts. It is caused by the fluctuation of commodity price which is determined by supply and demand in commodity markets. The other factors that determined the bid price are population growth, increasing of utilization and new utilization as substitution materials. While the determined factors of offer price are escalation in production capacity, favorable or unfavorable season, restriction or incentives by government, natural disaster or peace and war condition. All these aspects encourage the emergence of needs for hedge from people in physical market to hedging on commodity markets. Therefore all of these factors cause the movement in commodity price is quite high.

By margin trading system, investors is able to buy and sell contracts in a value that much higher than available capital. Generally, commodity trading is performing on margin system, since the supply and demand in commodity physical market only can cause daily commodity price to move in ranges of one or two percent compared to previous closing price.

Why choosing Commodity Trading?

Buyers can meet directly with the seller
The transaction process is running efficiently and transparently
Allowing physically delivery process
Two ways transaction
Percentage of Liquidty rates is quite high

Risk in Commodity Trading

We need a trading plan to manage level of risk. Transaction in commodity market is not only about profit or loss, but to find the right point or timing to entry or exit the market. Therefore, a trading plan should be made on technical and fundamental basis. The movement and fluctuation of price can be predicted by these both of analysis, so the risk of wrong position and loss can be minimized and the target of profit/loss to be achieved can be predicted before execution of transaction. The usable strategy are Stop Loss, Trailing Stop Loss, Cut and Switch and Averaging. With trailing stop facility, investor is able to move the stop loss level for the purpose of protecting already gained profit.