Yet, don't get too bogged down by your family's preferences. There are plenty of father-son combos out there where one deals only in metals and the other only in farm commodities. Basically, you need to remember that those old days of information arbitrage are long over. What with the Net, TV and SMS, everyone knows everything the minute it occurs anywhere in the world. That is both good news and bad. The good news is that there is little likelihood of anyone taking the market for a ride on the back of insider information. The flip side is that there are really very few opportunities left to beat the market and make a quick profit.
Once your list of commodities is ready (I'd suggest keep it to less than 10), you need to get a feel of how volatile they are. Ask your broker. Some, such as guar, pepper, metals and gold, can be highly volatile, with prices moving very sharply and very frequently, others, such as sugar or potatoes are relatively more stable. If you hate a nail-biting finish to every day, then opt for a commodity that is more placid. Of course, even those quiet waters can easily get turbulent. So you can't really afford to relax. Also less, risk means less chance to strike rich. It's a good idea to watch and learn the price behaviour of a market for several weeks or longer before you put on your first trade.
By now your list should have a handful of commodities left. But you need to do one last final check. Make sure there is plenty of liquidity in the commodities of your choice. Otherwise, you will find no buyers when you want to exit the market. That can be quite a quagmire and make profits a distant dream. Again, ask your broker.
The commodity market you wish to trade in should be understandable, affordable, of acceptable risk and popular. As they say, anything that begins badly ends worse. Choosing the right market will keep you safe.
Once your list of commodities is ready (I'd suggest keep it to less than 10), you need to get a feel of how volatile they are. Ask your broker. Some, such as guar, pepper, metals and gold, can be highly volatile, with prices moving very sharply and very frequently, others, such as sugar or potatoes are relatively more stable. If you hate a nail-biting finish to every day, then opt for a commodity that is more placid. Of course, even those quiet waters can easily get turbulent. So you can't really afford to relax. Also less, risk means less chance to strike rich. It's a good idea to watch and learn the price behaviour of a market for several weeks or longer before you put on your first trade.
By now your list should have a handful of commodities left. But you need to do one last final check. Make sure there is plenty of liquidity in the commodities of your choice. Otherwise, you will find no buyers when you want to exit the market. That can be quite a quagmire and make profits a distant dream. Again, ask your broker.
The commodity market you wish to trade in should be understandable, affordable, of acceptable risk and popular. As they say, anything that begins badly ends worse. Choosing the right market will keep you safe.
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