Hundreds of books on commodity trading has been pushed so far. Here are some suggested books that traders may care:

Hot Commodities – How Anyone Can Invest Profitably In The World’s Best Marke – Jim Rogers
Walter Bressert – The 12 Cardinal Mistakes of Commodity Trading
Technical Analysis Stocks & Commodities Using Fibonacci Ratios And Momentum
Cfe – Trading Commodity Spreads
Commodity Trading Advisors – Risk- Performance Analysis- And Selection
Stocks & Commodities – Secure Fractional Money Management
How I Made $1900336.82 Trading Commodities – Larry Levin
Stocks & Commodities Market Profile Basics
Stocks & Commodities – Neuroshell Trader
Intermarket Technical Analysis – Trading Strategies For The Global Stock- Bond- Commodities – Wiley Finance
Hbs – Case Study – Notes On Commodity Futures
Trading  Stocks & Commodities – Reverse Divergences And Momentum By Martin Pring
Commodities & Derivatives  The Four Biggest Mistakes In Futures Trading  J Kaeppel
Trading Ebook  Stocks & Commodities Pivot Points
The Way To Trade – Trading Futures- Stocks- E-Mini- Commodities- Options Or Forex
Commodities Trading Course For Beginners
Stocks & Commodities – Various Trend Trading Articles
Financial Market Trading Ebook George   Bayer
The Next Big Investment Boom: Learning the Secrets of Investing from a Master and How to Profit from Commodities – Kogan Page
Hot Commodities – Jim Rogers
Information Gathering For Commodities Futures – Peter Bain
Commodity Futures Trends Or Random Walks – Richard A Stevenson- Robert M Bear
Trading  Stocks & Commodities – Using Bollinger Bands By John Bollinger
Hamon – Eight New Commodity Technical Trading Methods

Books are all avaibale online on Amazon or Barnes & Noble.

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When farmers take their crop to “market”, they are selling commodities.

Trading commodities is the world’s one perfect business for Commodity Brokers. The upside potential is unlimited and you can control the downside. People can trade commodities on a part time basis or a full-time basis. You can spend as little as an hour or two a day yet earn a full-time income.

Who are Commodity Brokers ?

Commodity Brokers are people that are dedicated to providing their clients with the knowledge and guidance needed to succeed in trading the future markets like corn, soybeans, wheat, crude oil, unleaded gas, gold, silver, and many more.

Brokers make sure that when an order is filled, you will be called promptly. Brokers are now successfully employed after he receives his broker’s license and built up a client base during his internship.

In the present modern age of investing, commodity trading has emerged as an important player in the way many people invest. Commodity Brokers developed it as a reaction to the way the business is conducted, and it continues today in the form of commodities trading online.

Brokers keep in touch with the volatile agricultural markets & offer the best deals at current prevailing market rates to their customers. The Commodity Brokers are your eyes and ears to the futures marketplace. They have to first sell or price the crop locally and then purchase an at-the-money.

Brokers are forced to trade places with a black street hustler. They provide professional services for all sorts of commodity investors. Commodity Brokers collect commission and offer professional assistance.

Brokers are touting futures as a way to protect investors retirement-plan money against a downturn in the high-flying stock market. They use their experience to maximize customer gain. The established Commodity Brokers have the resources and network to provide sound investment advice. A commodities broker provides personal service to meet company or individual needs.

The Brokers can assist with your specific investment strategy. Some Commodity Brokers focus on a specific group of commodities and futures, while others offer diverse investment options. Brokers also serve regional or global markets.

Commodity Brokers research should be conducted when considering the purchase of commodity futures or their various options. Commodity research should include the actual good being traded and the terms of the contract being exchanged. A wise investor conducts proper commodity research before deciding on a commodity investment.

Commodity research by the Brokers can be conducted in the traditional form of a library, trade journal, or market report. More recently, it has been made available through the Internet. Many websites make commodity research easy by providing information on specific commodities, market forecasts, and historical reports.

Commodity Brokers not only closely track the commodities future options, but they also analyze and report in many financial publications. Some publications issue reports on commodities futures options monthly, while others issue daily summaries.

From one commodity market to the other, many commodity futures options are available to the Brokers . Exchanges of contracts and various goods take place in commodities futures options every day. Time invested in researching commodities futures options can prove to be profitable.

Often Commodity Brokers will provide you with insight needed to form a fair price on commodities. There is a great skill involved and it is not as simple as being able to pour through commodities reports. Without the advantages of a Broker the average person would need to devote a good deal of time and effort to understand all that is involved.

With their assistance, you will benefit from having an authority to consult with, someone who can guide you and who genuinely wants to see you succeed in your profit making skills as a commodities investor.

Thus, we can summarize this saying that good Commodity Brokers will help you to make sense of the often complicated world of commodities futures trading. Having the knack to determine the prices of unfinished goods does not come easily to most.

They are there to help you determine what the price of a particular commodity should be.

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Gold, Silver, Copper, Aluminum, Cotton, Wheat, Rice, Pulses are all commodities. Option trading is actually a legal agreement between seller and buyer to trade a particular commodity for a specific mutually agreed price on a particular date in future. If the fluctuation in the price is in your favor you make profit and if the fluctuation is against you make loss.

For example if you think that wheat prices will rise in next month, you will purchase wheat on the current market price. And when the price rises in the next month you will sell it off. This kind of trade is technically known as call option. Similarly if you think cotton price will fall in future you will sell the cotton now on the current market price and purchase it back in the future when the price falls. This kind of trade is technically known as put option. The difference between the purchase price and the selling price after deducting the brokerage charges is your profit.

You can make big profits in some seasonal commodities if you are very well aware about the agriculture cycles. Every year the price of certain commodities rise in high demand and low supply seasons, if you learn about those commodities in detail, you can certainly make huge profits every year. You can also seek professional tips expert traders before buying or selling.

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Following are some of the tips for success commodity options trading:
Always trade within your risk limits. Never do the mistake of investing more than what you can afford to invest. You trade in this market with an amount which you can really afford to lose without risking your assets. Set your limits clearly and stick with them. Most of the people do this mistake of over investing and burn their hands in case of loss.

Follow a strategy. Never try to enter into trades just with your gut feelings. You should have reliable information for price or price fall. Keep yourself informed about the future market conditions, political influences and seasonal changes.

Follow stop losses strictly. If you notice that your trade is in moving in the opposite direction, exit from it immediately the moment it crosses your stop loss. Never stick to it anticipating it is bounce back. Not following this tip can sometimes result in huge losses.

Practice first and invest just a small amount in the beginning. Once you are comfortable with the system and understand how it all works you can invest more. Some trading companies also offer you practice accounts in which you can simply practice without investing any amounts. This will give you clear idea about commodities trading.

Before entering any trade, consider both technical and fundamental analysis. Research thoroughly if you are making large purchases. If you notice excess volatility, keep your temptation in control.

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Physical Trading

Physical commodities trading is buying and selling the actual commodity itself not some sort of derivative instrument like a futures contract. There are obvious downsides to this method namely storage costs, insurance costs and shipping costs.

The physical market, for our purposes, focuses on those commodities that are easily stored, bought and traded for the average investor. These are such things as Gold, Platinum, Palladium and Silver.

The most popular method of trading such items on a retail basis is in the purchase of coins. There are many companies on the web that provide services for the purchase of coins for collectors and speculators.

The internet, of course, has given investors many options for the purchase, storage and trading of gold coins however, our favourite example of trading gold on the web is Bullion Vault. They allow the purchase and storage of gold in small quantities and have an efficient trading system. They hold $290mn of gold for clients and appear to have a very good reputation.

Leverage

If you didn’t know the term ‘leverage’ before the current financial mess, you do now. For those who need a refresher, here is how it works. Let’s say you buy £100,000 of gold and whomever you buy it off only needs you to put down a 10% deposit, £10,000. Let’s say gold goes up 10%. You now have gold worth £110,000, if you sell it now you pay back the £90,000 you borrowed and you get your original £10k back along with your £10k profit. Basically you have turned a 10% gain in the price to a 100% gain on your investment.

Obviously if the price dropped 10% you lose your money, hence the mess that some are in at the moment.

Physical Commodities on Leverage.

There are still some companies around that provide leverage on physical commodities across a range of products, however, the costs associated with trading, such as interest on loans, storage and insurance fees have made the product less attractive to the active trader. Having filled a gap in the market for some time the product was overtaken by some of the instruments mentioned below.

ETFs (Exchange Traded Funds)

More accurately described as ‘Exchange Traded Commodities’ these instruments  take into account all the fees such as storage etc associated with trading. They trade like shares are liquid.

An Exchange Traded Commodity is an investment vehicle that tracks the performance of an underlying commodity or basket of commodities. ETCs work on exactly the same principle as ETFs – with the ETC tracking the performance of a single underlying commodity or a group of associated commodities. Single commodity ETCs follow the spot-price of a single commodity, whilst ‘index-tracking ETCs’ follow the movement of a group of associated commodities, such as cattle, energy or livestock.

ETCs offer the commodities trader a number of inherent advantages without the associated vagaries of trading an individual stock:

Direct exposure to the commodities markets – the value of your investment will rise and fall in direct proportion to the price of the underlying commodity.

Liquidity – ETCs are ‘open ended’ securities, which are created and redeemed on-demand. This means that the supply of ETCs is unlimited and that price changes will accurately mirror developments in the price of the underlying commodity.

Stamp duty & CGT – ETCs are not shares and so trades are exempt from stamp duty. Furthermore, ETCs can be traded within ISA accounts, allowing you to shelter your profit from Capital Gains Tax.
Low dealing costs – ETCs are traded on the regular stock exchange, making them both accessible and affordable – they can be traded through your share dealing service for a commission.

Portfolio diversification – ETCs give broad representation across entire commodity sectors and different geographic regions.

Futures

A futures contract is an agreement to buy or sell your chosen commodity at a specific date in the future – at today’s prevailing market price. These markets are highly liquid and the contracts can be sold on again at any point before the final delivery date, i.e. the day when the farmer or miner will deliver the raw materials to the person holding the contract.

The producers and end-users are still present in today’s markets, but it is the traders and speculators who are now responsible for most of the volume that keeps the market liquid.
The main benefit of trading futures is that you are making a direct investment into the underlying raw material and your future profit or loss is entirely dependent upon fluctuations in the underlying commodity price.

Going back to leverage, most futures trading is done ‘on margin’, which dramatically increases potential profits (and losses, remember).

Shares

Exposure to the commodities market can be gained from buying and selling companies whose business it is to mine, distribute or trade in commodities that you are interested in.

The shares are, generally, liquid and accessible for trading, the problem, however, is that there are many other factors that could effect the share price that may not have anything to do with the underlying commodity. These could be management issues, cash flow, macro economic issues and geo-political issues.

CFDs and Spread betting.

CFDs and Spread betting are easily accessible trading instruments which are essentially derivatives of many of the above, however spreads and dealing costs can be harsh to investors.

Technical Phrases

You will hear such phrases as ‘contango’ and ‘backwardation’.

Contango is a term used in the futures market to describe an upward sloping forward curve (as in the normal yield curve). One says that such a forward curve is “in contango” (or sometimes “contangoed”).

Formally, it is the situation where, and the amount by which, the price of a commodity for future delivery is higher than the spot price, or a far future delivery price higher than a nearer future delivery.

Backwardation is a futures market term: the situation in which, and the amount by which, the price of a commodity for future delivery is lower than the spot price, or a far future delivery price lower than a nearer future delivery. One says that the forward curve is “in backwardation” (or sometimes: “backwardated”).

Commodities trading has many aspects that set it apart from trading other markets and for those that become learned in the trading of the instruments it can be lucrative. Commodity traders over the last few years have seen huge swigs in price which have lead to large profits (and no doubt some large losses).

Currently the global market in commodities is in a state of flux. Gold, for example, is seen as a safe haven against inflation and uncertain times, hence it recent volatility.

Having worked in commodities for some years it was always noted that volatility is our friend, whether a price is going up or down there is money to be made, when commodities are flat there is not much action and the cost of trading out ways the potential profits.

For the foreseeable future volatility is definitely here to stay. Stock market issues and global recessionary fears on the one side and continued development of emerging markets using vast amounts of the world resources on the other, will see volatility in this market for many years to come. This, therefore, as a market to learn about and trade ,is a very interesting and potentially lucrative proposition.

As with all trading, however, there is a very real possibility that trading commodities, especially on leverage, could lose your portfolio a lot of money and you should be aware that it is highly risky. Do not risk more money than you can afford to lose and make sure you have a system that allows you to use limits and stops to contain this risk.

The online trading system available from HF Markets allows you to trade all of the above with assistance, if required, from a professional regulated broker who can guide your initial trading strategies and help you become familiar with trading this exciting area of investment.

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