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  • How To Trade Commodities

    The trade in commodities is one of the mainstays of the global trading system. Have an understanding of how the market moves is of vital importance, since we can make great profits, provided you have a thorough understanding of issues relating to goods traded worldwide, as well as an understanding of the mechanics of how you can to trade with the goods.

    But if the trading in commodities has a long tradition, innovations are still in progress: advances in technology suggest that new ways of trading are coming on the market, while the advent of commodity trade indicates that access to markets Global is also available for private investors who have a small amount of capital.

    What Is Raw Materials?

    The raw materials are a number of primary resources that can be negotiated on a quantifiable amount with the minimum standards of quality. The establishment of these basic parameters means that products can be traded in large volumes in the international commodity exchanges, with merchants that can be reasonably certain that the goods traded are not lacking.

    What Is Included In Commodities?

    The raw materials can be divided into a series of classifications: agricultural products (maize, coffee, cocoa, pork bellies, frozen orange juice, etc.), energy products (oil, gas, etc.) and metal products (gold, silver, iron, copper, etc.). There are also a number of products that do not conform to any classification.

    The spread of technology has enabled the introduction of new goods, such as hi-tech products. The silicon chip is just one example, the exchange of goods of new generation, which is made ​​at the Integrated Nano-Science Commodity Exchange, began in early 2011.

    Furthermore, the recent attention to the environment led to the creation of trade in environmental goods. This includes trading in carbon dioxide emissions, like carbon offsets, that of renewable energy certificates.

    The Most Traded Items Offered by Most Brokers Are:

    Oil

    The prices of Oil fluctuate depending on market basics including news headlines, supply and demand, as well as fundamental economic data. The price of oil is also heavily affected by historical chart patterns. Due to high vitality in recent years many institutional traders believe that prices have been most affected by speculation rather than these major fundamental factors mentioned above.

    Platinum

    Platinum is a chemical element represented with the symbol Pt. Platinum is commonly used for jewelry, as well as electrical contacts and laboratory equipment. This is a fundamental element that has multiple uses and users.

    Silver

    Silver was first used as currency in 700 BCE by the Lydians. Years later silver was refined and turned to coins in its pure form. Many countries still use silver as a basic unit of monetary value and in the modern world silver bullion (silver for trade on the open market) is known by the symbol XAG. In the United Kingdom the British “pound” refers to the value of one pound of sterling silver. In the 1800’s the United Kingdom as well as the United States changed from silver to gold as it was a more sought out commodity.

    Gold

    Historically gold coins were used as currency; once paper money was introduced in the 1800’s gold became less commonly used as currency. In actuality paper money as we know it today is simply a receipt which is redeemable for gold. Today buying gold is thought to be a natural way of hedging against world inflation and together with the rise of oil prices has shown strong connections to global growth. In September of 2011 Gold prices surpassed 1,800 per ounce, which just 10 years ago gold traded around 400 dollars per ounce.

    Coffee

    Is a beverage brewed with dark color and acidic flavor. Coffee that is purchased by millions daily is produced naturally primarily in Latin America, Africa, South Asia, and Southeast Asia. Unroasted coffee beans are green. Easily one of the most popularly traded commodities.

    Corn

    Is part of our world’s biggest industry, Agriculture. Over the past ten years production and growth levels have made cord one of the world’s leading crops. The United States of America easily grow the largest quantities of corn in the world and actually offers it’s agricultural sectors special incentives to grow corn rather than other crops. The area within the United States where corn is most commonly grown is referred to as the “Corn Belt”. The States in this belt include Nebraska, Indiana, Illinois, and Minnesota.

    Sugar

    Sugar is used widely in mass-produced food products for various reasons. For 100’s of years previously sugar was considered a costly “spice” and was highly valued. Sugar was known as a luxury and kept only in homes of the upper class and royalty.

    Wheat

    Wheat is the second largest commodities crop in the world, behind only corn. It is often subject to large volatility swings resulting from shortages in 3ed world countries as wellas global droughts and global hoarding.

    Cotton

    Is widely produced and currently China and India are the world’s largest producers. These countries have an annual production of approximately 24 and 34 million bales respectively. Most of the production made by these countries is used by their textile industries. The United States of America is the world’s largest exporter of raw cotton with yearly sales of $4.9 billion. Africa is a far second with sales in the range of $2.1 Billion. In total international trade on this commodity is estimated at $12 billion dollars.