Have you seen the movie “Trading Places”? In the final scene Dan Akroyd and Eddie Murphy ruin the two billionaire Duke brothers doing futures trading on orange juice.
If you make mistakes trading with futures you can cause yourself a lot of damage.
It’s true that with futures you can make a lot of money. But the threshold of access and the risks, in my opinion, are higher and should therefore only be done by professional traders.
To better understand this article, you should read my free ebook on Commodities Spread Trading. If you have not already read it, you can download it here.
I have met big time traders who have explained to me the Commodities Spread Trading System. The system of trading on Commodities is suitable for those who start with zero experience. And with absolutely manageable risks.
I would just like to clarify one thing: it is possible for a normal person, even without large capital (say it is advisable to have at least 10,000 Euros to invest) to trade with raw materials.
It is possible to earn from buying soybeans, gold and coffee and selling oil, pork and orange juice. And dozens of other raw materials. Just like in the movies. And without going to Chicago or New York, but staying in the comfort of your home.
What is Commodity Spread Trading and how does it work?
If you do Dry trading on Futures (eg soybeans) let’s say that you buy because you think the price will rise. Obviously, you should not buy the soy wagons, but a Futures document that will allow you, at maturity, to buy soybeans at a fixed price.
If you predicted right and soybeans rise in price you sell your Future document to those who really need to buy soybeans (eg: those who make soybean oil) and your profit is the difference between the purchase price and the selling price.
If you are not right and soybeans fall in price you have lost. And if you’ve invested a lot, you will lose a lot and this is what you usually see in films.
With Commodity Strategy Spread Trading you do not invest in one Future, but instead you invest in a title constructed from price differences (legs) of two Futures: one bought and one sold.
Why do you do this? So you can protect yourself and spend as little as possible.
The advantages of Commodity Spread Trading
Investing in Commodity Spreads means protecting yourself and the reason is clear. A Commodity Future Spread filters the trends so you do not invest a lot of time thinking “will soybeans rises, or will soybeans fall”?, but you invest with user-friendly and specific tools,dedicated to Commodity Spreads.
In fact, trading with Commodity Spreads is a very mechanical system and has a whole series of rules that guide you step by step to trading results. No adrenaline shots like in Forex or complex analysis of risk profiles like with Options. Commodity Spreads follow a method and get results.
If you want to go more in depth and speak technically – to learn more, I invite you to download the ebook on Commodity Spread Trading – these are the advantages of Spread Trading with Commodities that are more straightforward compared to Futures trading:
- the spread lowers volatility and allows you to protect yourself from the risk of a trend of a raw material that you had not anticipated (critical!);
- Many stock exchanges recognize a discount on spreads (up to 95%) in the margin needed to perform the operation;
- the seasonal nature of spreads is more precise than the one linked to individual futures;
- spreads have trends that last longer than that of futures.
There are other more technical advantages that are explained in the seminar, but these are already readily understandable and relevant.
Commodity Spread Trading can transform what is normally chaotic trading, risky and suitable only for big time portfolios, into a trading system that I could explain to my aunt.
Download Trading with Commodities and discover that it is easy to make money with raw materials in a profitable and affordable way for everyone.
In fact, in the seminar you will learn all the tools for your trading, evaluate them and then be able to act. The system is very systematic and clear.
If you’re looking to create your financial freedom by trading, but without the Forex adrenaline rush or the conceptual complexity of options, and you want to follow a well-defined method, Commodity Spread Trading is the perfect trading for you.
To your financial freedom