10 Aug Why you should trade commodities

Points to take away from this read:

Mar­kets are open 24/5.

High­ly liq­uid market.

Why I trade com­modi­ties futures (for now)

When I decid­ed to get into trad­ing I had set­tled on Pen­ny Stocks. My friend had sug­gest­ed it and I thought it’s a good place as any to get start­ed. For those that don’t know by the way, these are the stocks with the least val­ue. Nowa­days con­sid­ered any stock below 5 dol­lars US each. Pink sheet stocks. The nobody-wants-to-touch-stocks. Remem­ber the ‘Wolf of Wall­street’? Those stocks! That seemed like ‘the next big thing’ and there were all these guys on YouTube rag­ing on about it. 

Not judg­ing

I quick­ly found out it was more about play­ers in the mar­ket hyp­ing up a pen­ny stock to get peo­ple to buy it and then the stock would get dumped leav­ing every­one that bought in out to hang dry. The pump-and-dump method. This is not for all pen­ny stocks the case, but it does seem for most. And then you have the likes of peo­ple like Tim­o­thy Sykes teach­ing you how to take advan­tage of these pump-and-dumps. I am not judg­ing him or the way this ‘pen­ny stock game’ is played. I have no ‘feel­ings’ about it, if you will. It’s just not for me. If it is for you? Go check out Tim­o­thy Sykes at http://www.timothysykes.com/ since he seems to be the king in this field. Good on him and good for you!

Not bound to time

The main point for not want­i­ng to trade pen­ny stocks was actu­al­ly about the time-win­dow I could trade them in. They are list­ed on Over-The-Counter (OTC) bul­letin boards in the US. For me, liv­ing in Asia, that is a bit of a prob­lem. When the mar­kets in the US open, it is 21:30 in Asia and they close at 04:00 in the morn­ing. I like get­ting up ear­ly so this doesn’t real­ly fit my sched­ule. For­eign exchange (Forex) and com­modi­ties how­ev­er don’t have that much lim­i­ta­tion on time. So there is less of a need to be behind my com­put­er at a cer­tain time. There are, but we’ll get to that in anoth­er post. 

24/5 (ish)

So Forex and com­modi­ties are trad­ed around the clock but there are some excep­tions because some have dai­ly breaks. The major pairs can be trad­ed from Sun­day 21:00 GMT till Fri­day 21:00 with­out dai­ly breaks, how­ev­er WTI Crude Oil, for exam­ple, can be trad­ed from Sun­day 22:00 GMT till Fri­day 21:00 with a dai­ly break from 21:00 GMT till 22:00. So please check the com­mod­i­ty or pair you would like to trade before you get start­ed. Here is one of many sources where you can look it up: https://www.easymarkets.com/int/trade/hours/

Liq­uid money

Not real liq­uid of course, that’s just sil­ly. Just ref­er­enc­ing to the Forex and com­modi­ties mar­ket. It is high­ly liq­uid. Mean­ing there are always peo­ple buy­ing and sell­ing with­in trad­ing hours. This is impor­tant because when you take or exit a posi­tion there is always some­one there to take the oth­er side of that. Buy or Sell. 

What’s up, world?

Anoth­er rea­son, for me at least, was that I would have to know a bit about what goes on in the world. Which, please don’t judge me for it, I had nev­er real­ly done before. I took a very shal­low inter­est in it, but with grow­ing old­er, that inter­est increased grad­u­al­ly. When I start­ed learn­ing about for­eign cur­ren­cies and com­modi­ties it real­ly made me immerse myself in the geopol­i­tics as well as the his­to­ry behind these finan­cial instruments.

Did you like the read? Please troll me if you didn’t! I dare you.