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.
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.
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/
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.