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A Guide to Day Trading Commodities

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Day Trading Commodities in the 21st Century

Day Trading Commodities

You should have a clear understanding of two terms before you start day trading commodities. Commodities are marketable goods. Examples of commodities are wheat, copper and oil. Day trading is a system of investment, which tries to earn money by making quick, daily trades.

Day Trading Commodities FAQ

•             How Much Cash Do You Need to Start Day Trading Commodities?

If you start with anything less than $10,000, you are only going to succeed with a great deal of luck. Counting on luck is a sure recipe for disaster. You need at least $10,000 to diversify your holdings properly. This minimal recommendation is good if you are only hoping to make a small, quick profit. You will need much more if you want to make a living by day trading commodities.

•             How Do You Choose a Broker?

You should choose a broker for his or her low commission rate. This is the most important quality of a broker for day traders. High fees will eat up your profits. Do not go to your broker for advice. They are often just salesmen and are not out to help you. You can find many brokers online if you want to be a day trader in commodities.

•             How Often Should You Trade?

Over-trading is the nemesis of a day trader. However, if you are in this to make money in the short term, you will have to trade more frequently than other investors do. Avoid trading just for the sake of trading. This cripples many day traders who might otherwise have been successful. Sometimes, it is a good idea to stop day trading commodities for a while and watch the market. This is better for your portfolio than day trading commodities too often and paying more in commissions.

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