Compared to forex or equity trading, the commodity market is still little known. In fact, the potential benefits offered by commodity buying and selling transactions are no less great than what you might get in forex trading.
For those of you who are learning how to invest or look for asset diversification, here are 5 reasons why you should consider trading in the commodity market.
Appropriate Margin Requirements
In commodity trading, the specified margin requirements have been adjusted to the characteristics of each commodity. For example, in gold trading, a minimum margin is set at USD 1000 for 1 lot. While for oil commodities, 1 lot has a minimum margin of USD 2000. That way, you can maximize your trading potential according to the type of commodity instrument you choose.
Will not lose value
A uniqueness that only assets possess in the commodity market is the valuation of the actual price of the commodity traded. For example, if the value of a currency or stock may fall or become worthless due to economic turmoil or the stock company is bankrupt, this is not the case with commodities.
One gold bar for example, will not lose its price. Likewise with silver and oil. Although the buying and selling prices will fluctuate, your commodity assets will always be valuable and tend to experience price increases as the mineral reserves decrease on earth.
The nature of commodity goods that are needed by industry and consumers around the world makes liquidity very high. You will have no trouble finding buyers of your commodity assets when trading online.
If you want to diversify your investment portfolio, then valuable commodities such as gold, silver and oil are the right choice. Because these items are traded in different markets that have different risk characters.
That way, if your investment in the financial market is disrupted, you can secure your assets and funds in the commodity market, and vice versa.
Moves Based on Fundamental
Commodity markets are known to have movements based on changes in the fundamental prices of these goods. Thus, you can do fundamental analysis more accurately when trading in the commodity market.
Try commodity trading at Monex. You can learn trading online in the commodity market using a Monex demo account, free! Also find various materials and trading guides that are easy to understand for online trading beginners.