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Top 3 Best Commodity Trading Strategies

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Nov 20 · 4 min read

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Top 3 Best Commodity Trading Strategies

What is Commodity Trading?

There are several commodity trading strategies among them, we are stating the top 3 successful trading strategies for commodity trading.

Top 3 Best Commodity Trading Strategies

Fundamental Commodity Trading Strategy

For example, the traders can buy the soya crop as the climate will be dry during the summertime, which can lead to an increase in the demand for the less harvested crop.

Another example can be if any particular country announces the increase in demand for oil; as a result, the prices of oil can be increased, and traders might look long position to gain profits from the news.

The crucial part of the fundamental commodity trading strategy is it takes much more time for market research. Analyzing technical charts might be more comfortable than market research. Overall the technical indicators can provide fast profits if they are correctly identified while the fundamental indicators can require much more patience and time for the long term.

Scalping Commodity Trading Strategy

Scalping is one of the profitable strategies for commodity trading, which involves a more significant interaction period with the market. It also reduces the risks of adverse circumstances. This strategy is most effective as the small price fluctuations occur several times rather than the big move, even in the less market disturbance.

One minute charts are crucial in scalping as traders have to execute hundreds of small trades within the short time limit each day.

Breakout Commodity Trading Strategy

Breakout is the circumstance where the commodity prices trend upper or below the price range of the commodity. Traders might take a long position if the price of a commodity moves above the value and might take a short position if the price of a commodity goes below the value. Usually, the volatility of the commodity increases when the breakout takes place.

Breakout commodity trading is a crucial strategy because the breakout can lead to high price movements. Therefore traders can generate a good amount of profit if they manage and execute it correctly.

Bottom Line:

Although every trading strategy needs some patience and understanding, if traders fail in some of their first attempts, it doesn’t mean that strategy is not good; they have to improve their skills and make proper plans.

Executing the above-stated commodity trading strategies, traders need proper understanding, and they have to be more disciplined and have to keep patience. Trading strategies can help traders to navigate the volatility of the commodities as well as the bullish and bearish market trend. To know more about the different commodity trading strategies and tips, traders can go through our website

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