Welcome to Online Trading Guide
Online Forex Trading Platform Article
This is a selection made from among articles on Online Forex Trading Platform. For a permanent link to this article, or to bookmark it for future reading, click here.
COMMODITY AND FUTURE ONLINE TRADING: APPLY AND SUCCEED
from: www.TradingExposed.com
Before online commodities and future trading became the high-rolling, high-stake investment ground that it is today, its early proprietors were farmers of the 1800’s.
These farmers would grow their crops and take these to the market come harvest time in the hope of selling them. But the main concern then was that without an indicator, they could not efficiently gauge how much of their goods are needed therefore resulting either to shortages or excesses, both causing losses for the farmer.
With shortages causing loss of the opportunity to earn more and excesses causing meats and crops to rot and dairy products to spoil. Also, when a certain produce is out of season any product made from them would be priced so high due to its scarcity.
A central marketplace was subsequently created for farmers to take their harvests and sell them either for immediate or forward delivery. Immediate delivery is what is known now as the spot or cash market and forward delivery is now called futures market.
This concept helped stabilize prices for commodities that were out of season as well as served as an effective indicator of supply and demand therefore saving farmers thousands of dollars that would otherwise go to spoilage.
From forward contracts evolved commodities and futures contracts. Forward contracts are effectively agreements to buy now for payment and delivery at a specified date in the future, which is usually three months from the date of the contract.
These were originally only for food and agricultural products but now they have expanded to include financial instruments. Forward contracts have evolved and have been standardized into what we know today as futures contracts.
Basically, when dealing in online commodities or futures trading, a contract must have a seller (the producer) and a buyer (the consumer). If you purchase a futures contract, you are agreeing to buy a commodity that is not there yet for a specific price.
Although most futures contracts are based on an actual commodity, some futures contracts also are sold based on its future value based on stock market indices.
Unless you are a businessman who is into the trade of the actual commodity you purchased, you won't actually use the goods (if you’re the buyer) or actually provide the commodity (if you’re the seller) for which you're trading a futures contract.
Remember, buyers and sellers in the futures market primarily enter into futures contracts to minimize risk or speculate rather than to exchange physical goods.
On the other hand, online commodities differ from futures trading in that commodities trading may involve the physical delivery of the goods. In which case a receipt is issued in the favor of the buyer. This receipt enables the buyer to take the commodity from the warehouse.
Traders in online commodities and futures market can use different strategies to take advantage of rising and declining prices. The most common are known as going long, going short and spreads.
When an investor enters a contract by agreeing to buy and receive delivery of the commodity at a set price - it means that he or she is trying to earn from an anticipated future price increase, he or she is going long.
When he or she is looking to make a profit from declining price levels, this is going short. The speculator sells high now so he or she can repurchase the contract in the future at a lower price.
When one makes a spread, however, he or she is trying to benefit from the price difference between two separate contracts of the same commodity.
As an online commodities or futures trader, therefore, you should be armed with a firm grasp of how the market and contracts function.
Christine P. Gray is a recognized authority on the subject of online trading. Her website Trading Exposed provides a wealth of informative articles and resources on everything you will need to know about Online Trading. All rights reserved. Articles may be reprinted as long as the content and links remains intact and unchanged.
Warning: file(http://www.searchfeed.com/rd/feed/TextFeed.jsp?trackID=&pID=&cat=online+forex+trading+platform&nl=5&page=1&excID=) [function.file]: failed to open stream: HTTP request failed! HTTP/1.1 404 Not Found
in /mnt/w0209/d41/s37/b029787e/www/tradingexposed.com/online_trading/datas/searchfeed.php on line 8
Online Forex Trading Platform Specific links
Online Forex Trading Platform News
WORLD FOREX: Dollar Surrenders Some Gains To Euro, UK Pound - Wall Street Journal
WORLD FOREX: Dollar Surrenders Some Gains To Euro, UK Pound Wall Street Journal "On a macro view, I think traders are still extremely wary about the euro itself," said Dean Popplewell, chief currency analyst at online trading platform ... |
$$$$ Forex Trading Software used to make online forex trading easy… - Forex Flash
 Forex Flash | $$$$ Forex Trading Software used to make online forex trading easy… Forex Flash There are many success stories about people who were able to make a great deal of money through Forex trading. You may be surprised to learn that some of ... |
Forex Trading Signals- The Choice Is Yours - DailyForex
Forex Trading Signals- The Choice Is Yours DailyForex Forex trading signals are there to assist its users in turning in a profit. A good amount of information may be obtained online via user reviews posted on ... |
FXstreet.com Presents the ITC Online: a Three-Day Educational Forex Conference - PR-USA.net (press release)
FXstreet.com Presents the ITC Online: a Three-Day Educational Forex Conference PR-USA.net (press release) Leading Forex speakers will participate in an interactive Forex event, the ITC online, organized by FXstreet.com, in collaboration with Rockwell Trading ... |
FXCM now offers Trading Station II for Mobile phones - Forex Factory
FXCM now offers Trading Station II for Mobile phones Forex Factory FXCM, one of the world's largest online forex brokers, has introduced a beta version of its mobile trading platform. Available for i-phone, Blackberry, ... |