How to Trade Commodities Online
Commodities are natural resources like precious metals, soybeans, wheat and oil. All of these commodities are traded for profit. When you invest in commodities, you may wish to lower your cost by using an online broker. Online brokers service many customers and provide cheaper trading costs than traditional brokers. This is accomplished by automating the trading process electronically. In exchange for this lower service cost, you are responsible for inputting your own orders into the online system.
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Instructions
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Contact an online brokerage firm. You may search the Internet for a brokerage account or get a recommendation from a friend. However, your bank may offer an online version of their brokerage services. If so, they may give you a significant discount for using the online brokerage instead of the regular brokerage services.
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Fill out an online application for a brokerage account. You must apply for a brokerage account if you don't already have one. An online brokerage account requires you to provide the brokerage with the same information as you would give them for an offline account. You must provide your name, Social Security number, home address, work information and how much money you intend to invest. You may also be asked about your investment experience.
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Deposit money into your brokerage account from your bank account. Many brokerages allow an automated clearinghouse (ACH) transaction. This will automatically transfer money from your bank account to your brokerage account. If your online broker doesn't offer this or won't allow you to do this for your first deposit, then you must send a check or money order drawn on your bank account to begin trading.
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Purchase the commodities you want to purchase. Some brokers sort investments by type. Find a "commodities" tab or link in your brokerage firm's website once you've logged onto your account. Here you'll be able to buy and sell commodities.
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Tips & Warnings
Use money management. A good rule to have is to only risk 1-2% per trade. Always use a stop loss. Trade in Simulator. You should always begin by trading in a simulator. Not with real money. You can find one at 500Plus.com
