Those who have trade in commodities will clearly understand level of volatility and risk involved in it. Usually commodity trading is opted by those who can afford a turnover which is higher than 1000$. There is no upper limit to investment in commodity trading but yes the lower limit will not go below 1000$. Introduction of commodity trading in Binary option has attracted many people towards commodity trading.
It is mainly due to the fact that you do not require any margins to do commodity trading in Binary Options. Though, rules remain the same that trade expires below/above the purchase time in fixed interval of time. When I started doing commodity trading in Binary options I had my own lessons to learn and many experiences waiting for me on the way.
Do your homework before you start commodity trading in Binary options!
With prior experience in commodity trading I always knew the importance of market analysis required in it. But when I started trading in Binary options I realised that it will be very difficult to achieve success if you do not understand the price fluctuation and market volatility in commodity trading. Novice should not lay their hands on commodity trading in Binary options. Apart from that you should also have technical knowledge and market analysing skills. Since Binary option is a short term investment, technical knowledge plays a crucial role in taking right decision at right time.
High the gains, higher the loss!
My personal experience has taught me that commodity trading in binary option can fetch you huge profits ranging from 80 to 85 percent of your investment. At the same time a loss can take 85 to 90 percent of your investments. Making the right call at the right time for a particular commodity is very important. I will personally advice to take some expert guidance if you are not able to figure out things all by yourself. Since huge amount is at stake and that too in a very short time, it is advisable to play safe. I have seen many people taking impulsive decisions looking at huge profit prospects, but it can also lead to loosing the entire money.
Being updated is very important!
Weekly reports of commodities like oil, natural gas etc. are released by various authorities on particular days of the week. You should do extensive research of the commodity you are interested in and find out the day on which the report is published. What I have learned from my experience is that you should not do trading a day before or on the day on which the report is published. The commodity market is most volatile at that point of time. You should wait for the report to hit the market and then judge the mood of the market to make the call. Any information regarding the commodity should be kept in mind as it can play a critical role in deciding the fate of your call.
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