There are also options and futures trading or currency trading and commodities trading. The commodities market has four categories that it trades in. These categories include Energy, metals, livestock and meat, and agricultural produce. It can be very different from how investors invest in stocks, bonds or other securities. The price of goods on the commodities market are influenced by different factors like market demands and technological advances, which are just a couple of examples. The prices are driven by supply and demand, and anything that could hamper the supply will impact the prices.
Commodities trading on metals such as gold requires caution, as it can be risky for an investor to invest in one particular metal. Research should be done before buying up gold, as the price could be too high and with a recovering economy, investors may start to sell gold and return to investing in the stock market. This could see the price of gold decline. If you are looking to buy gold, look to invest in Gold ETFs. These funds will have many companies that deal in gold and will make your portfolio diversified, thus enabling you to spread the risk.
Energy is a good area to get involved in, with news of oil running out, the demand for oil continues to push the price of oil up higher. There are a number of factors that you should watch for that can cause prices to decline. Reduction of oil wells and more emphasis on clean energy such as solar or wind energy could affect the rising prices in oil. You can stock pick oil companies while you are involved with commodities trading. If you are new to the commodities market, you can search for a broker who specializes on commodities. He will be able to provide you with advice, and also give you stock tips so that you can invest on the stock market as well.
They can do technical analysis and provide you with chart analysis of the commodities chart. Make sure that you try to find a broker who will not charge excessively high commissions for stock picking, and that they are also able to provide advice on commodities trading. You can find more information on the commodities market through books or a stock market video. Make sure you are familiar with the risks you may encounter when involved in commodities trading.