How to Become a Commodity Trader
With over 50 years of experience trading lumber, panels, steel, and industrial supplies, AIFP knows what it takes to become a successful commodity trader. Plus, we know how rewarding this career path can be. If you’re thinking about a sales career in commodity trading, here’s what you need to know. Discipline: To become a successful commodity trader, this is one of the most critical character traits. One needs to be disciplined enough to create a financial plan and then stick to it while trading. Financial limits need to be kept in mind while taking risks in the market. Without discipline, you might just lose all you have in the market.
We accumulate trading information — buying books, going to seminars and researching. Fear starts setting in. We start to understand that trading success fully is going to take more time and more knowledge then we anticipated. We take a sabbatical from trading to develop and research our trading rules. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. We add, subtract and modify rules as we see a need to be more proficient with our rules.
We go back into the market and continue to donate. We start to take responsibility for our trading what are the benefits of glucosamine sulphate as we understand that our success is in us, not the trade methodology. As we trade we still have a tendency to violate our rules and our results are erratic.
Our trading results are getting better, but we are still hesitating in executing how to become a successful commodity trader rules. We begin to see that our lack of success is within us a lack of discipline in following the rules because of some kind of fear and we begin to work on knowing ourselves better. We stop thinking and allow our rules to trade for us trading becomes boring, but successful and our trading account continues to grow as we increase our contract size.
My trading, I feel is currently at number I continue to learn my lessons from the market, but allow my system to direct my trading. There is no way to eliminate losing trades, but from a statistical standpoint letting the system work has proved to be consistently profitable. There what is the purpose of variables in a spreadsheet always room for improvement and I am always learning new things about the market and myself.
I read the 38 steps, and wow, is it spot on! However, when I found out I wanted to be a scalp trader for the e mini,I dove right in trying to find a school, that would teach trading.
Can you direct me, to some very specific books, or a class that you are familiar with, that will help me build a successful trading plan? I truely hope to hear from you in the future. I wish you the best of luck, in all your endevors. Sincerely, Bryan Carley- of Michigan. Really it comes form developing the right mindset. A clear objective mind is what I feel keep most traders from being successful. The more trade setups I take the more data I have to determine if there are other small tweaks I can make.
In essence it becomes a game of, Jenga, what can I take away while still preserving the core. Congratulations Gigi on your success thus far and to your continued success in the future. Sometimes there are lulls or slow periods where setups are less prevalent, but that just calls for being patient and waiting for your setups to arise. Riding the same system through the cycles is important, but I also keep detailed records and if the markets show signs of substantial change then you have to adapt.
Very well summarized…. We know we are close. Tim, I am fast becoming a big fan of you, your teaching style and your methods. As I am studying, I am kinda surprised that no one so far has what is the fluid portion of the blood called out that there are two 29s. Ha, good catch! No one has ever pointed that out. Become a Successful Trader. March 1, 38 Steps to Becoming a Successful Trader. Where are you on the list? We accumulate more information.
We switch the commodities we are currently following. We switch commodities again. We search for more trading information. We trade our methodology with some success, but realize that something is missing.
We begin to understand the need for having rules to apply our methodology. We continue to trade and become more proficient with our methodology and our rules. We go back and research our rules. We build the confidence in our rules and go back into the market and trade. We continue to trade and the market teaches us more and more about ourselves. We master our methodology and trading rules. We begin to consistently make money. We get a little overconfident and the market humbles us.
We continue to learn our lessons. We are making more money then we ever dreamed to be possible. We go on with our lives and accomplish many of the goals we had always dreamed of. Get My Top 5 Trading Tools.
Join over Plus get my top 5 trading tools and 3 free chapters of my Trading Rules eBook. We hate spam. Your email address will not be sold or shared with anyone. About Tim Racette Tim is a full-time trader in the futures and stock markets and founder of EminiMind.
Bryan Carley April 21, at pm Reply. Tim Racette April 21, at pm Reply. Gigi April 23, at pm Reply. Tim Racette April 25, at pm Reply.
Tim Racette May 12, at am Reply. Brent August 4, at am Reply. Hi Tim, did you suffer big draw downs through this learning period? Tim Racette November 28, at am Reply. Rufus November 30, at am Reply.
Tim Racette November 30, at pm Reply. Sk June 18, at pm Reply. Rahul Gopi July 23, at pm Reply. I am at It is always good to look back and review where you are with your goals. Tim Racette July 23, at pm Reply. Chris July 21, at pm Reply.
Was that typo in the original newsletter too? Tim Racette July 21, at pm Reply. Leave a Reply Cancel reply.
What is a Commodity Trader?
Feb 11, · Becoming a Licensed Commodity Broker Every commodity broker must be licensed and registered with the National Futures Association (NFA) as an "associated person." To get that license, the applicant must pass a test called the Series 3 examination. The outline form for the test can be found on the NFA website.
Here, you will get to know about the step by step process or golden rules to become a successful commodity trader.
While commodity trading started in the ancient civilizations, the modern-day commodity market is something entirely different. Due to the digitalization, everything is online now! Now people do not need to carry physical commodities and go around to exchange. Just with the use of web or mobile, the trades can be executed in a regulated global market.
This revolution is attracting a number of traders to try their hands in the commodity market. In order to become a successful or pro commodity trader, one needs to have the following attributes:.
Discipline: To become a successful commodity trader, this is one of the most critical character traits. One needs to be disciplined enough to create a financial plan and then stick to it while trading. Financial limits need to be kept in mind while taking risks in the market. Without discipline, you might just lose all you have in the market. Self-control: Greed is the biggest problem in the market.
The desire to get more usually makes one lose what they already have. A prudent commodity trader calculates his risks and rewards well and keeps a strict check on his greed. Awareness: You cannot trade in a market you do not know anything about. Thus, it is essential to keep yourself updated with the happenings around the world.
Since the commodity market operates on a global level, a successful commodity trader keeps himself updated about all significant international events that might affect the market. Curiosity: To become a pro commodity trader, one needs to have the curiosity to find more. There might be a set strategy that works for you, but there is no harm in learning about more. Patience: No trader becomes successful in a day or a week. It takes time for you to find your comfort in the market. You need to be patient enough to learn the market before stepping into it.
Also, after entering, you need to show a lot of patience and perseverance to earn profits! If you think you possess the above traits, then here are some golden rules you need to keep in mind to become a successful commodity trader:. It is not important to take every trade or even trade everyday. You need to keep a check on your financials and take limited risk only.
If you are not sure about what the outcome of a particular trade will be, then you should avoid it. Being unsure would make you more skeptical, and there is a very high chance that you would end up in losses only. No trader, no matter how experienced or successful, always ends up in profits. If you are unable to cope up with losses, either mentally or financially, then it is better to refrain from entering into the market. Like any other market, the commodity market is bound to give you some losses in your trading journey.
Staying in the market after the trend is exhausting, be it bullish or bearish movement, will only lead to losses. You need to be aware of what the market tells you! This is one of the most common mistakes new traders make in the market.
However, a successful trader waits for a trend to develop before entering into any trade. Unless you are confident that the commodity will rise in price after hitting bottom, you should not take a buying position! Such inaccurate and hasty trades will only give you losses. Margin calls need to be taken as an ultimate stop loss. This situation arises when your trade position weakens considerably. It is often difficult to get out of a trade. Mostly this happens because of the greed of earning more.
However, when this happens because of a wrong trade, the situation is worse off. People have a problem admitting they were wrong, and they continue in the market with the hope that the trade will turn in their favor.
This is the worst trading mistake you can make in your career! If you get a margin call, admit that you made a wrong decision, and exit the market with a lesson. Do not answer the margin call. It is impossible for a trader to keep track of the fundamentals, technical and news updates about so many markets and so many commodities. Hence, it is always advisable to find the ones you are comfortable with. And then stick to the same! One needs to control their greed and do only as much as they are capable of.
Trading requires time and effort, so enter only in so many commodities that you can handle. No successful trader trades in the market using a hit and trial approach. The markets can be a highly stressful situation, so you need to have a plan in mind before entering.
You cannot find your suitable plan in a day or a week. A successful trader needs to be patient enough to find something that works for them! Most of the time, your emotions and your plan would not match, but you should always stick to your trading plan. Emotional temptations and stress will only cause losses in the market.
This means you need to learn to cut your losses and let your profits run. Even by being less right than wrong, if you are able to end in green, then you can indeed call yourself a successful trader! However, in thin markets, there is an inadequate number of buyers and sellers.
Hence, the trades are not very successful or profitable. It is always better to avoid such markets. Here are most important rules you must follow, if you want to become a successful commodity trader. Every person who enters the commodity market aims to become a successful trader. However, the journey from a beginner to a successful trader is a tedious one. One needs to be highly dedicated to this.
The rules mentioned above are the basics which you need to keep in mind to fulfill your aim of success. Apart from this, it is always advisable to keep yourself up to date with all the latest technologies and happenings in the field.
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