I wish to learn how to trade in commodities market.?

Answer 1

Be aware, extremely aware, of the contract size. For instance, the price of oil is quoted around $59 per barrel. But one contract is for 1000 barrels. Thus, if you buy a one lot, you are buying 1000 barrels, even though the price is quoted per barrel. If the price drops to 58, you lose $1,000.

Also, futures contracts are marked to market. That means the brokerage house takes the $1,000 out of you account when the market closes. This is unlike a stock, where losses are not realized until you sell.

Lastly, watch your expiration dates and make sure you are trading the "front" month. You can usually tell by the volume and open interest.

Remember, leverage slices two ways. If dancing in a minefield isn't your idea of fun, find a different way to make money.