Because a person who wants to invest in commodity markets? The logical answer is "for money". Commodity markets are known for their work in the handle so that the small investor, it is logical to think that if you open a small account, you'll easily turn into a fortune. Therefore their jobs because of "magic" of commodity markets close. Unfortunately it is far from the truth, and if you open an account with these expectations, you have a highprobability of very disappointed in the short to medium term.
You can read hundreds of books on how the market fundamental and technical analysis, risk management, go to seminars or subscribe to a newsletter, etc. This will increase your knowledge, but it will be your success in the market to ensure that if you have the wrong ideas and expectations, when you opened your account. Your success in the market does not depend on what you do not know, but the manner in whichknowledge. If you miss the return expectations that you want, it is likely that operations evil.
I have read many articles that say that individual traders and professional most people, losing money in this market. Remember that the product market is a zero sum game, meaning that for every dollar you make, another fix of U.S. dollars. For a small investor, that his chances of making money on this or any other increase in the financial markets,some things you think before you open an account.
1) Customer Responsibilities
When things go wrong, you tend to hear things like: "I do not know what can happen", or "someone explain to me about the risks" or "I never knew that was not on that much risk in the portfolio of my account is been taken. "Since you must be of legal age to sign the forms into account, I can not understand how it can be acceptable excuse. A person who makes a book of memoirsaccount to invest in a market have a responsibility to know what happens to his money. Even if you have your money in a mutual fund where a professional fund management, we must still obtain this information by the Mutual Fund that you have read and understood. This is the first mistake that people make their investment. They do not know if their money is invested and they trust that someone else has a better ensure that funds will notitself. After a financial adviser, etc., commodities broker, stockbroker, which means that probably will work better decisions about what makes money when the customer, because it is our job. This does not mean that the customer must be the beneficiary of the money is not at least have an idea of where the money is invested and what are the risks. In other words, customers have a responsibility to know and understand the markets and products where its moneyinvest.
If you want to open an account goods, you can visit the NFA and CFTC websites and obtain precise information on this market. Except when a customer opens an account, he / she will receive the education, market information, information that the customer must read. The advantage for the customer to read this information 1) It gives you an idea of the raw materials as an investment is really for you, and 2) will help you understand that this market is not somethingwill make you rich overnight. The second point is very important because if they really understood before opening an account, you must have a greater chance of setting yourself to be part of a group of investors who do not earn money in this market.
2) We can predict the future?
Investment is the company to predict the future. If you buy low, sell high, or you sell high, buy low, you say that is (or thinks he knows) that the future price of a familyactivities will be and, therefore, is betting the future movement in order to earn money. Unless you have a crystal ball in front of you, no one knows the future.
As you can imagine, without knowing the future, the company has invested more difficult to pass. If the product market is more difficult because you have less time to be wrong. For example, if you bought a stock market and the price goes against you, unless the company fails, you can wait for yearsuntil the price goes up again and was able to sell it. So everyone in this market, said to invest in "long term", but no one tells you how long is long term. "On the other hand, the commodities market is trading in futures contracts, as is typically invests in the months ahead, because months is more liquid, you have the luxury of time yet. At the end, you close the position or role more as that is not always the bestthing to do.
Not having that much time can also work in your favor because it forces you to close your positions and realize a gain or a loss. As a client, this gives you the incredible advantage of knowing if your broker or advisor has the potential of making you money or not. Since you have to close every trade that you are advised to make, that works as a scored card of your advisor’s abilities in the market. It is safe to assume that if you open an account with a commodity broker with a reasonable amount of money (eg $ 10,000), and the first 4 or 5 is losing money, which means that it is probably better to close the account and move elsewhere. I'm not saying or implying that a broker may have 4 or 5 or more consecutive losing is not. All lower invoke are part of society, but for a customer to have the potential to make money in this area is more sensitive when they opened their account through the first sectors as a scorecardthe brokerage company or potential.
As I said before, is the business of predicting the future. I always tell my clients that because I do not know what the future will hold, there is a greater chance of being right on price movement over the next 2 or 3 days than for the next 2 or 3 months. Based on a review and analysis, when you make a trade, or give a recommendation, you do it because you think you are right and make money. With few exceptions, the marketI say in a very short period if you were right or wrong. This means that in the first trading day that will make or lose money. If you earn money, you let it run until the market takes you out. If you lose money to trade, wait until your order stop-loss is hit. Losing trade is part of society, but what is important to get yourself in the game. People make money on the commodities market is not what makes a murder inone or two subjects. Successful investors or companies, there's always money in their accounts of the next trading day.
The next section of this article, I want to talk about the risks of investing and what are some of the mistakes that investors and advisors to ensure that the increased risk.
Jorge Malo