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This blog post tells you everything you need to know about commodities trading with the top online brokerage AvaTrade. Read on for a complete basic guide to commodities trading and AvaTrade’s outstanding trading platforms and financial tools.
What are Commodities?
Commodities are basically any raw material or food staple that can be traded on the open markets. Commodities include energy, metals, and agricultural products. Assets like Gold, Silver and Oil have a powerful allure and attract new traders all the time. They may be the best-known commodities, but less glamorous assets like natural gas, corn, wheat, coffee, and cocoa solids generate billions of dollars in annual trading volume.
AvaTrade makes it easy for online traders to trade on the world’s biggest and most highly valued commodities, as well as plenty of minor commodities and associated assets. It only takes a few minutes to register with AvaTrade, and the process of opening a new online trading account is simple. Broker affiliates should focus on the ease and simplicity of getting started at AvaTrade when they promote the brokerage.
The Benefits of Trading Commodities at AvaTrade
One of the major benefits of trading commodities at AvaTrade is the number of assets on offer. There’s an impressive index of over 35 commodities (as well as other assets like ETFs and commodity stocks). AvaTrade keeps traders connected to the global commodity markets with real-time pricing and a stream of updated market offerings. The brokerage also offers extremely attractive trading terms with competitive pricing. Traders can benefit from low spreads and high leverage:
- 8 points on Brent Crude
- 3 points on Gold
- Up to 200:1 leverage
- 5% – 3% margins on commodities
How to Achieve Trading Objectives with AvaTrade?
AvaTrade offers commodities as CFDs (contracts for difference). These are quick and convenient online trades that limit trader risk to the sum invested in each trade. CFDs can be a risky investment, but they are popular because they can potentially deliver high profits in a short timescale.
AvaTrade clients who want to trade commodities (in any volume) can follow the markets closely with real-time news feeds directly on the AvaTrade platforms and can receive updates about commodity performance and any sudden rallies or changes to asset prices. The platforms also come with a sophisticated suite of risk management tools.
These allow for automated trading with easily set stops that protect investments. Tools like Stop Loss and Take Profit allow platform users to leave open trades running without supervision. It’s possible to profit from volatile commodity markets and lock in gains while restricting any losses to an acceptable level.
Read our related blog post about broker affiliate CFD promotion
Promote Commodity Trading at AvaTrade
There’s nothing fundamentally complicated about commodity trading. Commodities are ordinary assets that follow the basic rules of supply and demand. The goal has always been to buy them cheaply and sell them at a profit. The principles of CFD commodity trading are similar. Traders attempt to predict the direction in which a commodity price will move and profit from the difference in the opening price of a trade and the closing price. AvaTrade offers several advanced trading platforms, including the prestigious MT4 and MT5 platforms and mobile apps that are ideal for commodity trading.
AvaTrade helps traders who want to trade commodities with detailed tutorials about all the different factors that influence commodity supply and demand – and pricing. Broker affiliates can add high-value educational content to their websites and create separate resources to explain associated aspects of trading like spot prices, options contracts, shares, and ETFs. It’s worth investing in educational site content, both for its SEO value and as a conversion tool.
It’s also a good idea to focus on commissions, spreads, and pricing at AvaTrade. One of the advantages of the broker is that they not only offer competitive trading conditions but also deliver a high level of transparency. If your goal is to attract high-value traders or experienced investors who want to trade commodities, you’ll need to break down the associated costs for them. Your broker affiliate manager will be able to provide all the relevant information.
Trade Commodities at AvaTrade
The essence of commodity trading is speculating on the prices of raw materials that are essential for human existence. Traders have speculated on food staples like corn and wheat for thousands of years. In modern times, Oil has become the lifeblood of the global economy. Oil, Gas and Gold can all be highly volatile and can create huge profits for traders who understand the markets.
Commodity trading used to involve either buying physical assets – gold bullion, barrels of oil, or bushels of wheat – or buying futures. Now, traders can open CFD positions on over 35 different commodities.
- Open an AvaTrade account.
- Deposit trading funds.
- Practice trading with a demo account.
- Identify assets and conduct fundamental and technical analysis.
- Open positions and develop new trading strategies.
There are three broad categories of commodities:
- Metals
- Energies
- Agriculture
They all have different levels of risk and volatility. Even soft commodities like coffee and wheat can surge in value if a harvest fails or the supply chain is disrupted. Broker affiliates can also include commodity stocks in their campaigns. Traders are often fascinated by the possibilities of indirect market exposure and are keen to learn more about commodity-linked stocks like BHP, RIO and VALE, whose value can mirror changes in the commodity markets.
You can also promote commodity exchange-traded funds (ETFs) that offer a consolidated approach to commodity investment. An ETF is basically a basket of similar assets that trades like an index. The best-known commodity ETF is the SPDR. An ETF can often offer a more stable, lower-risk investment opportunity.
Learn more about how to promote ETFs as a broker affiliate
Understanding the Commodity Market Dynamics
Smart commodity traders spend a lot of time studying the diverse factors that influence commodity prices. Broker affiliates can also focus on these factors in their marketing campaigns.
- Seasonal demand, e.g. increased oil and gas consumption in winter
- The success of harvests with soft commodities like cereals and soybeans
- The effects of wars, conflicts and political events on metals and energies
Traditional commodity trading could be highly rewarding but incurred all kinds of costs, expenses and logistical problems for traders who bought and owned physical assets. Online CFD trading is much simpler and involves almost zero responsibilities and commitments beyond an initial cash investment.
When you trade commodities as CFDs, you can leverage your exposure (up to 200:1 with Gold), hedge your portfolios, and make quick and convenient trades. It’s possible to make millions trading commodities without ever owning a single asset!
4 Major Commodities Markets
Most people who trade commodities are active in four major markets, as well as stock/ETF investments.
- Spot
- Futures
- Options
- Forwards
Broker affiliates generally focus on promoting CFD commodity spot trading. It’s the simplest and most popular form of trading, especially for beginners. The respected AvaOptions platform offers options for Gold options (although it’s essentially a forex-focused platform).
AvaTrade provides some excellent tools for commodities trading, starting with resources for fundamental and technical analysis. These include the economic calendar, which is a great starting point for any newcomer who wants to trade commodities. The best form of fundamental analysis for commodities is a strong grasp of current affairs. You can get this simply by following the news and building an understanding of how geopolitical events affect asset prices.
Technical analysis uses financial charts to study the past performance of a particular analysis in an attempt to predict its future performance. When you promote commodity trading, focus on Trading Central. It’s an outstanding resource for technical analysis. You can also feature Trading Signals in your campaigns. It’s a highly effective tool that provides alerts and recommendations based on advanced technical analysis.
Begin Your Commodity Trading Journey with AvaTrade
Broker affiliates often overlook the basic requirement to guide leads through the actual registration and conversion process. If you want to earn high commissions as a broker affiliate, don’t forget to emphasise the simplicity and convenience of signing up to trade commodities online.
- Register and create an AvaTrade account
- Verify the account and deposit funds
- Use a free demo account and the Education Center
- Begin commodity trading
The commodities markets, and CFD spot commodity trading in particular, offer constant opportunities for investors. AvaTrade connects traders to the global commodity markets with real-time pricing and competitive trading terms. There are over 35 assets available via some of the world’s most advanced trading platforms and mobile apps, enhanced by analysis tools like the Economic Calendar, Trading Central and Trading Signals.
Broker affiliates can earn high commissions promoting commodities trading. You don’t need previous experience to succeed; you need ambition, enthusiasm, and a willingness to learn. If you want to aim for a six-figure income as a broker affiliate, sign up with AvaPartner now. The program has already paid out over $300,000,000 to its partners and is keen to work with talented new affiliates!
Become a broker affiliate partner now