An individual who Trades Commodity Contracts on the floor of a commodity exchange. When executing trades on behalf of a client in exchange for a commission he is acting in the role of a broker. When trading on behalf of his own account, or for the account of his employer , he is acting in the role of a trader. Floor trading is conducted in the pits of a commodity exchange via open outcry.

Reader Questions

How much money do I need to start trading commodities?

Studies have shown that the more money you have to trade, the better your chances of success. While some vendors (who want to sell
you something) suggest you can trade with any amount you may have, most experts agree that with less than $10,000 your success depends
on luck. You just don't have enough to diversify and apply proper risk management principles. If you do not have $10,000 in risk capital, you should stay in ""learning mode"" and paper trade until you do."

Are options a good way for a low-capitalized investor to try commodity trading?

Absolutely not. Buying puts and calls is a sucker play very similar to casino gambling. You can win in the short term, but the more you
buy puts and calls, the more you will eventually lose. When you buy a put or call, only a professional trader or a floor trader will be selling
it to you.
They do not sell unless the odds are in their favor.

What kind of returns should I expect from trading?

Risk is always commensurate with reward. If you are trying to "get rich quick," the high risks you will have to assume will probably
break you. Commodity trading is not inherently risky. It is only as risky as you want to make it. Most people bust out because they can't
control themselves and the urge to gamble. A disciplined person trading a solid, trend-following system with sufficient capital to diversify
can reasonably expect consistent returns of 25 to 50 percent a year with draw downs of 15 to 30 percent.

Recommended Resources on Commodity Traders

A Maniac Commodity Trader's Guide To Making A Fortune: A Not-So-Crazy Road map to Riches (Hardcover)
by Kevin Kerr

Commodity Trader's Almanac
by Jeffrey A. Hirsch (Author),John L. Person (Author)

Useful Links

http://commodities.about.com/od/commoditytradingsystems/Commodity_Tradin...
http://commodities.about.com/od/gettingstarted/a/commodityrecord.htm
http://commodities.about.com/od/onlinetrading/a/online_trading.htm
http://commodities.about.com/od/managingyourportfolio/a/commodity_man.htm
http://www.thepitmaster.com/otherresources/interestinglinks.htm
http://www.investopedia.com/terms/c/commodity.asp
http://www.commoditytradingschool.com/index.php?option=com_content&t

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