Is commodity CFD trading suitable for the Forex beginners? | 90% + of the retail Forex traders lose according to many websites and we are sure that maximum people in those 90% are commodity traders, lets analyses these commodity trading whether they are suitable for new retail Forex traders or not.
New Forex People who are not practiced well at the demo will lose more in fx market against the market makers and the other retail investors as a result they will quit and maximum of people won’t return. This CFD commodity trading are second category for the traders who are good at demo account and got profit in currencies and moved to commodity.
Unlike the majors and currencies commodity are different more traders lose here due to high market volatility and these market will change in time to time based an supply and demand of those commodity. This commodity Forex trading may eat your Forex account if your are not aware of it fully and proper money management method. In-case if there is no negative balance protection from your broker side you may need to pay the amount that exceeds your trading account for compensation.
Jumps are unavoidable in commodity trading overnight jumps are possible, Even if you enabled stop loss it won’t save you (we may see about this stop loss not working in MT4 and Mt5 in upcoming articles.) These in candlesticks may give you heart attack for sure. For example if you made a trade on yesterday night and went for a peaceful sleep in overnight anything can happen in commodity even your CFD is trading in low volume at night it can make more high impacts over night. As a result you may see jump in your opposite side and in weekends and futures roll over you usually see good jumps in prices.
Some futures will give contract closing options at the end of contract closing which is a head ache if your trade went in wrong direction during contract closing. At that time you have only two options cut the loss or cut the account. Some times it may rage towards your trade line and make you more confuse. Anything is possible in commodity market all analysis like technical, news and fundamental need to be analyzed before and after the trade think twice before entering in commodity.