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Let Your Commodity Trading Profits Run

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  • 04 February 2010 3:36 PM GMT
By: Hillel Fuld
The fundamental principles of trading are actually very similar across all markets. The name of the game in the Forex market as well as the commodities trading arena is not to never lose. If you think you are never going to lose, or if you are unable to emotionally cope with painful losses, trading is not for you.

The object of the game is to find a broker, in this case a commodity broker, lose as little as possible, ride your profits, and stop your losses. At the end of the day, if your profits are greater than your losses, you are a successful trader. In commodity trading, just like in Forex, you cannot see serious profits before you experience losses. Just like the saying goes: “No pain, no gain”.

It really does not even matter what percentage of your trades are wins and what are losses. Just like in a card game, the amount of hands you win will not ultimately determine your standing, it is about how much losses you have accumulated as opposed to profits.

In commodity trading, many experts will tell you that you should let your profits run, do not stop them while they are ahead. Use stops like you would in Forex to avoid large losses in commodity trading, but do not use the equivalent of Take profits. In commodity trading, let your profits run.

Once again, just like in Forex trading, when commodity trading, have a plan in place, and stick to it. If you are the type that wants instant gratification, and are therefore going to close trades with small profits, you will never really be able to maximize the investment in commodity trading. You must use patience and commitment in your commodity trading, irrelevant of what you are actually trading.

Need a new Forex broker? For a fun, social trading experience, check out eToro by reading our eToro review, or for a Forex broker with helpful conversion tools, try Oanda and its unique Oanda currency converter. Let us help you find a broker that offers the services you need!

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