Commodity investors hire a commodity broker to help with their trading. Others will invest in commodities on their own then use an online broker. It is in the best interest of new traders to find a full service commodity broker who can help them learn the mechanics first of the markets and achieve profits.
- A broker does a lot of research on the markets, so they are able to spot regular trading opportunities that new traders miss.
- Many new traders will get caught-up in the emotions of the markets and get reckless with their trading. This is a main reason why investors lose money in commodities. A commodity broker’s job is to provide you with a trading plan and make certain you to stick with it.
- Experienced commodity broker provides invaluable advice on the markets, accelerating your learning curve.
- A broker can prevent you from making a lot of the foolish mistakes that new traders are prone to making.
- The major concern of most commodity investors are the funds. When you hire a broker, you have no certainty if his/her clients consistently make money. Commodity brokers will not give you a track record of client performance, as it is almost impossible since every client might have a different trading strategy.
- Commissions for full service commodity brokers are higher than online brokers.
- The broker might make bad trade recommendations and consistently lose you money.
- Commodity brokers typically have many clients and they are usually prospecting for more. Therefore, how much time can they devote to you? It’s a common complaint in the industry that brokers do not communicate with their clients enough.
New commodity investors are usually better off hiring a full service commodity broker. Take the time to evaluate a broker thoroughly before you open an account. And, if you are not satisfied with a broker you hire, do not be afraid to look elsewhere. Remember it’s your money not the brokers.
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