Did you know that commodity trading is a very potential and increasingly popular type of trading? The MT4 platform is a reliable playground that provides you with many tools and skills to be ready to trade this item. So which type of commodity has the highest profit potential? Which type of commodity should you invest in? How to add commodities to MT4. Follow us to answer each question one by one right after this!
What is commodity trading?
How to add commodities to MT4 crude oil, gold, or coffee are all things you often hear about, right? These are typical examples of commodities. Commodities are real, tangible assets that can be bought and sold on the market and are used by us every day. Therefore, commodity trading is considered a diverse and volatile investment opportunity.
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Brief history of commodity trading
Commodity trading is an ancient commercial activity that has played an important role in the development of civilizations, and has undergone a strong development thanks to the support of transportation technology and the emergence of exchanges. Since ancient times, people have exchanged goods to meet their living needs. However, it was not until the strong development of transportation technology in the 19th and 20th centuries that commodity trading reached a global scale. The sharp decrease in transportation costs and the standardization of trading contracts have facilitated the purchase and sale of goods on a large scale.
The main factors that have promoted the development of commodity trading
- The advent of transportation technology in the development of railways, steamships, and containers has significantly reduced transportation costs, facilitating the trading of commodities on a large scale.
- Commodity exchanges have provided a standardized environment for trading different types of commodities.
- Global economic integration has promoted the demand for commodity trading between countries.
Why should we invest in commodities?
- Investing in commodities helps us diversify our investment portfolio, spread risks, and not rely too much on the stock market.
- History has shown that commodity prices often increase over time, helping you protect the value of your assets.
- Commodities are considered a profitable investment channel that can bring attractive profits, especially during periods of market volatility.
Characteristics of the commodity market
The commodity market operates on the laws of supply and demand, like a balance. When demand for a good increases (demand increases) but supply is not enough to meet it (supply decreases), the price of that good will increase. Conversely, if too much of a good is produced (supply exceeds demand), the price will decrease. And the low correlation with the stock market feature helps you diversify your investment portfolio more effectively. In addition, the commodity market offers diverse trading opportunities with many products for you to choose from, from precious metals, energy to agricultural products.
There are many factors that affect the supply and demand of goods, such as:
- Unexpected events such as epidemics and natural disasters can disrupt supply, pushing up prices.
- Economic growth in countries, especially developing countries, is often accompanied by increased demand for raw materials and goods. This can put pressure on prices.
- Advances in production and transportation technology can change the supply and demand of many goods.
Top Trading Volume Commodities
Here are the essential how to add commodities to MT4 that are traded in huge quantities, ranking first in the world:
Brent Crude Oil
Brent Crude Oil, mainly extracted from the North Sea, is a high-quality crude oil, traded most widely in the world. It is an ideal source of raw materials for producing high-quality petroleum products such as gasoline and diesel.
The price of Brent Crude Oil affects oil prices worldwide, from gas stations to manufacturing plants.
Because the supply mainly comes from the North Sea region, Brent Crude Oil prices are often greatly influenced by geopolitical events in Europe and the Middle East.
WTI Crude Oil
WTI Crude Oil is one of the high-quality crude oils, traded most widely in the world. It is used to produce gasoline, diesel and many other petrochemical products. Therefore, WTI oil prices have a great impact on the prices of goods and services, as well as the global economy.
The United States is one of the largest crude oil producers in the world, helping to ensure a stable supply to the market.
Natural Gas
Natural gas is an important source of energy for daily life, used for heating homes, cooking and generating electricity. Therefore, the demand for natural gas is always stable and can increase.
Natural gas can be transported through pipelines and stored in underground tanks, helping to ensure a stable supply. Compared to other fossil fuels, natural gas is considered cleaner and more environmentally friendly. Natural gas prices often fluctuate seasonally and are affected by many factors such as weather, production and geopolitical situations.
Gold
Gold has long been considered a symbol of wealth and power. Gold’s ability to hedge against inflation and economic fluctuations has made it a safe haven asset that many investors trust. While gold prices can fluctuate in the short term, over the long term, gold tends to appreciate over time.
Silver
In addition to being used in jewelry and household items, silver has many industrial, medical, and technological applications.
Silver’s scarcity makes it a valuable precious metal that investors seek out.
Copper
Copper’s history is intertwined with the development of humanity, from its use as currency in ancient civilizations to its role as a key ingredient in the industrial revolution as a raw material for everything from electrical wiring in homes to complex circuit boards in mobile phones.
Chile, with its vast copper reserves, remains the world’s largest copper producer.
Coffee
Coffee is one of the most popular stimulants in the world, produced from the beans of the coffee plant. Arabica coffee beans, with their delicious flavor and high quality, are more highly valued than other types of coffee beans.
Brazil, Vietnam, Colombia are the world’s largest coffee producing countries, each with its own unique coffee varieties and flavors. Factors such as weather, disease, and consumer demand all affect coffee prices
Sugar
Sugar, one of the world’s most popular sweeteners, is produced from two main sources: sugarcane and sugar beets. Sugarcane, with its superior yield, accounts for the majority of global sugar production. Countries such as Brazil, India, and China are the world’s leading sugarcane producers.
Sugar prices are affected by many factors such as production, consumption demand, government policies, the role of exchanges
Cocoa
Cocoa, the main ingredient for making chocolate – one of the most popular foods in the world. Because cocoa only grows well in humid tropical climates, mainly concentrated in West Africa and some areas of Latin America. Growing and harvesting them is often done by small farmers, requiring a lot of effort and technique. This makes cocoa production susceptible to factors such as weather, epidemics and political fluctuations. Each cocoa contract is equivalent to 10,000 tons, helping to create a vibrant and transparent trading market.
Cotton
Cotton is often called “white gold”, and is one of the most important agricultural commodities in the world. Not only is cotton a major raw material for the textile industry, it is also widely used in other industries such as paper production, food (cooking oil, animal feed) and even plastics production. India, China and the United States are the “big guys” in the cotton production industry, supplying a large amount of cotton to the global market. Each cotton contract is equivalent to 50,000 pounds, creating favorable conditions for investors to participate in this market.
How to add commodities to MT4
Want to trade gold, oil, or agricultural products on the MetaTrader 4 (MT4) platform? The first thing you need to do is how to add commodities to MT4 these items to your watchlist. Let’s follow these steps:
- Step 1: Open the MT4 software and find the “View” menu in the top corner.
- Step 2: Click on “View” and select “Symbols” (or press Ctrl+U). A new window will appear.
- Step 3: In the “Symbols” window, you will see a list of available assets. Find the items you want to trade (eg: Gold, Oil, Corn…).
- Step 4: Click on the name of the item and select “Show”. This item will be automatically added to the “Market Watch” list on the left side of the screen.
- Step 5: Repeat steps 3 and 4 for all the items you want to add.
- Step 6: Once done, you can close the “Symbols” window.
After the above steps, you can easily track the price fluctuations of items in the “Market Watch” list, draw a chart by double-clicking on the item name to open the chart and do technical analysis. How to add commodities to MT4 when you have made a decision, you can place a buy or sell order directly on the chart.
Commodities Trading Tips
- Find the right market: When a trader chooses the right platform that meets their needs and trading style, they will certainly find it easier to execute their strategies effectively and the path to success will be shorter.
- Specialization: Most successful commodity traders often focus on one or a very small group of markets, such as gold, coffee or crude oil. Because when you only focus on one market, you have enough time to research thoroughly, grasp the factors that affect prices, from weather fluctuations, economic policies to market psychology, helping you control risks better. Over time, you will accumulate a lot of trading experience, recognize market signals and build your own effective trading strategy.
- Trend trading: The prices of commodities such as oil, rice, corn often increase or decrease over a long period of time.
For example, oil prices can increase continuously for many years, then decrease sharply in the following years.
Successful traders often take advantage of this by buying when prices are rising and selling when prices are falling. This strategy is called trend trading. It is considered the least risky and most stable strategy.
- Take advantage of the seasonal law: one of the special factors of the commodity market that traders need to pay attention to is the season. Unlike other types of investments, the prices of many commodities often have very clear seasonal cycles.
For example, the demand for natural gas and heating oil increases in the winter when it is cold, but decreases in the summer.
Conclusion
In conclusion, So have you chosen which commodity to invest in? You also know how to add commodities to MT4, right? Consider carefully, start following the instructions and apply for your trading right now!
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