Commodity trading offers several opportunities as commodities are fundamental assets for global economic development.

Choosing the most profitable commodity (or the one with perhaps the most ‘predictable’ trend) is the evergreen niggle of every investor – whatever the final target and the motivation for which they decide to approach this large market. The risk component, typical of trading, is always there. For this reason, the first simple question an investor should ask themselves is – what are the commodities to trade and invest in?

In addition, their high price volatility compared to other financial instruments makes it even more important to have a thorough knowledge of the markets and of the multiple factors that may cause sudden changes of direction.

However, it is possible to analyse such commodities which may lead to interesting results if appropriate instruments and indices are used – from oil to natural gas and coal, as well as metals such as gold and copper, or palm oil, coffee, and sugar.

One of the most widely used indices that represents a good benchmark for any investor is the Commodity Channel Index (CCI). This is an index based on commodity price fluctuations over a given period. Understanding the data may help you interpret the trend, and this makes sense especially if you can correctly read the value.

In the next articles we will get deeper into how to approach this world of opportunities. If you wish to learn more and, above all, to receive a tailored training with specialist advice, feel free to get in touch at registrations@profinanceinstitute.com.