Trade Share CFDs for your favourite companies and 50+ U.S. stocks. Click here.
Refer a friend
Title Icon

Intermediate

Have a basic understanding of Forex, but not sure how to
level up? We have got you covered.

8 Top Commodity Trading Strategies

Commodity trading is one of the best ways to diversify your portfolio and protect yourself from losses incurred due to inflation. It helps traders take advantage of markets even in volatile conditions. It also allows traders to hedge risk in the Stock market as Commodity prices generally move against it. So, if a particular Stock starts to fall, you can purchase more of the Commodity related to that Stock to potentially make up for your losses.

What is Commodity trading?

Commodity trading is the selling and buying of commodities traded worldwide. The most common Commodities for day traders are gold, oil, natural gas, and copper. While Commodities can be traded in their physical form, they are more popularly traded as Stocks, Futures, Options, ETFs, and CFDs. Commodity trading allows you to make profits through price fluctuations in the market. Fluctuations happen due to a number of factors like demand and supply, seasonal changes, and the global economic state.

Top commodity trading strategies

1. Moving averages for commodity

Using moving averages is one of the most common strategies for Commodity trading. It is a technical indicator that takes an asset’s average price for a specific period while smoothing out irrelevant prices by taking an average price. The average is calculated by taking the Commodity’s prices over a specific time, adding them up, then dividing them by the time frame. The average price helps you identify the market trend and place trades accordingly. It also identifies ideal entry and exit points by telling you how near the open and close price of a commodity is to its average price.

Commodity Trading Graphic

2. Range trading

Range trading involves trading within a sideways market at which you can buy and sell a Commodity over a period. Most traders buy more of the Commodity at the support level and sell at resistance level. A commodity’s price only fluctuates dramatically when its global demand and supply increases or decreases. Since range trading provides us with a support and resistance price, the commodity prices between this range fluctuate very little, providing traders a stable zone to trade and making it easier for them to identify market entry and exit points.

3. Fundamental trading

Fundamental trading involves trading Commodity-specific or economic events to determine its prices. For example, if the demand for Oil increases in Canada, the price would also increase. This causes traders to take advantage and go long in the market. Fundamental trading is based on trading the news and quantitative and qualitative factors of a particular commodity.

4. Breakout trading

Breakout trading involves traders taking early positions in a commodity’s fluctuating price. It offers traders a potential opportunity as soon as its price goes beyond the resistance level or falls below the support level. By making moves at the early stages of a trend, most traders benefit from major price movements when the market moves in their favour.

  • Most breakout traders take a long position when the Commodity price crosses over the highest value of its price range.
  • Alternatively, they take the short position if it falls below the lowest value.
Commodity Trading Graphic

5. Commodity spread trading strategy

You can also trade Commodities by trading their spreads.This strategy involves buying a particular Commodity and selling a similar one simultaneously to earn profits from its spread or the difference in prices. For example, you can buy a Future of a raw commodity when its prices are low and sell the Futures of a finished product as soon as the prices are high, which could reap you profits.

Commodity Trading Graphic

6. Specialising in a single Commodity

Instead of trading multiple Commodities, you can specialise in just one. For example, you can choose Gold to trade as a single Commodity and keep a close eye on its fluctuating prices, place trades accordingly, and profit from the same. When you trade a single Commodity, it gives you more time to analyse it in-depth. It also provides you with better trading prospects by allowing you to focus on just one prime Commodity.

7. Position trading

Position trading allows you to hold a trade for a long time, like months or even years, to benefit from long-term price movements. Position traders ignore all short-term price movements and only rely on fundamental aspects of the market and long-term trends.

8. Season trading

Season traders benefit from the seasonal patterns of a Commodity by taking long and short trade positions. For example, the winter season is best known for wheat worldwide and it is generally harvested in the spring season. Traders holding wheat in the Commodities market can hold larger positions as the spring season approaches as it is expected to rise due to a surge in demand.

Start Commodity trading with Blueberry Markets

Most traders hold positions in the Commodities market through CFDs, Futures, and Options as it allows them to trade without investing the entire trade value. Blueberry Market allows you to trade Oil and Metal Commodities via CFDs on their industry-level platform.


Sign up for a live account on Blueberry Markets to start your trading journey.

Recommended Topics

  • How to Add MT4 Indicators

    MetaTrader 4 comes with several built-in and custom indicators to boost your trading strategy.

  • Top MACD Trading Strategies

    Moving Average Convergence Divergence (MACD) strategies enable traders to measure market momentum and trend strength.

  • Top Indicators for MT4

    MT4 indicators help analyse forecasted currency pair prices and place exit or entry orders accordingly.

  • How to Trade Bullish and Bearish Divergences

    Bullish and bearish divergences enable you to trade market reversals.

  • Top Support and Resistance Indicators

    Support and Resistance indicators identify price points on the forex chart where the markets can potentially reverse.

  • What is The Donchian Channel Indicator

    The Donchian Channel indicator can determine volatility and potential breakout signals in the market.

  • How to Install MT4: A Beginner's Guide

    MetaTrader 4 (MT4) is a powerful forex trading platform with a user-friendly interface and advanced analytical tools for automating trading.

  • What are Trendlines in Forex Trading?

    Trendlines in forex provide clear market signals for placing long or short orders.

  • Market Order vs Limit Order

    Market and Limit orders help execute automatic trading transactions, as per your trading preferences.

  • Bearish and Bullish Markets

    In the trading world, it is essential to be aware of the bull and bear market trends because they define the direction of the market

  • How to Read Trading Charts

    Trading forex live charts can help identify ongoing market trends, which can help you place successful traders.

  • Top Reversal Patterns For Forex Trading

    Reversal patterns provide traders with price levels at which the market can potentially reverse.

  • How to Find The Best Forex Trading Signals

    Forex trading signals are important market triggers that provide traders with ideal entry and exit price levels in the market.

  • Top Forex Trading Strategies That Actually Work

    Trading in forex, you will come across several forex trading strategies -- some more complex than the others. It is immensely crucial to start forex trading with the right strategy.

  • Scalping vs Swing Trading: What’s the Difference?

    Every forex trader has a different purpose, objective, time constraints, and investment capital. The right forex trading style for you depends on your main trading goals and requirements.

  • What are Volume Indicators

    Volume in the forex market can be used to determine the upcoming market trends. Volume indicators are forex trading indicators that can identify if the volume for a particular currency pair is high or low, providing traders with market continuation and reversal signals

  • Shooting Star Candlestick Pattern

    The Shooting Star Candlestick Pattern can identify bearish market reversals and provide traders with ideal price levels to short or exit the trade.

  • Top Trading Chart Patterns

    Predicting future currency pair prices help in confirming market continuation and reversal signals.

  • What is Slippage in Forex Trading?

    Slippages occur when a currency pair order is executed at a price different from the set market order price.

  • Buy limit vs Sell Stop Orders in Forex

    Placing buy limit and sell stop orders help employ a price control strategy on forex trades. Let's take a look at buy limit vs sell stop orders.

  • The Best Time Frame For Forex Trading

    A time frame is a designated time period where forex trading takes place. Time frames can be measured in minutes, hours, days, weeks, months and years.

  • Top Technical Indicators in Forex

    Technical indicators are a market direction signal based on the current and historical price movement of a currency pair that provides traders with future price expectations

  • Top Continuation Patterns

    A continuation pattern indicates if the current market trend is going to continue in the same direction or not

  • How to Ace Divergence Trading in Forex

    The forex market is all about timing your trades well. Divergences give traders a market reversal signal right before a price trend changes

  • How To Trade Forex With Japanese Candlesticks?

    A Japanese Candlestick is a technical analysis tool used to analyze the currency pair’s price movement in the forex market.

  • Top Momentum Indicators To Analyse Trend Strength

    Momentum indicators are technical analysis tools that determine in which direction the market is headed and how strong or weak the ongoing trend is

  • Types of Moving Averages Every Trader Should Know

    Moving Average is a technical indicator which averages out currency pair prices in a specific time period in order to accurately identify market trend reversals and support-resistance levels.

  • 8 Popular Intraday Trading Indicators

    Intraday Trading Indicators help place successful short-term trade orders in the forex market.

  • What is the Tweezer Candlestick Formation?

    The Tweezer Candlestick formation is a reversal pattern that indicates either a market top (strong uptrend) or market bottom (strong downtrend)

  • Average Directional Index

    The ADX is a strength indicator that measures how strong or weak a particular market trend is.

  • How to Use Elliott Wave Theory For Forex Trading?

    The Elliott Wave Theory analyses a currency pair’s long-term price movement in the forex market.

  • What are Pivot Points in Forex

    Pivot Points help traders identify market reversals. With Pivot Points, traders can predict the support and resistance levels of a currency pair to make entry and exit decisions.

  • Keltner Channel

    Keltner Channel is a technical indicator that provides traders with strong continuation signals and trend directions by assessing a currency pair's price volatility.

  • Leading vs Lagging Indicators

    Leading and lagging indicators help traders measure the future and current performance of a currency pair, respectively. These indicators can help make successful trading decisions.

  • What is Relative Strength Index?

    Relative Strength Index (RSI) helps traders understand how frequently the currency pair prices change in the forex market to predict the future market prices.

  • Wide Ranging Bars

    Wide Ranging Bars are strong momentum indicators that help traders understand the market direction and identify ideal entry and exit points.

  • Harmonic Price Patterns in Forex

    Harmonic Price Patterns allow traders to predict future price movements and trend reversals to make ideal entry and exit decisions in the Forex market.

  • Double tops and bottoms

    Double Tops and Double Bottoms chart patterns help traders identify solid bullish and bearish trend reversals in the Forex market, and in turn, find the ideal market entry and exit points.

  • Falling and Rising Wedges

    When you are trading currency pairs in the Forex market, it is essential to know when the market can possibly reverse. The Falling and Rising Wedges pattern help identify market reversal signals and accurate market entry and exit points.

  • Forex Scalping Strategy

    Scalping refers to trading currency pairs in the Forex market based on real-time analysis. With Forex scalping, you hold a position for a very short period and close once you see a profit opportunity.

  • Symmetrical Triangle Pattern

    Symmetrical Triangle Patterns help identify market breakdowns (price fall) and breakouts (price rise), and in turn, help you plot the entry and exit prices for profitable Forex trading.

  • Introduction to Technical Analysis in Forex

    Technical analysis in Forex trading provides you with significant market trends, reversals and fluctuations and in turn helps you long and short term trades.

  • Trading breakouts and fakeouts

    Breakout and fakeout trading enable traders to take positions in rising and falling markets.

  • Fundamental Analysis in Forex Trading Explained

    Fundamental analysis in Forex trading is one of the several methods you can use to determine the relative security and intrinsic value of a nation’s currency.

  • What is a Doji Candlestick?

    The Doji Candlestick is a pattern used in technical analyses of trend reversals in a market.

  • Moving Average: The Complete Guide

    Moving Average is used in Forex trading to compare the current currency pair pricing and where it stands with respect to the current average pair prices.

  • What is Volatility Index (VIX) and How Do You Trade It?

    One of the most popular trading markets in the world, the foreign exchange market allows investors to make quick money by trading currencies.

  • Forex Profit Calculator

    On average, a Forex trader can make anywhere between 5 to 15% of the initial amount they invested in the market.

  • Understanding markets gaps and slippage

    The foreign exchange rate reveals valuable details about particular currencies a trader wishes to trade-in.

  • What is a pip in forex?

    When trading in the Forex market, you need to have a close eye on two currencies at the same time. PIP helps you denote the change in a currency pair’s value.

  • Introduction to order types

    Order types in Forex trading determine and control how you enter and exit the market.

  • Using orders to manage risk

    Forex risk management includes a robust set of rules and regulations that protect you against Forex's negative impacts.

  • Managing risk in 7 steps

    Risk management in Forex is essential to individuals, groups of individuals, and organizations since it enables them to implement measures that help mitigate Forex risk and its negative impact.

  • Bullish and Bearish Flag Patterns

    Blueberry Markets discusses why it is essential to study the bullish and bearish flag patterns in Forex. Learn more.

Learn Icon

Advanced

Master risk management and
become an expert forex trader.
Move on to the advanced course.

Guide to Forex
Trading indicators.

Enter your details to get a copy of our
free eBook

Thank you, please check your inbox for your ebook.

Ads BG

Start a risk free
demo account

News & Analysis

Catch up on what you might
have missed in the market.

Runner graphic

Ready to trade at
Blueberry Markets?

Your best trading experience
is a click away