Archives: 2007 August

For those of you who trade currency futures contracts for speculation I have a suggestion. Don’t trade them.

It’s not that I have anything against trading currencies, quite the contrary. Trading currencies is the biggest financial game in the world. No market even comes close in the value of daily trading volume.

But in my opinion if you are going to trade currencies you are better off doing it on the foreign exchange market (Forex) rather than on a futures exchange that is open just a few hours a day.

Trading the forex market offers several advantages. One is that in the major currencies the liquidity is very high. Another is that the markets are open 24/5. There is a continuous flow of pricing as markets open in Asia, then Europe, then in the Americas.

With the advent of Internet forex trading there is another tremendous advantage. Even as a very small trader you have access to extremely sophisticated trading platforms. You have a choice of web based (browser) systems or systems that you download to your computer.

The web based systems have one advantage in that you can access your account from where ever you may be as long as you have a good Internet connection. However, for the most powerful systems you will want to download software.

Another powerful advantage to the forex trader who has his account at a good firm that has the most modern trading platform is that you can not have loss over runs in your account. The software will assure that you not go into an account margin debit situation.

The New York Mercantile Exchange, Inc., is the world’s largest physical commodity futures exchange and one of the the leading trading exchanges in the world for energy and precious metals contracts.

The NYMEX has represented market integrity and price transparency for more than 130 years. Transactions executed on the Exchange avoid the risk of counterparty default because the Exchange clearinghouse acts as the counterparty to every trade.

Trading is conducted through two divisions, the NYMEX Division, home to the energy, platinum, and palladium markets; and the COMEX Division, on which all other metals trade. COMEX is best known for its trade in Gold futures contracts.

The wide range of trading markets provided by the Exchange include futures and options contracts for crude oil, gasoline, heating oil, natural gas, electricity, gold, silver, copper, aluminum, and platinum; futures contracts for coal, propane, and palladium; and options contracts on the price differentials between crude oil and gasoline, crude oil and heating oil, Brent and West Texas Intermediate crude oil, and various futures contract months (calendar spreads) for light, sweet crude; Brent crude; gasoline; heating oil; and natural gas.

The Exchange also lists NYMEX miNY™ energy futures, fractional light, sweet crude oil and natural gas futures contracts that offer smaller investors and traders the opportunity for an efficient means of participating in energy markets. The contracts trade via the NYMEX ClearPort® electronic trading system and clear through the New York Mercantile Exchange clearinghouse. NYMEX miNY™ Futures

The United States Department of Agriculture USDA collects a staggering amount of information on crop production within the US and from around the world.

While unless you are careful one can subject themselves to USDA information overload the information can be quite useful to those who take a longer term view with their commodity trading. And those are the folks who over a reasonable amount of time make the big money from commodity trading.

With climate change sure to effect the production of crops worldwide the USDA’s weather and climate pages contain information, like “Weekly Weather and Crop Bulletin” that are well worth checking out frequently.

There is also published a report named “Major World Crop Areas and Climatic Profiles that can give one a worldwide perspective on crop conditions. 

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