The development of the global economy is uncertain, and it is very difficult to make accurate predictions. But especially in volatile markets it can be worthwhile to do day trading. Instead of focusing on long-term trends, one speculates with a very short holding period, for example just a few minutes.
Instead of focusing on stocks or on Forex, you can also trade commodities online. Commodities such as gold serve as a “safe haven” in times of economic uncertainty and are often used as an investment. And many FX brokers also offer the possibility to trade raw goods and precious metals.
What is Forex?
Forex is an abbreviation for Foreign Exchange Market, the trading of currencies. Forex is the largest and most liquid marketplace in the world, on which you can trade 24 hours a day. The daily volume amounts to approximately 4 trillion U.S. dollars.
Advantages of Forex Trading
Forex Trading has many advantages compared to the traditional stock trading. One is the so-called leverage effect. It can be used to move for example 200-times the invested capital. With such a leverage, it is possible to use the amount of 500 EUR for a EUR 100,000 deal. Also an advantage of the leverage is the duration in which one can achieve high yields, which in stocks would be unlikely to achieve. High profits can be achieved with a small in a short time. However, the risks are correspondingly greater, and the vast majority of traders make losses instead of profits.
Why Invest in Commodities?
Raw materials are very important to us. Through them we heat our homes, through them we have food and thanks to them we can drink our morning coffee. Commodities are just indispensable. Many of them fulfill our basic needs, which is not the case with stocks. The potential of commodities also shows up when investing money. Also when the prices of securities are falling, you can achieve profits with commodities. The best known example is the gold price, because this raw material is a kind of safe haven in uncertain times.
Bankers, industry experts or retail investors – no one them can foresee the future. If you ask them for a prognosis, they are helpless and are unwilling to give you any information regarding the future. Unfortunately, it is fact that earning money with stocks has become more and more difficult. For many investors, currently the only investment on which you can rely on seems to be gold.
Maybe you have the same opinion. But do you want to go to a gold dealer and then buy expensive gold to hoard it at home? There is a cheaper and more comfortable alternative: trading gold at a Forex broker.
But there are also other commodities apart from gold. Coffee, gasoline, corn, cocoa and wheat are also commodities in which you could of course invest. And if you expect a declining demand for commodities, such as due to poor global economic conditions, then you can also earn money by speculating on falling prices of raw materials at a Forex broker.
Tip: Check out the broker Plus500 now. Here you can trade a variety of commodities online and can get started with a free demo account (76.4% of retail CFD accounts lose money).