If you have made the smart choice to start investing in commodities, here is a very simple 5-step guide that you can follow:

1. Choose a trading platform

Begin by selecting a trustworthy and licensed commodities broker that also allows trading of a wide variety of commodities (please note that some brokers still do not have commodity trading facilities yet). The best platforms have a wider variety of commodities, tradeable at low fees and low minimum deposits. You can create an account with commodity trading platforms like ATFX in under 2 minutes. Opening an online commodity account requires new investors to give identification details like names. Then they can place a strong password which they will be using to log into their accounts every time they need to check it. This should be enough to differentiate you from other members of the same trading platform.

2. Make your first deposit

Different brokers will offer different minimum deposits to start trading commodities. Some of these start as low as $10, but you would want to have $500 or more for your time to be worth it. Choose a commodities trading platform that does not charge deposit fees on payments made in major currencies. You should also access various deposit options such as bank deposits, debit/credit card deposits and other electronic solutions like PayPal. Electronic deposit solutions or credit card deposits are an investor’s favourite because they reflect a balance instantly, unlike having to mail a cheque to the broker. In many cases, you will find that the method you used to deposit will also be the method you used to withdraw funds.

3. Research the commodities market

As you have probably been doing demo trading on commodities, you can now do in-depth research into the commodity market and pick out a few promising commodities. Research the respective market and consider coupling that with the fundamental issues affecting each commodity’s behaviour. In this case, you should be looking at what affects the demand and supply for each commodity and how their prices affect the broader economic indicators. Considering that much of the trading routine also needs psychological composure, taking time to research the market will give you more confidence when placing trades. It shows that you have made investments out of careful consideration and not out of knee-jerk decisions. Taking 30 minutes to plan and execute your trade will save you much more than having to correct trades that are going against your bankroll.

4. Choose your first trade

After you have found the preferred commodity to trade, you can time the right price so that you can enter the trade. Identify the exact ticker to see the chart and its corresponding prices. It should conform to your technical and fundamental expectations. Some technical expectations include how the price has historically reacted whenever it has reached a certain level. For example, you can check whether the commodity’s price trades at historical lows or highs. People tend to buy more of the commodity when trading at historical lows because they want to wager on the price gaining over time. It always makes good financial sense to buy low or sell high. Investors who place large trades and wait for longer periods can reap huge benefits because prices tend to make reversals when they reach historical lows or historical highs.

5. Execute your first trade

To execute the first trade, once you have the right entry conditions, select the amount of money you want to risk and invest in the specific commodity instrument. Open trade, choose the right trade size and place your order.

Once your order is placed, you must monitor whether it is in your favour. One trick experienced investors use is having a specific investment amount in mind first. Next, they will place fixed percentages of the total amount in spaced trades until the amount they had budgeted has been committed. For example, if you wanted to invest $100 in a certain position, you could begin with placing $20 trades and keep on adding towards the full $100 as the trade moves towards your predicted trend.

Finding a place to buy stocks or currencies may be a walk in the park, but it is not the same for commodities. Most brokers do not support commodity trading on their platforms. Therefore, you need to explore online brokers and find which one supports commodity trading on their platform. Even so, it would be best if you found which commodities broker offers trading positions in the commodities you wish to trade. These will also occur in different forms, such as futures or options. ETFs are a good way to trade commodities through a broker.

Assess the platforms available and consider the fees charged whenever you want to begin your journey as a commodity trader on an online platform. The fees are important because you do not want to settle on a platform that cuts off much of your profits to settle fees and commissions. Your trading experience should be fair to both you and your broker.

When you trade on the ATFX platform, you will enjoy the right charting tools and get technical indicators to help you pick out the possible trades. Technical indicators and charts let traders identify commodities trading on historic highs or lows and judge some possible recurrent trends. Investors who do not have previous experience trading financial instruments also get to download training tools and manuals that will enable them to streamline their trading and take part in thousands of opportunities that appear every trading week.

Another essential decision you must make when choosing where to trade commodities is to do with the convenience and ease of making your deposits and withdrawals. Using an online broker is faster, safer and more confidential than the physical delivery of cheques or cash to trade commodities face-to-face with a stranger. When you opt for an online commodities trading platform, you only need to deposit cash electronically in an account you manage. You can access your commodity account and monitor your balance anytime and without logistical impediments like opening hours.

When choosing where to trade commodities online, you are welcome to research and see what the platforms offer and consider as many reviews as possible. Good reviews let you conclude how well your trading experience will go.

Now that you know where to trade commodities when you are ready to invest, you need to know who you will be used to place your trades in the commodities market. A commodities broker is an institution that provides all the facilities you need to make contracts if you agree to pay a small commission. Once you open an account with a commodities broker, you will reflect in the lineup as a trader. You will then be able to trade commodities in the form of futures, options or ETFs as a commodities trader.

For all the services you will get while using a commodities trading platform, a commodity broker will receive a commission as compensation for the input. The commissions are a fixed percentage of all the trades you make from when you open a position right to when you exit your trade. Commodity brokers provide you with a smooth exchange of money and financial instruments, all in a safe and convenient environment. Therefore, they give you the best services and take a small cut of the orders you choose to execute using their trading facilities.

As a requirement, a good commodity trading institution will follow all the laid down licensing procedures and meet all the security requirements to safeguard your money. Avoid unregulated brokers so you do not end up in risky situations that will put your capital in danger.

Carry out all your commodity investment with a website that makes it easy to deposit your capital and withdraw any of your proceeds as and when you need them. For security on your broker’s part, ensure that the website has the latest security standards to keep away intruders from accessing your private information. Confirm if your broker has an SSL certificate (Secure Sockets Layer) on their website to prevent intruders. This will have a displayed certificate on the website footnotes, or you can also check it from the website URL. The website URL will have a ‘lock’ icon to show that it has the latest SSL updates and protection from domain cloners.