Commodities 101: Lesson 4 of 5

Trading Strategies for Commodities CFDs 

  • Introduction to swing trading and position trading 
  • Understanding scalping and day trading strategies 
  • The role of risk management in successful commodities CFD trading 

Introduction to swing trading and position trading  

Swing trading and position trading are two different strategies that traders can use to trade commodities. 

Swing trading is a short-term trading strategy that involves holding a trade for a few days to several weeks. In commodity trading, swing traders aim to profit from short-term price movements in the commodity market and they typically use technical analysis tools, such as charts and trendlines, to identify potential trading opportunities. 

Position trading, on the other hand, is a longer-term trading strategy that involves holding a trade for several weeks to several months. In commodity trading, position traders aim to profit from the long-term trends in the commodity market and they typically use fundamental analysis, such as economic data and reports on supply and demand, to make informed trading decisions. 


Understanding scalping and day trading strategies  

Scalping in commodity trading involves making many trades within a short time frame, often just a few minutes or even seconds. Scalpers aim to make a small profit on each trade and typically use technical analysis tools, such as charts and indicators, to make quick decisions on when to enter and exit trades in the commodity market. 

Day trading in commodity trading is a similar strategy to scalping, but with a slightly longer time frame. Day traders typically hold a trade in a commodity for several hours to several days, and they also use technical analysis tools to make informed trading decisions based on the price movements in the commodity market. However, day traders may also consider fundamental factors, such as economic news releases related to the commodity they are trading, when making their decisions. 


The role of risk management in successful commodities CFD trading 

Risk management is essential for successful commodities CFD trading. Commodities markets can be volatile, so ignoring risks can lead to significant losses. A solid risk management plan helps minimize losses and protect trading capital by setting stop-loss orders and properly sizing trades, diversifying portfolios, hedging trades, and monitoring overall risk exposure. 


What’s Next?

Congratulations on completing Lesson 4 of 5! But don’t stop now—there’s so much more to learn.

Happy trading, and see you on the other side of Lesson 5!

Most Traded

Trading Opportunities

How much longer can the kiwi sell off?

Bitcoin touches 64K: Has it found its footing?

Republican-led shutdown: What’s at Stake for the USD?

Major events in Euro Area and US on Friday

Limited offer:

Get Free

The TraderKeys keyboard can take your gold trading to the next level, with preprogrammed hot keys enabling you easily execute and modify trades.

Join Now