What are the Attributes of a Successful Commodities Trader?

Posted On September 9, 2023

The futures market is a platform where contracts for the delivery of commodities at a future date are traded. The commodities futures and options market are arguably the most volatile. 

For example, you can consider the oil price forecast for the last few years to justify the point. 

• Oil prices are very volatile due to the potential for significant price changes caused by a complex interaction of supply, demand, and market emotion. 
• Understanding the fundamental and technical factors that influence the price of oil can help traders and investors spot opportunities and predict future price patterns.

VSTAR is one of the platforms that is a familiar name for all kinds of traders who prefer to trade with various commodities like stock, forex, gold, indices, oil, crypto and many other such popular instruments.

In this post, let us discuss a few essential attributes of a successful trader of the above commodities.

1. Be ready to learn about futures and different options.

For futures and options trading, dedicate ample time to understand the intricacies of these markets and the relevant exchanges. Numerous commodities and products are available on the major U.S. commodity exchanges.

As an example, a person should be ready to learn gold trading tips while trading gold. 

1. Have insights on commodities.

Commodity futures vary in trading schedules, tick values, and delivery specifications. Some allow physical delivery, while others settle financially upon contract expiration. Understanding these differences is crucial for commodity trading.

1. Optimistic attitude.

Successful traders maintain optimism, believing they can rebound from temporary losses. They recognize trading’s zero-sum nature and envision themselves as winners, regardless of short-term outcomes.

1. High self-esteem and self-worth.

The modern education system develops self-esteem. However, when reaching adulthood, people may be influenced by negativity. 

• Traders must combat societal attitudes about wealth and scarcity.
• Also, they must build self-confidence through sound decisions and self-reflection for long-term success.

1. A sense of internal power.

Balancing power and powerlessness are vital in personal and professional life. Traders combat victim mentality, investing in personal growth and assuming responsibility, recognizing it as a direct route to prosperity.

1. Well-informed of commodity attributes.

Commodities have unique attributes, emphasizing understanding of what is being traded. Exchanges provide price, volume, and open interest data, which is crucial for practical market analysis.

1. Understand market support and resistance.

Commodity prices fluctuate in response to supply and demand dynamics. As demand decreases and supply rises, prices drop. When prices become attractive, buyers return, stabilizing prices and initiating an upward trend.

1. Knowing discipline is crucial.

Discipline is paramount in trading, involving planning and sticking to it despite market fluctuations. 

• It is vital to recognize your financial limits and avoid risking personal assets. 
• Successful traders diversify their portfolios across various markets and commodities, reducing risk. 
• They also employ stop orders to optimize risk-reward ratios, aiming to buy and sell at favorable prices for maximum profit.

Final word

Successful traders share solid psychological traits, such as a dedication to physical and mental health and stress management, that increase their power and capacity to produce positive results.