Myths and Misconceptions Of Commodity Trading


Everything in the society has a group of people agreeing with it and an equal number of people opposing it. Apart from these two, there is also a group like the cat on the wall. They are always dinging- dangling as to whether to accept it or go against it. The commodity market is also not an exception. When this confusion exists in every small thing, it is definite to be in this highly speculative market wherein there is money factor involved and all that is invested here might or might not come back. So this set of skeptic people neither agree nor disagree with the concepts. It is because of them that we have this very term myth and misconceptions. It is this group that doubts and questions every single bit of a concept that leads to disbeliefs.

All these misconceptions and facts create a doubt in others too stopping them from the next step of making their investments here. So it is high time we try to prove all these myths wrong and enlighten people on how flourishing this market is of course with some pits and falls.

Commodity trading is mainly for speculators – commodity trading does not restrict the entry to specific people. In fact all types of people are allowed to trade here provided they have the spending capacity and some essential stuff to trade on. The very thought that it is only for speculators is not correct. Of course speculators play a very important role here. Without them the market cannot function properly because it is them who help in discovering the different price changes and the management skills to handle severe situations. So they play a key role but not that they are the only players.

A difficult market to understand – commodities market is all about how products perform in the market based on the economic factors, climatic factors etc… It is easy and simple for any player to understand that market without difficulty for it is the basic living concepts and the economy in which they dwell. Anybody interested in all these would definitely have a liking in this market. It is all about the simple demand supply concept which is a very common happening in a person`s life. So it is definitely not a difficult market to understand or trade on for a person can also get to know about it from the magazines and newspapers. It is as simple as that.

Poor quality in commodities market – many of us have this thought that anything that comes through the commodity market might be of poor quality. Understand that trading here happens either for a single person or for a nation as a whole since even governments of different states and countries are involved here who have long term contracts and agreements with other countries for the exchange of commodities. So whenever there is an upcoming shipment, the products are checked for quality and only then transferred to the warehouses for storage. Again the ones that come to the open market also follow quality standards on and are generally sold much earlier to their expiry date. The customer is also at freedom to check the products before paying for it.

Money is difficult in commodities market – anything that is done with ethics and standards is definite to be a success and so is the case with the commodities market. It is never a difficult task to make money here barring the usual hindrances like political and natural factors. Until and unless a player plays following the rules and regulation he is sure to benefit from this market. It is only those who are greedy and push and pull heavily to make money lose. Slow and steady wins the race; and this is applicable for everything in life.

Easy manipulation – as many unscrupulous traders think, the prices in the commodities market cannot be changed or be played with because most of the products that are sold and bought here are global and is consumed by many countries across the world. So nobody can take advantage of the situation to hike prices of a particular product.

These are some of the disbeliefs that are stopping some of the potential traders from entering the commodities market. Understanding and getting to know about the market will definitely clear all the doubts and queries regarding the market.

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