Best Online Brokers for Commodity Futures Trading November 2025

How to Start Trading Commodities?

What Is Commodities Trading and How Can Beginners Trade Commodities Online Successfully?

Commodities trading gives retail traders access to some of the world’s most actively traded markets, including gold, oil, natural gas, silver, copper, wheat, corn, coffee, and more. These markets are influenced by global supply and demand, weather patterns, geopolitical events, interest rates, and economic growth, creating frequent price movements that many traders look to benefit from.

If you’re new to commodities trading, this guide explains what commodities are, how online trading works, what moves commodity prices, and how beginners can start trading confidently with proper risk management.

What You Will Learn

• What commodities trading is and how it works for retail traders
• Different types of commodities you can trade online
• What influences commodity prices on a daily and long-term basis
• How to start trading commodities online step-by-step
• Key risks and how to manage them effectively

What Is Commodities Trading?

Commodities trading involves buying and selling raw materials or primary goods such as energy products, metals, and agricultural goods. Retail traders typically trade commodities online through CFDs, spot markets, or futures contracts, depending on their experience and trading goals. The objective is to profit from price movements—whether markets rise or fall.

Traditionally, commodities were only accessible to institutional traders, hedge funds, and producers. Today, online platforms allow everyday traders to participate in global commodity markets from anywhere in the world.

What Types of Commodities Can You Trade Online?

Commodities are generally grouped into four main categories. Understanding these helps new traders choose which markets suit their interests and risk tolerance.

1. Energy Commodities

• Crude oil (WTI & Brent)
• Natural gas
• Heating oil & gasoline

Energy markets are strongly affected by OPEC decisions, geopolitical tensions, supply disruptions, and global economic activity.

2. Precious Metals

• Gold
• Silver
• Platinum
• Palladium

These are often viewed as safe-haven assets, especially gold, and are influenced by inflation, interest rates, and currency movements.

3. Industrial & Base Metals

• Copper
• Aluminium
• Nickel
• Zinc

Prices are driven by manufacturing demand, construction activity, and economic strength of major economies like the US and China.

4. Agricultural (Soft) Commodities

• Wheat, corn, soybeans
• Coffee, cocoa, sugar
• Cotton, livestock

Agriculture markets depend on weather conditions, seasonal cycles, crop reports, supply chain factors, and global consumption trends.

How Does Online Commodities Trading Work?

Retail traders access commodity markets online through derivative instruments. The most common ways to trade commodities include:

CFDs (Contracts for Difference)

CFDs allow traders to speculate on price movements without owning the physical commodity. You can trade long (buy) if you expect prices to rise or short (sell) if you expect them to fall. CFDs offer leverage, making them popular for active traders.

Futures Contracts

A futures contract is a legal agreement to buy or sell a commodity at a set price on a future date. Futures are widely used for oil, natural gas, wheat, gold, and more. They require more experience because of higher capital requirements and contract expiry dates.

Spot Commodities

Spot trading refers to buying or selling a commodity at its current market price. It’s common for gold and silver, especially among long-term investors.

What Influences Commodity Prices?

Commodity prices move daily due to multiple external factors. As a trader, understanding these influences can help anticipate market direction.

1. Supply and Demand

A shortage pushes prices up, while oversupply causes prices to fall.
Example: A poor wheat harvest due to drought can cause wheat prices to rise.

2. Geopolitical & Economic Events

Wars, sanctions, and political decisions can disrupt supply.
Example: Tensions in the Middle East often impact oil prices.

3. Weather & Seasonal Trends

Agricultural commodities are highly seasonal. Hurricanes or freezing temperatures can disrupt production.

4. Currency Movements

Most commodities are priced in USD, so a strong US dollar often pressures commodity prices lower, and vice versa.

5. Interest Rates & Inflation

Higher inflation can increase demand for gold as a hedge, while interest rate changes influence both production costs and investor sentiment.

How Can Beginners Start Trading Commodities Online?

Here’s a simple approach for new traders looking to enter the commodities market:

1. Learn How Each Commodity Behaves

Start with one or two markets (e.g., gold or oil) to understand what drives them. Each commodity has different volatility and trading hours.

2. Choose Your Preferred Trading Instrument

• Beginners often start with CFDs due to lower capital requirements and flexibility
• Intermediate traders may explore futures once they gain more knowledge

3. Practice on a Demo Account First

This helps you test strategies without risking real money.

4. Develop a Simple Trading Strategy

Some common approaches include:

• Trend following
• Breakouts
• Range trading
• News-driven trading

5. Track Economic & Market News

Commodity markets react to scheduled reports like:

• EIA Oil Inventory Reports
• US Non-Farm Payrolls
• Crop & weather reports
• OPEC meetings

Risks of Commodities Trading and How to Manage Them

Commodities can be more volatile than other markets, so risk control is essential.

Key Risks

• Sharp price swings during news events
• Leverage magnifying losses
• Seasonal or unpredictable market cycles

Risk Management Tips

• Do not risk more than a small % of your account per trade
• Use stop-loss and take-profit orders
• Avoid over-leveraging
• Diversify across commodities rather than trading just one

Key Takeaways

• Commodities trading lets retail traders access global markets like oil, gold, silver, and agriculture products
• Understanding what moves commodity prices is essential for consistent results
• Beginners should start small, learn one market at a time, and practice before trading with real capital
• Having a strategy and risk management plan is more important than predicting price direction