Hi i want to ask that are commodities risky for trading? because you can not help but think about risk when you think about trading commodity.. Whenever I tell people what I do for a living, I always get a similar reply, Oh commodities are risky. So whqt you think about it please give answers.
Well, Commodity trading offers most leverage than any other kind of trading ... So, yes its risky ... But, if you maintain sufficient MTM, then you should be safe.
For example, i am planning to go long on Gold 1KG and keep rolling over every expiry ... I will maintain sufficient MTM to ensure i can always hold 1KG Gold in long. Its a safe and good strategy which will pay off in the long run.
But, if you don't maintain sufficient MTM and trade with all cash you have, you will most likely lose eventually.
So, Risk is based on how the trader or investor chooses to be.
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