According to commodity trader – Rowan Relton, commodity trading is a profession that has been around long before stocks and bonds trading even exists. Commodity trading is a part of the financial market that is rapidly changing. In this type of trading professionals trade commodities and then buy or sell for individuals or organizations. Commodity traders trade in different markets and provide financial planning services to clients.
A commodity trader is a professional individual or organization that invests in physical commodities such as agricultural products, oil, silver or gold by buying or selling them through an exchange market. Commodity traders do have an in-depth knowledge of the factors that affect price of commodities and their values. As a commodity trader, you work in a corporate environment like a futures commission merchant or stockbroker firm.
Skills You Need As a Commodity Trader
Commodity trading is a professional job within the financial industry, says Rowan Relton. Therefore effective communication, the ability to think critically, understanding the financial market, knowing the investment formulas, understanding sales techniques, vast knowledge of commodity trading process and ability to make a decision quickly are skills that are expected from a commodity trader.
Becoming a Commodity Trader
Commodity trading is a professional job so to become a commodity trader there are some steps you are expected to take which are:
1. Help Your Career through Education
Though you don’t need a PhD or college degree to get into commodity trading. As there are companies that employ those with an undergraduate degree in finance or any related field. To get qualified for certification in the financial industry you might need to get a four-year degree. Also, many investment companies prefer a candidate with an MBA for high-level positions.
2. Gain Position with Commodity Trading Firm
To qualify for the license exam, you need to earn a position with a commodity firm. The firm will help provide materials and guide you to study for the licensing exam. Also to help you become an independent professional trader.
3. Register For commodity Trading License and Get Tested
The series 3 exam is the official licensing assessment for commodity traders. As soon as you pass the series 3 exam you can register with the National Futures Association as an associated person. You can do the test and registration when you start working with a commodity firm. The exam tests you on governing rules in commodity trading and knowledge of commodity markets and futures.
4. Get Experience
After getting you licensed, a constant practice of dealing with clients and commodity trading can help you gain experience, says Rowan Relton. As a beginner, you will be entrusted with small accounts. And once you become skilful in commodity trading with buying and selling of commodities through practice you can then be trusted with large accounts.
Depending on the state of the market a commodity trader must be able to make a critical and fast decision. It can be a physical marketplace or online where there is buying and selling of commodities.