Why Commodity Traders Lose Money

If you have not heard by now, most people who trade commodities lose money. Most of the estimates range in the 80 to 95 percent range of those who have lost or who are losing in the world of trading commodities. Those statistics are dismal for someone who wants to venture into trading commodities. Fortunately, many of the losers have common traits that contribute to their losing and they can serve to help others become successful. 

Here are four of the most common reasons why commodity traders lose money. If you can have the discipline to consistently overcome these common mistakes, you will put the odds much more in your favor

Lack of Education on Commodity Trading

Many new traders do not educate themselves on how to trade commodities properly. This goes beyond learning the ticker symbols, futures margins and contract sizes of a variety of commodities. You are competing against other traders who have had the best training in the business and have been trading professionally for many years. Believe me, they will not take it easy on you. You keep score with money in this business and everyone is trying to score as many points as possible – no charity here. 

At the very least, I recommend reading several good books on trading, starting with Trading By The Book by Joe Ross and Come Into My Trading Room by Dr. Alexander Elder. Don’t just read the books – implement their trading philosophies. I would also suggest learning how to trade from a successful trader. There are many professional traders available for instructing or you can take classes specifically devoted to trading commodities.

Article source:-  http://commodities.about.com/od/gettingstarted/a/commoditylosses.htm