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How to start?

Updated: Jun 11

If you need a more concrete approach and speed up the learning process while avoiding unnecessary mistakes, it's recommended that you take a look at the services that we offer under "Services & Pricing" at the top of the page in the menu.


Summary

Requirement

Description

Knowledge

Learn futures, risk, and indicators

Broker

Choose a licensed futures broker

Capital

Use margin requirement from your broker and your performance to know the capital needed for your to start.

Platform

Trading software with charting tools

Discipline

Stick to strategy and risk rules

Detailed version

1. Understand What Commodity Trading Is

Commodity trading involves buying and selling raw materials or primary agricultural products such as:

  • Energy: Crude oil, natural gas

  • Metals: Gold, silver, copper

  • Agriculture: Corn, soybeans, wheat, coffee

  • Livestock: Cattle, hogs

You can trade futures contracts, options, ETFs, CFDs, or physical commodities, depending on your strategy and capital.

2. Learn the Basics

You need to understand:

  • Futures contracts: Agreements to buy/sell at a future date at a predetermined price.

  • Tick size & tick value: Minimum price movement and how much it’s worth.

  • Margin & leverage: Amount needed to control a position (e.g., $5,000 controls $50,000 with 10x leverage).

  • Settlement: Most contracts are cash-settled or physically delivered.

Resources:

  • CME Group Education Center

  • Books like “Trading Commodities and Financial Futures” by George Kleinman

  • YouTube or professional trading courses

3. Choose a Market or Instrument

Pick a focus based on interest, volatility, and capital requirements:

  • WTI Crude Oil (CL)

  • Gold (GC)

  • Corn (ZC)

  • Silver (SI)

  • Natural Gas (NG)

You can also trade mini or micro contracts (e.g., Micro Gold, Micro Crude) with lower capital needs.

4. Select a Broker(Brokers listed are not the only ones available nor are they recommendations so it's up to traders to pick the one that they like best)

Choose a commodity futures broker offering:

  • Access to exchanges like CME, ICE, or NYMEX

  • Competitive commissions & margin rates

  • Good trading platform (e.g., NinjaTrader, Thinkorswim, Interactive Brokers)

  • Strong risk management and customer support

5. Open and Fund a Trading Account

  • Complete KYC and identity verification

  • Choose the account type (individual, corporate, retirement)

  • Fund with sufficient margin capital for the instrument of your choice

  • Trade in a simulator until you understand the software fully and can apply your strategy without making mistakes

  • Trade the Micro of the instrument of your choice if available after transferring from simulator to live account in order to make sure that there's no big discrepancy between your results from simulator and live account; any mistake made will be less expensive than trading the standard contract.

6. Use a Demo Account First

Most brokers offer paper trading to simulate real trades without risking money. This lets you:

  • Understand order types (market, limit, stop)

  • Practice technical analysis and execution

  • Test trading plans. DO NOT TRADE SOMETHING YOU HAVE NOT TESTED AND TRADED IN A PAPER ACCOUNT FIRST!

7. Learn to Read Commodity Charts

Use technical analysis tools such as:

  • The different chart types and the data that they show

  • Candlestick patterns

  • Moving averages (MA, EMA)

  • Relative Strength Index (RSI)

  • MACD, Bollinger Bands

  • Support and resistance levels

Also study fundamental drivers, like:

  • Supply & demand reports

  • USDA reports (for agri)

  • EIA inventory data (for oil/gas)

  • Geopolitical and weather factors

8. Develop a Trading Strategy

A strategy includes:

  • What to trade

  • Entry and exit rules

  • Risk/reward ratio

  • Stop-loss and take-profit levels

Examples:

  • Trend-following

  • Mean reversion

  • Breakout trading

  • News-based trading

9. Manage Your Risk

Risk management is essential to survival:

  • Use past performance from your trades taken in simulator to know max dollar/percentage loss per day

  • Use stop-loss orders

  • Do not trade strategies/techniques you have not tried/tested in a simulator before!

  • Avoid overleveraging

10. Stay Informed and Keep Improving

  • Keep a trading journal

  • Mark down the mistakes made and the suggested solution(s) to avoid such mistakes and practice those in a simulator in order to build muscle memory

  • Review trades regularly(Take screenshots of the charts you used to take the trade and any other piece of information used at the time of the trade.)

  • Learn from losses and adapt

 
 
Instrument specifications table

Energy Commodity Symbol Exchange Size Tick Size Tick Value WTI Crude Oil CL NYMEX/CME 1,000 barrels $0.01/barrel $10/contract E‑mini...

 
 
Contract month letter code.

Month Code January F February G March H April J May K June M July N August Q September U October V November X December Z

 
 
Diversifying through commodities.

Use commodities to diversify your portfolio and potentially earn money no matter the direction the market goes or the state of the...

 
 

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