INDICES TRADING

The first index was created in 1885, by Dow Jones and co-founder Charles Dow, summing the prices of the compounded companies and dividing it by the number of companies. This is very simplistic considered nowadays, but back in time, it revolutionized the market more than 100 years ago, and brought into light a new financial instrument.

Nowadays, indices use different ways to define their price, which can be categorized in two groups: Market value weighted indices, which are calculated based on the total market value of the compounded companies. The bigger the company, the larger the impact.

The classic examples are FTSE and DAX. Price weighted Indices, which are calculated based on the company share price. So, companies with higher share prices have more impact on the overall performance of the index compared to other companies with lower share price.

Why Commodities?

Commodities stay in the core of any daily activity. They are the big blocks where the global economy is built. They are the materials which come from earth and need to be processed in order to be used in other stages of manufacturing. Commodities are categorized into soft and hard. Soft are mostly agricultural and hard are metals like gold and energies like gas and oil.

How to start?

Commodities are usually traded as individual assets and also through CFD contracts. Any trader who is willing to invest their capital in commodities is now able to trade commodities without having to own them as assets, and with a very low first investment at about $250. There are many factors which influence the production and the consumption of commodities. Let’s dive in the most important ones:

Agricultural & Energy Commodities

Some of the most wanted commodities are produced in regions and countries which are experiencing turbulent time on their political issues. For example, crude oil is massively produced in countries around the Middle East, meaning that the price of Brent Oil and WTI can be heavily influenced by the political tensions that historically have happened in that region. For example, if any producing country is sanctioned, it usually cuts off the supply, so for the same demand, the price goes up.

The weather conditions

The weather conditions have a major role in defining the commodity prices, especially in the agricultural sector. Favourable weather may result in a leading oversupply of the commodity. Not favourable weather conditions would result in a shortage in the supply of a commodity. Weather might also affect the price of heating oil and natural gas.

WHY TRADING AGRICULTURE WITH 5Markets?

Risk Management Functions

You cannot avoid the risk, but you can manage it in order to minimise its effects. There are two automatic functions, stop loss and take profits which will close the positions when a certain level of price is met. You will limit the losses and maximise the profits.

Advanced Financial Tools

Available financial tools enable traders to have what they need to control, manage their account, fund, withdraw, define stop loss and take profits. Technical indicators which will give a full picture of the asset's historical prices.

Transparent trading conditions

Our trading conditions are transparent, written in the account types section, and legal regulations also. For any additional questions you will have a dedicated conversation with your personal account manager, who will be by your side during the time you are trading with us.

LIVE STOCKS DATA

WHAT SORT OF TRADER ARE YOU?

Beginner Trader

Is it the first time you are facing financial markets? Well, go with one of the accounts, tailored for beginner traders. You can start with $ 250 as a minimum, or any amount up to $ 2,500, so you take advantage of what a beginner account provides you with.

Intermediate Trader

Do you have a couple of years in financial markets and have some basic knowledge and experience? We provide a tailored account for this category starting with a minimum investment of $ 2,500 up to $ 25,000. Enjoy additional trading privileges coming along with higher investments.

Advanced Trader

For any professional trader and investor, we provide privileges for people who trade daily for many years now, advanced accounts are serving trading services and standards which will put your experience in a higher level, and make you expand your expertise and knowledge.

MAIN INFLUENCERS IN AGRICULTURE TRADING

Income and population

As economies grow and be more industrialized, they typically increase the amounts of commodities they consume - particularly agriculture. However, when the economy reaches a certain level of development, you will see a smaller increase in commodity demand for a corresponding rise in income. In the same time, the type of commodities consumed changed- as people get wealthier, they spend more on protein based foods, which increases demand for livestock and the crops used to feed them.

Weather

Too much sun, too dry, too wet, too hot or too cold; unless the weather is just right agricultural commodities will suffer. There are other examples where commodities are highly affected from weather, let’s see hurricane force winds in the US Gulf can force offshore oil producers to shut down. Low water levels in Indonesia can make it more difficult for nickel miners to ship the metal to market.

Interest rates and the US dollar

Lower interest rates may encourage businesses and consumers to raise their spending on investment and consumption. This will increase the demand for commodities. Most of commodities around the world are priced in US dollars. Every change in the rates of USD is transmitted to the prices of commodities.