The Psychology of Commodity Price Movement
The price of a futures contract is the result of a decision on the part of both a buyer and a seller. The buyer believes prices will go higher; the seller feels prices will decline. These decisions are represented by a trade at an exact price.
Once the buyer and seller make their trade, their influence in the market is spent — except for the opposite reaction they will ultimately have when they close the trade. Thus, there are two aspects to every trade: 1) each trade must ultimately have an opposite reaction on the market, and 2) the trade will influence other traders.
Having invested in stocks for quite sometime, I am thinking to get into the commodity trading world. As a beginner in futures and options on futures, I would like to seek advice on the names of brokerage firms for such investment. I wonder what are the most popular online commodity brokerage firms (like TDAmeritrade for stocks) for setting up “self-directed” accounts with reasonable commissions, fees and requirements for opening accounts. Many thanks.