Commodity Trading Advisors

Written by BK Shaw
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Commodity trading advisors are exactly what their name suggests. They are licensed to give advice about trading in the commodity markets. The job of a CTA is to research the market and impart the knowledge with his or her client base. A CTA might have several commodity brokerages as customers, or hundreds of small speculators trading independently.

You might also be able to receive their services through your brokerage house as part of your online trading account. Maybe you are trading your account on your own, and you can subscribe to the services of their commodity trading advisors. I think it's a good idea to gather information from as many sources as possible. I know of commodity brokers who have gathered information from a particular source and then traded against the advice given, because the CTA has a history of being frequently wrong.

Commodity trading advisors do not have crystal balls rather like the vast majority of traders. They are paid to gather information and make trade recommendations based on their informational resources. They might make trade recommendations based strictly on technical analysis of the charts, or they may have a theory of how the market might move based on fundamentals in that specific marketplace.

How to Find Commodity Trading Advisors

Ask if your brokerage works with a CTA, and if you will be able to have access to their information. Many CTAs advertise their services online and it is easy to subscribe to their services. I like to read recommendations from a couple of different CTAs and then watch how the markets react versus the different CTAs' opinions.


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