This is a guest article by High Velocity Market Master
Commodity foreign exchange trading is a remarkable idea for many newbs. Commodities are not traded on the foreign exchange market, only currency is traded there. So why introduce them into a foreign exchange trading system?
The explanation is that commodity costs can affect currency prices. Though we are not trading in the price of raw materials without delay, in a few cases the price of a currency pair may be more or less linked directly to the cost of a specfic commodity.
These raw materials include oil, metals, precious stones, unprocessed agricultural products, for example. Obviously plenty of the states that rely on one of those commodities, are small or developing nations whose currency wouldn’t form part of a major pair. These currencies are not going to be of interest to most forex traders.