Action Steps
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Rely on CTA blogs for information on commodity trading adviser firms and funds

Blogs provide specific information on commodity trading advisers. For example, they define what a commodity trading adviser does. Not only can you read the articles that others post, but you can also post your own replies.

I recommend: WordPress features a blog on commodity trading advisers. You can read other comments that users have posted. NobleTrading also provides good information on commodity trading advisers. For example, it defines what a commodity trading adviser does.

Subscribe to commodity trading advisor newsletters

Subscribing to newsletters that CTA firms produce is a valuable resource. You can get the latest on commodity trading funds. Newsletters will cover topics on CTA hedge funds, such as how they're performing or how they're ranked. If you need to get information on topics such as taxes or accounting, commodity trading adviser firms will cover these areas in their newsletters.

I recommend: CTA Research produces a CTA firm newsletter, which tracks hedge funds’ performance. You can also see profiles of CTA firms. Traders Log is also one of the leading commodity firms; it will keep you abreast of current news in the trading industry. You can read the latest articles by leading experts in the market.

Use commodities trading firms' websites to acquire information

You can obtain valuable news and trends on commodity trading adviser firms and funds through their websites. These websites provide information that centers on the commodity, such as gold, oil, or wheat. If you want to discover how a particular commodity performed that day, refer to these websites. They also provide press releases.

I recommend: You’ll want to check out Commodity NewsCenter, which provides breaking news and a market summary, as well as seeing how the commodities performed. Bookmark the National Futures Association’s website; commodity trading advisers refer to this website frequently. After all, if you’re a commodity trading advisor, you need to register with National Futures Association. This website provides news releases, speeches and testimonies.

Helpful advice for making the most of this Guide

• •  To really stay on top of the news when it comes to commodity trading funds and advisers, consider joining an association. Networking with other commodity trading advisers enables you to build relationships.

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Hire a commodity trading adviser

A commodity trading adviser firm is knowledgeable about derivative analytics, which is used for managing risk of a bond or equity portfolio. At the same time, it has to preserve its assets. A commodity trading advisor will give you a different perspective in the commodities industry, primarily because the market is constantly changing. You'll want a commodity trading advisor on your side to keep you informed of these changes.

I recommend: Look at Genuine Trading Solutions, which specializes in studying and executing a hedging strategy; it strives to cut exposures that come from market or operational risk. Genuine Trading Solutions works with pension funds, mutual funds, hedge funds and corporations. You’ll also want to look at Attain Capital Management, which offers comprehensive services, particularly helping you make money whether the stocks go down or up.

Talk to some CTA firms

Research several commodity firms. If you live in Chicago, you might even want to visit commodity trading advisors in Chicago. Look for commodity firms that not only will give you deep discounts on your trades, but find out if they'll offer you advice on potential trades. You also want to see if the commodity firm shows a list of the top CTA hedge funds so you can research them.

I recommend: Lind-Waldock, one of the top CTA firms based in Chicago, offers 10 commission-free contract sides if you open an account with them. However, this must be a self-directed account, meaning you cannot get advice from one of its brokers. Look at Titan Commodities’ website. Though Titan Commodities is a full-service firm, it offers discount commissions. If you’re a beginner, this firm will give you the tools and support when it comes to commodities trading.

Use CTA firms as stepping-stones, then get to know commodity exchanges

It's extremely important to know your commodity exchanges. You'll want to know them not only for trading purposes, but to refer to them for news. You'll need to know these exchanges for commodity trading funds and also to check their annual performances.

I recommend: The New York Mercantile Exchange is the largest physical commodity futures exchange. You’ll find valuable information on commodities, including energy, metals and oil. Look at Chicago Board of Trade’s website, where you can track commodities, including soybeans, wheat and ethanol.

Helpful advice for making the most of this Guide

• •  Keep your commodity trading funds business organized. Store all of your websites in your Favorites or Bookmark folders.

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Prepare for the series 3 by attending online commodity trading advisor schools

If your goal is to become a commodity trading adviser, then you'll have to pass the Series 3 exam. You will need to pass this exam in order to register with the National Futures Association. These schools offer flexible programs in that you can attend class in person, online, or prepare for Series 3 with books and CDs. The series 3 exam consists of market knowledge and rules.

I recommend: American Investment Training offers preparation for the Series 3 exam. You can study for this exam at home; the school provides the study materials. AgentBroker Training Center also offers Series 3 exam classes. You can attend the classes in person or take it online.

Get additional training by working at commodity trading firms

When it comes to making the most of commodity trading adviser firms and funds, this is your best value. You should consider working at a CTA firm. Better yet, why not inquire about getting an internship. An internship allows you to gather real-world experience. The commodity trading adviser can teach and show you how the commodity markets work in the real world. Acquire skills such as working with clients and understanding what their objectives are. You can also study both fundamental and technical analysis.

I recommend: Orion Futures is one of the leading online full service commodity trading firms. One of its objectives is to provide its clients the best service possible. Titan Commodities also offers full service, but at discount pricing. Unlike other CTA firms, Titan Commodities takes pride in providing the tools and education to help the novice.

Read commodity trading adviser newsletters

Use newsletters to obtain good information on commodity trading adviser firms and funds. You can get the latest on seminars or recent released books on hedge funds. Although newsletters may cover general topics, such as performance fees or taxes, you can find information on commodity trading funds. Analysts can contribute articles as to how hedge funds are performing.

I recommend: You’ll want to check out BarclayHedge Blog. BarclayHedge is a popular CTA firm that keeps track of hedge funds’ performances. The analysts base these commodity trading adviser funds on the sector. Attain Capital focuses on commodity firms. If you need more information on taxes, performance and management fees on futures, check the firm’s newsletter.

Helpful advice for making the most of this Guide

• •  Consider taking some sales and customer services courses if you want to be a successful commodity trading adviser. After all, you'll be managing several clients' accounts simultaneously. It's important you build successful relationships with your clients.

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Base commodities

A base commodity is a tangible product or basic resource such as petroleum, sugar, soybeans, aluminum, gold and silver. The price of the commodity is set as a function of the market it is in. Another feature of commodities is that there is no qualitative difference in the products across a market. A commodity trading adviser firm can help you reduce your exposure if you decide you want to invest in this market.

I recommend: For a more in-depth definition of commodities go to InvestorWords.com.

OTC derivatives

Over the counter (OTC) derivatives are contracts that are traded between parties directly and do not need to go through an exchange. This market is unregulated. It is made up of banks and hedge funds and disclosure of information is not required between the parties trading these contracts. Commodity trading adviser firms can be especially helpful in explaining the risks associated with these instruments.

I recommend: University of Cincinnati has a definition of OTC derivatives that is more detailed.

Carbon emission credits

Carbon emission credits are derived from an approach referred to as emissions trading and which is used to control pollution. A government sets a cap or limit on how much pollution can be produced by a company or group. These organizations are issued permits and are obligated to hold credits that are equivalent. These credits can then be sold and traded. Commodity trading adviser firms can assist you, if you determine you want to trade in these credits.

I recommend: Ecobusinesslinks.com has done a wide-ranging comparison of various organizations that provide carbon credits.

Operational or market risk

Values of investments such as commodities, stock, foreign exchange and interest rates change or decrease; this is what is called operational or market risk. This most basic form of risk is what commodity trading adviser firms and funds try to manage.

I recommend: If you want to be more educated on this important aspect of trading, check out the comparison between market risk and business risk at riskexpertise.com.

Hedging strategy

A hedging strategy is a carefully developed plan for establishing a position in one market so as to offset the risk of an equal position in another market. A commodity trading adviser can help you determine if this strategy is right for you.

I recommend: To find more information about the facts related to this strategy, check out: Magnum Global Investments.

Derivatives

Derivatives are financial contracts that come from a source such as real estate, bonds, stock and interest rates to name a few. The value of a derivative comes from the underlying value of these assets. The types include futures, options, swaps and forwards. Commodity trading adviser firms have expertise in these highly complex instruments.

I recommend: Mt. Rushmore Securities provides a good definition and some examples of derivatives.