How to Trade Commodities: Futures, ETFs and the Five Markets Retail Traders Actually Use

I wrote separate guides for gold, oil and silver, and every one of them started the same way: before any strategy, figure out which product you are actually trading and what one tick costs on it. Natural gas and copper don't have their own guide here, so they get a section each below.

Quick Answer

General education, not investment advice, and not a recommendation of any broker, platform or fund. Nothing on this page says where any commodity is going.

What a Commodity Trade Actually Is

A commodity is a raw material that is close enough to identical from one seller to the next that it can trade on a standard contract: a barrel of a specified crude grade, a troy ounce of gold, a pound of copper. Nobody day trading a chart wants a truck of copper at the door, so a commodity trade is almost always a trade in a financial product that tracks the price. Most guides on how to trade commodities for beginners blur these together, but there are four, and they behave differently.

How to trade commodities using futures

Futures are the main road. A futures contract fixes the amount (100 ounces, 1,000 barrels, 25,000 pounds), the quote unit and the smallest price step, so every tick is worth the same number of dollars on every trade. You post margin as a deposit, the position is marked to the settlement price every day, and each contract month expires, so a trader closes or rolls before the last trading day. Micro contracts exist so a smaller account can use the same chart with a fraction of the dollar swing. The step-by-step futures primer covers margin, settlement and rolling in detail, and the explainer on what a micro contract is covers why the small versions exist.

ETFs and ETNs

A commodity ETF is a fund you buy like a stock. Some hold the physical metal. Many, especially in energy, hold futures and roll them each month, which means their return can wander away from the spot price over a long hold. An ETN is different again: a debt note from the issuer that promises to pay an index return, so it carries the issuer's credit risk on top of the commodity. Either way the chart is a share chart, and a share is not an ounce or a barrel.

Why CFDs are mostly a non-US product

CFDs are what a lot of beginner commodity guides push, usually without saying who can legally use them. The CFTC describes the product in its 2018 enforcement release against an offshore CFD platform: "a CFD is generally an agreement to exchange the difference in value of an underlying asset between the time at which the CFD trading position is established and the time at which it is terminated." The same release alleges the firm offered these on commodities without running them on or subject to the rules of a CFTC-registered contract market, as the Commodity Exchange Act requires for leveraged retail commodity transactions. That is the short reason US retail traders generally can't get leveraged commodity CFDs, and why a US guide ends up on futures or funds. Rules change, so check with your own regulator.

The Five Markets, Contract by Contract

There are dozens of listed commodities, from wheat to lean hogs. The five below show up in nearly every beginner commodity guide, and each has both a standard CME contract and a micro: gold, crude oil, silver, natural gas and copper. Every unit, tick and settlement method below was read on CME Group's contract spec page for that product (for example the Henry Hub natural gas futures spec page) in October 2026. The tick value column is computed in code from the unit and the tick, and it matches what CME lists.

Read down the tick value column and the point of this whole page shows up. One tick on a standard contract runs from $10.00 on gold to $25.00 on silver, and the same stop measured in ticks costs a very different amount depending on which row you are on. The micros are not all the same fraction either: a tenth of the standard contract on gold, crude, natural gas and copper, a fifth on silver. And the settlement column matters for anyone who forgets to close: the deliverable contracts are the ones you never want to hold into the last trading day.

For the three markets that already have their own guide, go there for the detail rather than reading it twice. The gold guide covering XAUUSD, GC and MGC explains spot versus futures and what the dollar and yields do in the background. The oil guide handles WTI versus Brent and the weekly petroleum report. The silver guide explains why silver swings harder than gold and why its micro is a fifth, not a tenth.

How to Trade Natural Gas

How to trade natural gas futures: NG vs MNG

Natural gas futures at CME are the Henry Hub contract. NG is 10,000 MMBtu (a heat unit, million British thermal units) quoted in dollars and cents per MMBtu, and the outright tick is 0.001, which makes one tick $10.00. The micro, MNG, is 1,000 MMBtu at $1.00 a tick and is financially settled, while NG is deliverable. Quotes run to three decimals, so a move of 0.040 is 40 ticks.

That 40-tick stop ($0.040 per MMBtu, a made-up distance for the example) costs $400 on one NG contract and $40 on one MNG. On a small account, that gap is usually the whole decision.

What moves natural gas (background only)

The EIA's page on factors affecting natural gas prices lists them plainly. On the supply side: the "Amount of natural gas production," the "Volume of natural gas in storage" and "Volumes of natural gas imports and exports." On the demand side: "Variations in winter and summer weather," "Economic growth" and "Availability and prices of other fuels." The same page notes that increased demand or reduced supply "in the short term may cause large changes in natural gas prices," partly because many consumers can't switch fuels quickly.

That last line is the one a chart trader feels. Natural gas can cover a lot of ground in a few candles, and storage numbers and weather headlines are the usual explanation afterwards. None of it is an entry, and the grader doesn't read storage data or forecasts. If a storage release is close, the sensible move is to wait until the candles settle and then look at the structure that is left.

Reading a natural gas chart

Natural gas rewards the same with-trend read as everything else on this page, with two adjustments. If its pullbacks run deeper relative to price than the gold chart you are used to, the stop needs more room and the contract count comes down to match. And check the contract month on the chart: a continuous chart splices months together at each roll and can show a jump that never traded. For the product side there is an instrument page for natural gas chart analysis.

How to Trade Copper

Working out how to trade copper futures starts with the contract. CME's HG is 25,000 pounds quoted in dollars and cents per pound, with a 0.0005 tick worth $12.50, and the contract is deliverable. Micro Copper (MHG) is 2,500 pounds at $1.25a tick, financially settled. Copper is the only market on this page where the micro's tick isn't a round dollar figure, which is a good reason to let a calculator or code do the sizing instead of your head. Quotes run to four decimals, so 4.5000 to 4.5150 is 30 ticks.

What moves copper (background only)

Copper is an industrial metal first, so it tends to get read as a gauge of building and manufacturing. A March 2025 CME Group economic research piece on copper notes that "From 2000 to 2022, the price of copper closely tracked crude oil," likely because mining and refining are energy intensive, and that "China is a major importer of copper for use in its construction sector and other industries." It also points to electrification demand: "The average EV contains 60kg of copper compared to 40kg for hybrids and just 24kg in the average combustion engine car."

The more useful part of that piece for a trader is its warning. It says both the oil link and the China link have broken down since 2022. Relationships that explained copper for twenty years stopped explaining it. That is a good reason to treat any macro story as background and take entries off the chart in front of you.

Reading a copper chart

On HG and MHG the volume is exchange volume, so VWAP and volume bars carry real information. Because the tick is so small relative to price, a normal pullback can still sit dozens of ticks from entry, and at $12.50 a tick a full HG contract adds up fast. The sizing section below works a copper example through to the contract count. There is also an instrument page for copper chart analysis.

Trading Commodities Online From Home

If you want to learn how to trade commodities from home, there is nothing special about the setup. Knowing how to trade commodities online comes down to four pieces, and none of them needs a trading floor or an expensive data package to start.

• An account that can hold the product.Futures and micros need a futures-enabled account, which a normal stock account often isn't until you apply for it. ETFs and ETNs only need a regular brokerage account.
• A charting platform with the right symbol. Chart the exact contract you trade (the front month of MGC, MCL, SIL, MNG or MHG), with exchange volume, VWAP, the 9 and 20 EMAs and MACD on it.
• A simulator. Run the order ticket and the tick math there until they are boring. The comparison of paper and live trading is honest about what a sim can't teach.
• A screenshot habit. Before each order, capture the chart and grade it. It forces a pause, and it leaves a record you can review.

Then check the clock. Commodity futures trade nearly around the clock on weekdays, but the hours are not equally busy, and the breakdown of futures session hours explains why the same chart behaves differently at 3 a.m. and 10 a.m. ET.

How to Read Any Commodity Chart

The chart read barely changes from market to market. Tick values differ. Structure doesn't. Here is what the grader looks at on a commodity screenshot, and what a clean read looks like on each:

• EMAs. For a long, the 9 sits over the 20 and both point up, and the pullback finds them instead of falling through. Mirror it for a short. The 9 and 20 EMA guide goes through the pullback zone.
• VWAP. On a futures chart it is built from exchange volume. Longs that hold above it read better than longs chopping across it. The VWAP continuation playbook covers holds and reclaims.
• MACD. A check on momentum, not the trigger. A histogram that stays on the trend side through the pullback is the better version. Settings are in the MACD for day traders walkthrough.
• Volume. Bigger on the push, smaller on the pullback, bigger again on the candle that resumes the trend.
• Candle structure. Rising highs and lows for a long, falling ones for a short, and a resumption candle with a solid body that closes in the trend direction.

That is a momentum continuation setup, long or short, and it is the only type SnapPChart grades. It does not grade reversals, fades or "this has run too far" ideas. Commodity futures charts are graded as futures and spot gold or silver (XAUUSD, XAGUSD) as metals, so those grades are capped at B: a clean pullback on MCL or MGC can earn a B, and nothing higher. A commodity ETF chart is graded like a stock and is not capped. Futures are recognised from the contract or continuation symbol on the chart (MHG1!, NG1!, /NG and the like), and a chart labelled only with a bare root such as NG or HG may be read as a stock chart, without the cap. Each chart gets a take, wait or skip call, and when the setup qualifies, an entry, a stop with the reason for its level and targets. The momentum trading strategy hub explains the with-trend logic across asset classes, the four with-trend gold setups show the same idea on one commodity in detail, and the guide to how AI chart analysis works covers what a single image can and can't carry.

A copper pullback, described

Take a 5-minute MHG1! chart where copper has climbed since the open with the 9 EMA above the 20. The dip that follows measures about 25 ticks (0.0125 a pound) and pokes under VWAP for two candles, on the lightest volume of the session so far. MACD stays above zero the whole time. The third candle opens below VWAP and closes back above it with a full body. That reclaim is the trigger: entry over the reclaim candle's high, stop a few ticks under the dip low (close to the 30-tick stop in the sizing example below), first target at the morning high, second at a move equal to the first leg. Read as futures, the best that chart can grade is a B. If the dip keeps closing under VWAP while volume grows, the reclaim never comes, and the call is a wait or a skip.

Sizing a Commodity Trade From the Tick

The sizing method is the same on every market in the table: stop distance in ticks, times tick value, times contracts, has to fit your dollar budget. Margin is a deposit, not a cap on the loss, so it plays no part in the count.

A copper example with a made-up price of $4.50 a pound (not a current quote). The chart puts the stop $0.0150 below entry, which is 30 ticks, and you will risk $150 at most. One HG contract controls $112,500 of copper and loses $375 at that stop, so it doesn't fit and the answer is 0 HG. One MHG controls $11,250 and loses $37.50, so 4 MHG fit for $150 of risk.

Those 4 MHG are $45,000 of copper, about 300 times the $150 at risk. Nothing breaks while the stop fills where you placed it. A gap is what hurts, because you pay for the full jump: $25 per MHG for every one-cent move in copper, and $250 per HG. The fixed-dollar position sizing guide has the method in general form, the walkthrough on placing stops at structure covers where the stop goes, and the margin call explainer covers what happens when equity drops below the requirement.