In recent years there has been a spate of websites appearing that offer computerized commodity trading systems that proclaim their ability to be highly profitable. Not only do they make this claim, but they substantiate their claims by stating that the results shown are based on real trading, however if you look more closely you will find that the majority of the results are based on theoretical trading and tend to be very misleading. Many of these companies go on to claim that they can guarantee your success and that if you use their systems your investments will be highly successful.

The reality is a little starker and the US Commodities Futures Trading Commission has been quick to issue a warning to investors that no one can guarantee high profits with any form of automated commodities trading systems. Because of the liquidity and volatility of the commodities market, which is very similar to the volatility of options, these types of investments naturally carry a much higher risk than most other forms of investment. You should also note that frequent trading such as that triggered by these automated systems can cause you to incur heavy commissions and fees which may quickly erode any profits you might have made.

Automated commodity trading systems make use of computerized programming that is designed to help ordinary members of the public who have absolutely no experience in the markets make money. They use a series of carefully developed mathematical formulas to create recommendations rather than what may or may not be happening at any given moment on the market and do nothing to actually analyze the current market situation outside of the numbers on the board. For the investor this means the information provided is based on a hypothetical theory arrived at by comparing what has happened in the past with current price trends and then predicting what "should" happen in future and does nothing to take world events or leading economic indicators into consideration.

In other words the majority of these systems are designed to provide the user with buy and sell information based solely on what should happen in a perfect world. You may also find that sellers of these commodity trading systems slew the results they use to sell their systems by choosing to show you only those commodities that have a long history of yielding high returns. They want you to believe these are high yield safe investments so that you will buy their software. The majority of vendors do not tell you how much you are going to end up paying in commissions and fees, nor do they cover the costs of the spread that can dramatically affect your profits.

If you are considering using one of these systems you need to make sure that you take the time to learn more about trading and that you have the cash reserves to cover any losses that you might incur by using one of these automated systems. Take the time to research any of the commodity trading systems that you are considering using very carefully to make sure you understand the risks and the costs so that you are not going into using them blind. You can also check their credibility with the CFTC and the NFA before investing in one.