Nickel is one of the most versatile metals in the world and is used in several applications. Learn how to start trading with this beginner’s guide.
This beginner-friendly guide explains everything you need to know about trading nickel. Read on for a step-by-step guide on how to get started, find the best platforms to trade, and learn what the future holds for this popular commodity.
What is nickel? And why is it so valuable?
Nickel is a base metal that has been around for over 2000 years and is used in various products and industries. However, it is mainly used in the production of stainless steel. Although nickel is not as popular as precious metals like gold and silver, its demand in the infrastructure industry makes it an excellent commodity to trade.
What affects the price of nickel?
Like most markets, the price of nickel is influenced by supply and demand. Demand comes primarily from the infrastructure industry, the Chinese market, and increasingly from batteries.
Nickel is essential in the manufacture of stainless steel, which is commonly used in construction. China is the world’s largest consumer of nickel, and electric vehicle batteries all require nickel.
Indonesia, the Philippines, and Russia are the three largest suppliers of nickel in the world. Political instability in these countries can affect the price. For example, when Russia invaded Ukraine in 2022, nickel prices reached record levels as fears of European supply problems mounted.
How has nickel developed in recent years as a commodity?
Its price has steadily increased since the turn of the millennium. In 2022, the price reached a record high of over $100,000 per ton. The London Metal Exchange was forced to halt trading after supply fears mounted following Russia’s invasion of Ukraine.
The sustained price increase is due to growing demand from the electric vehicle sector. Tesla CEO Elon Musk was quoted as saying that nickel is badly needed to make electric vehicles.
Should I start trading nickel now?
If you are an experienced trader with a good understanding of the commodity market, you should consider trading nickel. If you are an inexperienced trader, nickel could still be a good market to trade. The price tends to move evenly, and many buying and selling opportunities exist. However, there can also be large swings, as in March 2022.
There are many ways to get exposure to the nickel market, and further down this page, we have explained the most common ones, such as stocks and ETFs. If you decide to trade nickel, it’s essential to keep up to date and up-to-date with the latest market news and analysis.
Trading nickel for beginners
Consider many things before trading nickel, especially for a beginner. However, the essential part of trading commodities is research. It is vital that you have a good understanding of how the nickel market works and what drives its price before making any trades. Below is helpful information on what you should do before trading.
What you should do before you start trading
Before trading nickel for the first time, you can use the following guide to prepare yourself. Following these steps can help you make the right decisions and avoid costly mistakes.
- Research the commodity. You need to research nickel and understand what it is used for, what drives its price, and what world events it influences. Good research will help you buy or sell at the right time.
- Make sure you understand the basics of commodity trading. There are many different ways you can trade nickel. You can consider nickel stocks, ETFs, or futures contracts; each has a different benefit.
- Decide between long-term and short-term trading. Depending on your research, you will prefer short-term or long-term trading. If you want to make quick profits, short-term trading may be best.
- Set a budget. Trading can be fast-paced, and it’s easy to get carried away with making many trades. You must set yourself a budget before you even start trading. This way, you know your risks in advance. You should only risk what you can afford.
- Find a broker platform. Some brokers are better suited to short-term trading, while others are more suited to trading for a more extended period of time. Choose the best one that suits your needs.
The different ways to trade nickel
You have the ability to trade nickel using many different methods and choosing the right method depends on your trading goals. Below we have explained the different ways to trade nickel to help you choose the right path.
Spot trading in nickel
The spot market is mainly used by short-term traders. The ‘spot’ is the current nickel price and is typically traded using Contracts for Difference (CFDs). You can use spot trading to bet on short-term price changes in nickel.
Nickel futures contracts
Futures contracts are simply an agreement to buy a commodity at a specific price in the future. This is another way to bet on short-term price changes, with futures trading best suited to experienced traders.
Trading nickel online – a step-by-step guide
Trading commodities is not a complicated process and is similar to trading other assets, such as cryptocurrencies and stocks. Use our step-by-step guide to get started.
- Find a broker. A broker is where you can buy and sell nickels. Choosing a broker with low fees and a user-friendly interface is advisable. Check out our expert picks to find a broker that’s right for you.
- Create an account. Once you have chosen your broker, you must set up an account before trading. All you have to do is provide your contact details and present an ID card for verification.
- Deposit money. The best brokers allow you to deposit funds into your account quickly and using various methods.
- Decide whether you want to go long or short. When you are ready to trade, you must decide whether to go long (buy) or short (sell). You can let things like technical analysis guide your decisions.
- Execute trade. To make a trade, you must search for nickel on your broker’s platform. When you are happy with the price, you can click buy or sell, and your nickel trade will be executed.
- Set stops and limits (optional). You can only recover if the price moves as you imagine. One way to protect yourself is to use a stop loss. This will automatically close your trade at a certain level.
