Cotton
Cotton trading can be used to bet on global stockpiling, hedge against inflation, and speculate on oil prices. Its widespread application in the textile industry makes it a popular soft commodity with online traders. This manual unpacks key manufacturing countries and companies, strategy considerations, market economics, and cotton trading vehicles. Our experts have also reviewed and ranked the top cotton brokers:
Best Cotton Brokers UK
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Founded in Australia in 2010, Pepperstone is a highly regarded broker specialising in forex and CFDs. Serving more than 400,000 clients globally, it provides access to over 1,300 financial instruments through popular platforms like MT4, MT5, cTrader, and TradingView. Its fee structure is both low and transparent. With regulation by reputable bodies such as the FCA, ASIC, and CySEC, Pepperstone guarantees a safe trading environment for traders at every level.
Instruments Regulator Platforms CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto (only Pro clients), Spread Betting FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
Established in Poland in 2002, XTB caters to over a million clients worldwide. This forex and CFD broker offers a robust regulatory framework, a diverse range of assets, and prioritises trader satisfaction. It provides an intuitive proprietary platform equipped with excellent tools to support aspiring traders.
Instruments Regulator Platforms CFDs on shares, Indices, ETFs, Raw Materials, Forex currencies, cryptocurrencies, Real shares, Real ETFs FCA, CySEC, KNF, DFSA, FSC, SCA, Bappebti xStation Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 -
Founded in 2006, FxPro has built a reputation as a reliable non-dealing desk (NDD) broker, providing trading access across more than 2,100 markets to over 2 million clients globally. It has received over 100 industry awards, reflecting its favourable conditions for active traders.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Futures, Spread Betting FCA, CySEC, FSCA, SCB, FSA FxPro Edge, MT4, MT5, cTrader, AutoChartist, TradingCentral, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $100 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
IC Trading belongs to the reputable IC Markets group. Designed for dedicated traders, it offers highly competitive spreads, dependable order execution, and sophisticated trading tools. However, it operates from Mauritius, an offshore financial centre, allowing high leverage but within a less regulated environment.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Bonds, Cryptos, Futures FSC MT4, MT5, cTrader, AutoChartist, TradingCentral Min. Deposit Min. Trade Leverage $200 0.01 Lots 1:500 -
eToro, a leading multi-asset platform, provides access to trading services across thousands of CFDs, stocks, and cryptocurrencies. Established in 2007, it boasts millions of active traders worldwide and is sanctioned by top-tier regulators such as the FCA and CySEC. It stands out for its extensive social trading feature. Crypto investments are unstable and carry risk. Tax implications might apply. Acknowledge the risks involved. 61% of retail CFD accounts incur losses.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, ETFs, Smart Portfolios, Commodities, Futures, Crypto, NFTs FCA, ASIC, CySEC, FSA, FSRA, MFSA, CNMV, AMF eToro Web, CopyTrader, TradingCentral Min. Deposit Min. Trade Leverage $50 $10 1:30 -
Established in 1999, FOREX.com is now integrated into StoneX, a prominent financial services entity catering to more than one million clients globally. The broker is regulated in numerous jurisdictions, including the US, UK, EU, and Australia. It offers a vast array of markets beyond forex, delivering competitive pricing on state-of-the-art trading platforms.
Instruments Regulator Platforms Forex, CFDs, Stock CFDs, Indices, Commodities, Futures, Options, Crypto NFA, CFTC, CIRO, FCA, CYSEC, ASIC, SFC, FSA, MAS, CIMA WebTrader, Mobile, MT4, MT5, TradingView Min. Deposit Min. Trade Leverage $100 0.01 Lots 1:30 -
Fusion Markets, an online broker since 2017, operates under the regulation of ASIC, VFSC, and FSA. Renowned for offering cost-effective forex and CFD trading, it provides various account options and copy trading solutions to suit diverse trading needs. New clients can begin trading with a simple three-step registration process.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Crypto ASIC, VFSC, FSA MT4, MT5, cTrader, TradingView, DupliTrade Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:500
Safety Comparison
Compare how safe the Cotton are and what features they offer to protect traders.
Broker | Trust Rating | FCA Regulated | Negative Balance Protection | Guaranteed Stop Loss | Segregated Accounts |
---|---|---|---|---|---|
Pepperstone | ✔ | ✔ | ✘ | ✔ | |
XTB | ✔ | ✔ | ✔ | ✔ | |
FXPro | ✔ | ✔ | ✘ | ✔ | |
IC Trading | ✘ | ✘ | ✘ | ✔ | |
eToro | ✔ | ✔ | ✘ | ✔ | |
Forex.com | ✔ | ✔ | ✘ | ✘ | |
Fusion Markets | ✘ | ✔ | ✘ | ✔ |
Payments Comparison
Compare which popular payment methods the Cotton support and whether they have trading accounts denominated in British Pounds (GBP).
Broker | GBP Account | Debit Card | Credit Card | Neteller | Skrill | Apple Pay |
---|---|---|---|---|---|---|
Pepperstone | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
XTB | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
FXPro | ✔ | ✘ | ✔ | ✔ | ✔ | ✘ |
IC Trading | ✔ | ✔ | ✔ | ✔ | ✘ | ✘ |
eToro | ✔ | ✔ | ✘ | ✔ | ✔ | ✘ |
Forex.com | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
Fusion Markets | ✔ | ✔ | ✔ | ✔ | ✔ | ✘ |
Mobile Trading Comparison
How good are the Cotton at mobile trading using apps or other mobile interfaces.
Broker | Mobile Apps | iOS Rating | Android Rating | Smart Watch App |
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Pepperstone | iOS & Android | ✘ | ||
XTB | iOS & Android | ✔ | ||
FXPro | iOS & Android | ✘ | ||
IC Trading | iOS & Android | ✘ | ||
eToro | iOS & Android | ✘ | ||
Forex.com | iOS & Android | ✘ | ||
Fusion Markets | iOS & Android | ✘ |
Beginners Comparison
Are the Cotton good for beginner traders, that might want an affordable setup to get started, along with good support and educational resources?
Broker | Demo Account | Minimum Deposit | Minimum Trade | Support Rating | Education Rating |
---|---|---|---|---|---|
Pepperstone | ✔ | $0 | 0.01 Lots | ||
XTB | ✔ | $0 | 0.01 Lots | ||
FXPro | ✔ | $100 | 0.01 Lots | ||
IC Trading | ✔ | $200 | 0.01 Lots | ||
eToro | ✔ | $50 | $10 | ||
Forex.com | ✔ | $100 | 0.01 Lots | ||
Fusion Markets | ✔ | $0 | 0.01 Lots |
Advanced Trading Comparison
Do the Cotton offer features that allow for more advanced trading strategies?
Broker | Automated Trading | Pro Account | Leverage | VPS | AI | Low Latency | Extended Hours |
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Pepperstone | Expert Advisors (EAs) on MetaTrader | ✔ | 1:30 (Retail), 1:500 (Pro) | ✔ | ✔ | ✔ | ✘ |
XTB | Open API | ✔ | 1:30 | ✘ | ✘ | ✔ | ✘ |
FXPro | Expert Advisors (EAs) on MetaTrader, cBots on cTrader | ✔ | 1:30 (Retail), 1:500 (Pro) | ✔ | ✘ | ✔ | ✘ |
IC Trading | Expert Advisors (EAs) on MetaTrader, cBots on cTrader | ✘ | 1:500 | ✔ | ✘ | ✔ | ✘ |
eToro | Automate your trades via CopyTrader - follow profitable traders. Open and close trades automatically when they do. | ✘ | 1:30 | ✘ | ✔ | ✘ | ✔ |
Forex.com | Expert Advisors (EAs) on MetaTrader | ✘ | 1:30 | ✔ | ✔ | ✔ | ✘ |
Fusion Markets | Expert Advisors (EAs) on MetaTrader, cBots on cTrader | ✘ | 1:500 | ✔ | ✘ | ✔ | ✘ |
Detailed Rating Comparison
Use this heatmap to compare our detailed ratings for all of the Cotton.
Broker | Trust | Platforms | Mobile | Assets | Fees | Accounts | Support | Research | Education |
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Pepperstone | |||||||||
XTB | |||||||||
FXPro | |||||||||
IC Trading | |||||||||
eToro | |||||||||
Forex.com | |||||||||
Fusion Markets |
Our Take On Pepperstone
"Pepperstone is a premier trading platform, providing tight spreads, swift execution, and sophisticated charting tools for seasoned traders. Beginners benefit from no minimum deposit, comprehensive learning materials, and outstanding 24/7 support."
Pros
- The award-winning customer support can be accessed through phone, email, or live chat. During tests, response times have consistently been under 5 minutes.
- Support for top-tier charting platforms such as MT4, MT5, TradingView, and cTrader. These tools accommodate different short-term trading methods, including algorithmic trading.
- Pepperstone presents itself as an economical choice for traders, offering spreads as low as 0.0 in its Razor account. The Active Trader programme provides rebates up to 30% on indices and commodities, plus $3 per lot on forex.
Cons
- Pepperstone doesn't offer cTrader Copy, a favoured feature for copying trades found in the cTrader platform, which is available on other platforms such as IC Markets. However, Pepperstone has launched its own user-friendly copy trading app.
- Although its market range has improved, its crypto offerings remain limited compared to brokers specialising in this sector, lacking real coin investment options.
- Pepperstone's demo accounts expire after 30 days, which may not provide sufficient time to explore various platforms and evaluate trading strategies.
Our Take On XTB
"XTB emerges as an ideal option for novice traders, offering the impressive xStation platform, zero commission pricing, no required minimum deposit, and outstanding educational resources, many of which are conveniently integrated into the platform."
Pros
- The xStation platform stands out with its user-friendly design and intuitive tools, such as adaptable news feeds, sentiment heatmaps, and a trader calculator. These features streamline the learning process for new traders.
- XTB offers a diverse range of over 7,000 instruments, including CFDs on shares, indices, ETFs, commodities, forex, and cryptocurrencies. The platform also provides real shares, real ETFs, share dealing, and the latest addition, Investment Plans, serving both traders seeking short-term gains and investors focused on long-term growth.
- XTB ensures swift access to funds, providing fast withdrawals with same-day payments for requests made before 1 pm.
Cons
- Trading fees are competitive, with average EUR/USD spreads of about 1 pip. However, they are not as low as the most affordable brokers, such as IC Markets. Additionally, an inactivity fee applies after a year.
- XTB has stopped supporting MT4, restricting traders to its own platform, xStation. This decision may discourage experienced traders accustomed to using the MetaTrader suite.
- The research tools at XTB are commendable but have the potential to excel further. Enhancing them with access to top-tier third-party services like Autochartist, Trading Central, and TipRanks would significantly elevate their offering.
Our Take On FXPro
"FxPro is an excellent choice for traders, offering swift execution speeds under 12ms, reduced fees since 2022, and outstanding charting platforms like MT4, MT5, cTrader, and FxPro Edge."
Pros
- FxPro uses a 'No Dealing Desk' (NDD) model for swift and transparent order execution, usually within 12 milliseconds, making it well-suited for short-term trading strategies.
- FxPro's Wallet is a notable feature enabling traders to securely manage their funds. It ensures additional protection and ease by separating unused funds from active trading accounts.
- FxPro provides four dependable charting platforms, including the user-friendly FxPro Edge. It features more than 50 indicators, 7 types of charts, and 15 different timeframes.
Cons
- FxPro offers customer support five days a week around the clock, accessible via various platforms, and the service quality is reliable based on tests. However, the absence of weekend support can be a drawback for traders requiring help beyond standard market times.
- There are no passive investment options such as copy trading or interest on cash. While traders might not find these essential, competitors like eToro, which accommodate both active and passive investors, offer more extensive services.
- FxPro, with its $10M funded demo account and expanding Knowledge Hub, mainly caters to experienced traders. Beginners might find its account and fee structure challenging to understand.
Our Take On IC Trading
"IC Trading offers an ideal environment, featuring top-tier execution speeds of around 40 milliseconds, extensive liquidity, and advanced charting tools, perfect for scalpers, traders, and algorithmic traders."
Pros
- The streamlined digital account setup allows traders to commence trading swiftly, eliminating lengthy paperwork. Testing shows the process takes mere minutes.
- Trading Central and Autochartist provide valuable technical analysis and actionable ideas. These tools are readily available within the account area or on the cTrader platform.
- IC Trading provides exceptional flexibility, allowing traders to open as many as 10 live accounts and 20 demo accounts. This enables the management of distinct profiles for various activities, including manual and algorithmic trading.
Cons
- Customer support was inadequate during testing, with multiple live chat attempts going unanswered and emails ignored. This raises significant concerns regarding their capacity to manage urgent trading issues.
- The educational materials require significant enhancement unless accessed via the IC Markets website. This limitation is particularly disadvantageous for beginners seeking a thorough learning experience, especially when compared to industry leaders such as eToro.
- Unlike IC Markets, IC Trading lacks support for social trading via the IC Social app or the ZuluTrade platform.
Our Take On eToro
"eToro's social trading platform excels with its outstanding user experience and lively community chat, aiding beginners in spotting opportunities. It offers competitive fees on numerous CFDs and real stocks, alongside exceptional rewards for seasoned strategists."
Pros
- eToro has launched automated crypto staking, offering a pathway to passive income. However, Ethereum requires users to opt in.
- Leading traders participating in the broker's Popular Investor Programme can earn yearly compensation of up to 1.5% of the copied assets.
- eToro secured second place in DayTrading.com's 'Best Crypto Broker' for 2025, offering a vast selection of tokens, dependable service, and competitive fees.
Cons
- The only significant contact option, besides the in-platform live chat, is limited.
- The absence of extra charting platforms such as MT4 may deter experienced traders who rely on external software.
- There are no assured stop-loss orders, which could be a valuable risk management tool for novice traders.
Our Take On Forex.com
"FOREX.com excels in serving traders of all levels, offering more than 80 currency pairs, spreads starting at 0.0 pips, and competitive commissions. Its robust charting platforms provide over 100 technical indicators and comprehensive research tools."
Pros
- With more than two decades of expertise, strong regulatory governance, and numerous accolades, including a second-place finish in our 'Best Forex Broker' awards, FOREX.com is globally renowned as a reliable trading platform.
- An abundance of educational resources is available, such as tutorials, webinars, and an extensive YouTube channel, designed to enhance your understanding of financial markets.
- The in-house Web Trader remains a standout platform, excellently crafted for budding traders. It features a sleek design and offers more than 80 technical indicators for thorough market analysis.
Cons
- Demo accounts are typically limited to 90 days, hindering effective strategy testing.
- Funding choices are restricted when compared to top options such as IC Markets. Many popular e-wallets, including UnionPay and POLi, are noticeably absent.
- US clients are not protected against negative balances, which means you could end up owing more than your initial deposit.
Our Take On Fusion Markets
"Fusion Markets offers forex traders competitive pricing with minimal spreads, low commissions, and new TradingView integration. It is an excellent choice, especially for Australian traders, given its base and regulation by ASIC."
Pros
- Fusion Markets consistently impresses traders with its competitive pricing, featuring tight spreads and lower-than-average commissions. These cost-effective options are particularly attractive to those engaging in frequent trading.
- Fusion Markets provides algo traders with a sponsored VPS and offers a 25% discount for choosing the NYC Servers VPS for MT4 or cTrader.
- The market analysis tools, Market Buzz and Analyst Views, are excellent for identifying opportunities and are seamlessly incorporated into the client dashboard.
Cons
- Traders from outside Australia need to register with loosely regulated international firms that offer limited protection, lacking both safeguards and negative balance protection.
- Fusion Market falls short compared to competitors like IG in education, offering few guides and live video sessions for enhancing trader skills.
- The broker stands out with its extensive selection of currency pairs, surpassing most competitors. However, its alternative investment options are merely average, lacking stock CFDs outside the US.
Cotton Trading Basics
Cotton is primarily used in the textile industry to make clothing, bedding, and curtains. Its application also extends to a variety of other items, including tents, book binds, bank notes, and even gear for astronauts.
The price of cotton can fluctuate for a variety of reasons, including government subsidies, an increase or decrease in the production of competing materials, plus sales of stockpiles by key suppliers like India and China.
The Intercontinental Exchange (ICE) plays an important role in trading futures and options in the soft commodity. Futures are standardised agreements to buy or sell an asset at a predetermined price and date in the future. ICE cotton futures are a key benchmark for the global cotton industry.
Traders can speculate on the price of the cotton through a variety of vehicles, from futures and options to CFDs and stocks in companies involved in the cotton industry.
History
Cotton trading dates back centuries and was one of the first commodities traded on a global scale. Initially, it was mainly produced in India and exported to Europe. The market was dominated by British companies, who played a significant role in shaping the global cotton trade.
By the mid-1800s, the United States had surpassed India as the world’s largest cotton producer, and cotton trading had become a global industry.
Between 2000 and 2010, world cotton production increased from 89 million bales to 117 million bales, a 32% increase. During this time, China emerged as the largest consumer of cotton, consuming over 50% of the world’s supply. Additionally, the use of technology in cotton trading increased, with electronic trading platforms such as ICE becoming popular.
Post-2000s, cotton trading continues to be a vital part of the global economy. Cotton is still one of the world’s most important cash crops, with an estimated 20 million people involved in its production.
The market is highly competitive, with companies from around the world involved in cotton trading. Technological advancements have further increased the efficiency of cotton production and investment, with the use of blockchain technology and artificial intelligence becoming more prevalent.
Cotton is still mainly produced in countries with weather that accommodates cotton crops, such as India or Pakistan, however it is traded globally including in the UK.
Price Chart
Factors That Influence The Price Of Cotton
- International demand and supply: The global supply and demand of cotton is a major factor in its price, and fluctuations in demand from major importers such as China play a key role.
- Economic indicators: Inflation rates, exchange rates, and interest rates can impact the price of cotton. If the value of the dollar rises against other currencies, this can lead to a decrease in the price of cotton as it becomes more expensive for foreign buyers.
- Weather patterns: If weather conditions are unfavourable for cotton crops, such as droughts or heavy rains, this can limit the supply of cotton and increase its price.
- Government policies: Trade agreements and subsidies can influence the price of cotton. If a government provides subsidies to cotton producers, this can increase supply and lower prices.
- Technology: Technological advances in cotton production can impact the price of cotton. If new technology makes it easier and more cost-effective to produce cotton, this can increase the supply and lower prices.
- Production costs: If companies face pressure from high production costs, this can limit the supply of cotton and increase its price.
Benefits Of Trading Cotton
- Cotton is volatile which opens up opportunities for profit
- It can be used to speculate on rising oil prices due to a high correlation
- Similar to other commodities, it can be used as a hedging tool against inflation
- Cotton trading is available through various vehicles, including leveraged CFDs, futures and options
Risks Of Trading Cotton
- High volatility also increases the chance of large losses
- Cotton is heavily influenced by weather conditions which can be hard to predict
- Cotton is primarily traded by large firms and institutions so the choice of retail brokers is limited
How To Trade Cotton In The UK
There are several ways for UK traders to participate in the cotton trading market:
- Stocks: Buying and selling shares of companies in the cotton industry, either through the production or sale of related items like clothes, is another way to bet on cotton prices. Importantly, share dealing is a more indirect way to speculate on the price of cotton. Popular cotton stocks include Deere & Company and FMC Corporation.
- ETFs: Cotton ETFs provide exposure to the soft commodity, alongside other assets, such as agricultural commodities. They are essentially a group of assets traded on an exchange, reducing risk through diversification. Popular cotton ETFs include the iPath Series B Bloomberg Cotton Subindex Total Return ETN.
- CFDs: A popular choice among UK retail traders who want to speculate on cotton prices without taking ownership of the physical commodity. By using CFDs, traders can open positions that bet on the future direction of cotton prices. With the use of leverage, traders can also amplify their potential profits or losses. CFDs do not have a fixed expiration date, so traders can hold their positions for as long as they want, though they are typically used for short-term trading strategies.
- Futures: Cotton futures are contracts that allow traders to buy or sell cotton at a predetermined price and date in the future. These contracts are primarily traded on commodity exchanges such as the Intercontinental Exchange (ICE). Futures contracts are commonly used for hedging, a risk management strategy that allows traders to protect themselves from price fluctuations in the cotton market. They can also be used for speculative purposes.
- Options: Cotton options are contracts that give the holder the right, but not the obligation, to buy or sell a specific amount of cotton at a predetermined price and time in the future. They provide traders with the flexibility to limit their potential losses to the premium paid for the option.
Comparing Cotton Trading Brokers
- Fees: Compare the fees charged, including spreads, commissions, and any payment fees. Pepperstone, for example, offers cotton CFDs with a 0.16 minimum spread, 1:50 leverage, and a contract size of 10,000 lbs.
- Trading platform: Look for cotton brokers with a user-friendly trading platform that has advanced charting tools and technical indicators. Make sure the platform is stable and fast, and that it can be accessed on different devices, such as your mobile phone via an app. MT4, MT5 and TradingView are popular picks.
- Range of assets: Check the range of cotton contracts and other commodities offered by the broker, as well as other markets such as stocks and forex. This will allow traders to build a diverse portfolio. XTB, for instance, offers 28 commodities (including cotton), plus thousands of stocks CFDs, indices, ETFs, forex, and cryptos.
- Demo account: Beginners should check if the broker provides a demo account or virtual trading environment. This allows traders to practice trading cotton without risking real money. Also, look for educational materials such as webinars, video tutorials, and eBooks.
- UK regulation: Verify that the brokerage is regulated by a reputable authority, such as the FCA. Also ensure that the broker has a strong track record and positive reviews from other traders. Also check for contact number details in case of any issues.
- Additional tools: The best cotton brokers offer expert insights and data into the soft commodity. They will also provide an economic calendar with upcoming events and news that could impact cotton prices.
Cotton Trading Hours
Investors can trade cotton futures on multiple exchanges, such as the Singapore Exchange (SGX), however, the Intercontinental Exchange (ICE) is typically the exchange of choice for UK traders. The trading hours of the ICE for cotton traders are:
- Sunday to Friday: 8:00 PM to 7:00 PM GMT
- Last trading day of the month: 8:00 PM to 3:00 PM GMT on the next day
Bottom Line On Cotton Trading
Cotton trading provides exposure to a volatile soft commodity with widespread applications, including in textiles, homeware and industrials. It can be used to hedge against inflation, speculate on oil prices, and profit from supply and demand imbalances caused by the sale of global stockpiles, for example. Our list of leading cotton brokers offers trading through multiple vehicles, such as CFDs, ETFs, futures, and options.
FAQ
Do I Need To Be Able To Store Cotton If I Want To Trade It?
No, you can trade derivatives of cotton, such as contracts for difference, or CFDs. This means you are not an owner of the cotton so do not have to store it. Instead, you just speculate on whether the price of the commodity will rise or fall.
Can I Trade Cotton On Exchanges Other Than ICE Futures Europe?
Yes, UK residents can also trade cotton futures on other exchanges such as the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE) US. With that said, exchange availability varies between cotton brokers.
What Leverage Is Available On Cotton Trading Products?
Leverage levels depend on the broker and regulator. FCA-regulated brokers, for example, typically offer leverage between 1:10 and 1:50 on cotton CFDs. This includes big names like Pepperstone. Note, professional traders may be able to trade with leverage up to 1:200.
What Are The Best Cotton Trading Strategies?
Popular cotton trading strategies include trend following, swing trading, and breakout trading. Trend following entails identifying and trading in the same direction as a trend in the price of cotton. Swing trading is about taking advantage of short-term price swings, while breakout trading involves trading on the price movements that occur when the price breaks out of a key level of support or resistance.
Article Sources
Cotton outlook across prices, production, consumption and trade