Best Commodity Trading Tips
The commodity is interchangeable goods that we can buy or sell for the purpose of commerce. It can be interchangeable with the commodity of the same type.
Commodities are included agriculture goods, fuels, metals.
The commodity can also be used to produce other products which can be goods or maybe service. It can be used as input to produce other products.
Commodity products can be used in daily life as well. Like Black Pepper, Cardamom, Cotton, Rubber, etc.
The production of it huge in India in comparison to the other countries.
Markets In India
There are many commodity markets in India located in different cities. India has a long history in the commodity as compared to other countries.
India mainly has six national commodity exchanges running at different places.
Multi Commodity Exchange (MCX), National Commodity and Derivatives Exchange (MCDE), National Multi-Commodity Exchange (NMCE), Indian Commodity Exchange (ICEX), Universal Commodity Exchange (UCX), ACE Derivatives Exchange (ACE).
Multi Commodity Exchange is the most popular and most traded exchange in India. MCX provides traders a platform to try their money in the market. It was established in 2003 in Mumbai, India.
It provides the facility to trade in all the commodity products like Energy, Metals, Bullion and various agriculture products.
Types Of Commodity Trading Products
There are various kinds of commodity product are available to trade. Like energy, metals, agriculture product, etc. Traders get so many options to trade which depends on the demand of the particular commodity.
Multi Commodity Exchange (MCX) has the different product listed in it and some of are-
Bullion: Gold, Gold Mini, Gold Guinea, Gold Petals, Silver, Silver Mini, Silver Micro.
Base Metals: Aluminium, Aluminium Mini, Brass, Copper, Copper Mini, Lead, Lead Mini, Nickel.
Energy: Crude Oil, Crude Oil Mini, Natural Gas.
Agri Commodities: Black Pepper, Cardamom, Castor Seed, Cotton, Crude Palm Oil, Mentha Oil, RBD Palmolein, Rubber.
Commodity Trading Tips
There so many things a trader needs to remember while trying money in commodity trading. Some of the best commodity trading tips are-
Basic Knowledge: Always have a basic knowledge of the commodity market. As it operates differently as compared to the stock market. If we compare strategies, tricks are different.
So do not come with the knowledge of the stock market into the commodity market.
Broker: You can take the help of a broker if you are new in the commodity market. The broker can help you to gain market insights and to choose the right commodity to invest.
Diversify Investment: The most important thing to remember while investing is to invest in different commodities. It can lower your risk and increase the chances of getting profit.
Strategy: Having a strategy in the market is very important. Strategies help you to know the right time, the right product, and what should be the right amount to invest in it.
Invest Slowly: Don’t try to put whole money into a single commodity. Understand the market demand of the commodity you trying to put money in. Then decide whether is it right to put money in or wrong.
Stop Loss: Always maintain stop loss as it helps you to minimize possibilities of loss in a condition of the price of the commodity goes down.
Stay Updated: One you placed the order then always stay updated about the movement of the product. And then buy or sell at the right time.
These are the best commodity trading tips.
Advantages Of Commodity Trading
Diversify Investment: Commodity helps you to diversify investment. Each product in the commodity has its own benefits and movement so it helps you to diversify investment by investing in a different product.
Liquidity: Commodity offers high liquidity when you invest money in it. You can buy or sell the commodity any time you want.
Growth: Commodity provides you a great chance to grow in the market. The demand for commodities increases by the time passes. So it provides chances to grow in the market and earn the profit.
Profit: Commodity experience huge swing in price. Like demands of commodity product increases in a certain period. An experienced trader can take advantage of it and can get a return. But trade should be a well-planned trade.
Disadvantages Of Commodity Trading
Timing Of Trading: At the time of trading you have to inform the broker about the product you want to invest in. And then the broker will look at the product and then after getting all the detail, he will trade on it. It a bit time-consuming process.
Volatile: It is very volatile as it experiences a lot of movement in the price of the product so it brings risk with it. So a trader should have enough experience of guidance to survive in the market.
Physical Delivery: Physical deliver sometime creates a problem for the trader if wanted to get it. Imagine someone is getting any commodity full of the truck at an odd time. It won’t be comfortable for you to have it.
Leverage: You can trade in the low margin in the commodity but low margin encourage poor money management. That brings unnecessary risk. So it gives not only good profit but it can come with big losses as well.
If you are looking for more tips so you can read the Most Accurate MCX Tips Provider.