Step1: You require to open a Demat account with a good broker, who is Registered with the MCX OR NCDEX.
Step2: After performing that, you require to choose one or more than single commodities, that you are involved in trading (like Gold, Crude, Silver, Guar, Chana etc)
Step3: Now, For a giving commodity, you have three to six contracts or agreements open, that are recognized by month & expires on a pre decided date on that month. E.g. Gold Sept, Oct & so on.
Step4: All you require to do is put an order either to sell or buy with the proper guidance & Commodity Tips by the adviser or broker (you can perform both without remaining physical quantity). Each & every commodity has a minimum deal size. For e.g., Gold has 100 g.m. To 1 kg, silver 30 kg, Guar, Chana 10 tons (1000 kg). Therefore, you can sell or buy minimum one or several of tick size.
Step 5: Now the payment methods. Futures market trading is simply margin based dealing similar in the stock market. Every commodity product contract has a specified margin importance of the commodity exchange, that is to be already paid by you for the trading. The margin fluctuates from 5 to 20 percent. Exchanges do alter the margin sometimes, when marketplace goes too much speculation.
Step6 – Example :- I wish for to buy a NCDEX Chana Sept. contract at present trading 1920/- Rs per quintal. I purchased buy one lot (minimum) that is ten tons. So the whole amount calculated is approximately 1 lack 90 thousand for 1 lot. So you have to pay your commodity broker only 6 percent of it. That is generally 12000/- Rs per lot. If you don’t sell, that day itself & hold it, then your loss & profit will be calculated on “CLOSING MARKET PRICE”. So if the contract or agreement closes say 1910/-. That is -10, you have completed a net loss of 1000/- Rs. Simply saying each & every 1/- Rs loss or gain counts of 100/- Rs profit or loss. (Buying & selling one lot will charge you roughly 170/- Rs brokerage)
Step 7: Profit & losses are automatically debited or credited in your Demate account on a day by day basis. If your margin quantity has fallen very short. Your broker will call you up for a cheque.
Step 8: Don’t overlook to square off your situation before the agreement expires. Otherwise, you may require to give or take physical delivery of the good or give a penalty by the commodity exchange.
Do’s & Dont’s:-
It apparently looks to be the simplest & the most satisfying. But in Intraday market trading one has to be extremely fast, quick and have to be on your toes forever, so there are confident rules which everyone has to remain in mind
- If the index is in positive mark from yesterday and the whole commodity you are grasping is in minus, then it should be cut and if Intraday trend of the index is in buy then one must buy a commodity, which is in plus trend.
- If the index is in deficiency, then one must look to petite commodity which are shown minus and not commodities, which are in plus point.
- It is not essential that a commodity, which is feeble today during Intraday trading might be feeble tomorrow also, simultaneously, if a stock is in a strong position today might not be strong position tomorrow.
- If International trading markets have gone upward overnight, the trading markets here in every profitability will trade strong, so one must be quite careful, when buying commodity products as the common psychology of the community is to buy, when superior news is there.
- Being a contrarian is very significant while product trading Intraday.
- Stop Loss (SL) is a should while trading Intraday.
- Always buy and sell in very liquid commodity products, i.e. which have lofty volume because as entry & exit can be awfully fast in such as commodities.
- Do paper dealing before you really start trading, so that when initiate making paper earnings, then shift to definite trading.
- Keep your capacity constraint, e.g. if you want trade in 5 lots of Crude Oil futures, then buy and sell in 5 lots only. This trade position can be raised only when you are completely satisfied with your commodity trading for a month. It must not be that single day you buy 5 lots and after that day trade in 10 lots and 3rd day you get a loss & stop trading for 2 days.
- Fear & Greed are at utmost levels until trading Intraday so forever have less position, when you are novel to Intraday trading as or else you will be typically be under tension.
Why Lose Money?
Always never risk maximum 10% of your commodity trading capital on a one time trade. Always use SL (stop loss) orders.
Here you must know your whole loss you can provide in a situation, where the buy & sell starts going opposite you
- Always never do over trading in the market.
- Never let a takings run into a big loss.
- Don’t go into a trade, if you are uncertain of the market trend.
- When you are in doubt, get out and don’t enter, when in doubt.
- Only the trade in active trading markets.
- Distribute your whole risks equally among dissimilar markets.
- Never edge your orders. The trade at the trading markets.
- Additional monies from winning trades must be placed in a divide account.
- Don’t get out of the trading because you have lost your patience or get in, because you are nervously waiting.
- Avoid taking little profits & large losses.
- Never middling a loss.
- Never cancel a SL (stop loss) after you have positioned it.
- Avoid taking in and out of the commodity market too soon.
- Be willing to make a profit from both all sides of the trading market.
- Never trade just because the rate is upward or downward.
- Don’t hedge a losing position.
- Never modify your position without any good reason.
- Avoid market trading after very long periods of failure or success.
- Don’t try to judgement bottoms or tops.
- Don’t follow & a blind man’s advice. Only follow the Share Market Tips & Commodity MCX Tips the professional or market experts.
- Avoid obtaining in wrong and out incorrect; or getting correct and out incorrect. This is creating a double mistake.
- When you misplace, don’t blame it on your luck.
Why Retail traders lose money in the commodity market ?
- He is among the previous few people come in into the Bull Run.
- He keeps on varying a single commodity.
- Never place the stop loss (SL) in the system.
- Forever, the first one to the outlet from the commodity, which are under in the bull run, with smallest amount profit.
- Don’t have a routine of commodity trading with robotic method.
- By performing Emotional Trading, cutting down the positions early in profit and Holding the positions in Loss.
- Lack of knowledge and proper Commodity MCX & NCDEX Tips before entering into the commodity market.
- Lack of resources, data about the movements & news, which affects the whole commodity market.
- Too much gluttony from a solitary commodity.
- Day Dreaming in the commodity market also creates him suffer enormous losses
- Never bought & sold with the commodity trend of the markets.
- Fear in departing shorts in the commodity
- Was not clever to stay missing from the commodity market, when is sideways.
- Didn’t invested cash in sectors, which are the outperforming the index.
- Listening to chitchats and investing cash there.