How To Start Commodity Trading in India?


The commodity trading is a good investing strategy and process that involves buying & selling of goods or raw materials. Commodities are defined as anything that is measured to be of value and quality that is more standardized, reliable, and is produced in huge amounts.

The original meaning of the commodity is that the metals, Agri products or raw materials, these are traded (bought and sold) one to another by the rules and regulation of particular commodity market exchange. This type of trading is called commodity trading.

List of Traded Commodity:

Agri Products: – Oats, Corn, Soybeans, Rough Rice, Soybean Meal, Rapeseed, Soybean Oil, Cocoa, Wheat, Coffee.

Live Stock and Meat: – Frozen Pork Bellies, Lean Hogs, Live Cattle and Feeder Cattle.

Energy: – Brent Crude, WTI Crude Oil, Natural Gas, Ethanol, Gulf Coast Gasoline, Heating Oil, Propane, RBOB Gasoline, Uranium.

Precious Metal: – Gold, Palladium, Platinum, Silver.

Industrial Metals: – Copper, Zinc, Lead, Aluminum, Tin, Aluminum alloy, Nickel.

Various Fees Pay in Commodity Trading?

  • Brokerage Fees
  • Service Tax as per the rates applicable
  • Exchange Transaction Fees
  • Stamp Duty: As per State Law

How to Start Commodity Trading?

First and most important things when you start trading and investing in the commodities is demat account. The main purpose of demat account hold your all shares, stocks and commodities contracts. There are lots of brokerage firm that offering damat account. Now days many banks are offering demat account for his clients making a big deal. But I would like to inform you to always go with the advisory or broking firm such as TRIFID RESEARCH they provide commodity market news, data, information’s, better Commodity Tips and services. Contact your nearer broker and activate your commodity market trading account.  For this producer, broker may vary brokerage charge, while many brokers also provide for free.

Types of Commodity Exchange:

There are three types of exchange in India similar to NSE and BSE. That can provide an electronic trading platform and more reliable settlement system and a national presence.

  • National Commodity and Derivative Exchange (NCDEX)
  • Multi Commodity Exchange (MCX)
  • National Multi Commodity Exchange (NMCX)

Multi Commodity Exchange (MCX):

This is an electronic exchange of commodity future market. This exchange offer approximates 40 commodities in the various segments, for example, ferrous & non-ferrous metals, bullion, energy on this platform. Many standardized commodity future agreements are available on this platform for trading. Many advisory firms can provide free MCX Tips at first, then after it takes his fees.

Multi Commodity Exchange has been certified to 3 major ISO standards.

  • ISO 9001:2008 Quality Management System standard.
  • ISO 14001:2004 Environmental Management System standard.
  • ISO/IEC 27001:2005 Information Security Management System standard.

National Commodity and Derivative Exchange (NCDEX):

  • Professionally, NCDEX is controlled by online MCX. The investors of NCDEX contains of the large public sector bank, large national level institutions and companies.
  • NCDEX is generated on April 23, 2003 according to 1956 companies act. This is a public limited company.
  • NCDEX is handled by the Forward Markets Commission (F.M.C). NCDEX is worked to various laws and rules of the land like the Companies Act, Contract Act, Forward Contracts (Regulation) Act, Stamp Act and different other legislations.
  • NCDEX head branch is located in the Mumbai and offers services to its clients from the centers situated throughout India.
  • NCDEX is the India’s second biggest commodity derivatives exchange, has been registered agreement since 2003. Trading in NCDEX market is very difficult and more complicated. But many experts and brokers can provide live Commodity NCDEX Tips for better trading.

Minimum Investment Amount:

If you want to invest in the commodity market, firstly you can choose your segment in investing at least 5000/-.  In this, you have to pay some margin money, which is depending on broker and product to product. Generally it may be 5% to 10% of commodity goods or products. For example, one lot size of silver metals (1 kilogram) the margin money has required 9,500 if the live price of silver 60,000/kg. Then the price of your 1 lot size of a silver (1 kg) futures contract is only 9,500.if the silver market prices are increasing by 500/- in next day. Then after Rs 500/- automatically will submit in your Demat account. Same as If the rate is falling Rs 600/- then this amount will be automatically reduced in your account.  In this process your silver market trading has completed only 9500 without paying actual amount 60,000/-.  The margin money of the agricultural products and lot size is always changing exchange to exchange.

Every commodity market exchange provides you settle you all deal either with delivering or cash mechanism. In case if you want to be cash settled contract, so you should indicate this at the movement of placing the order, that you don’t physically deliver the products. If you want to get make and take delivery of physical products, you need to have the warehouse receipts.

We will suggest the best technique to enable you to have large profit.

>> Your Technique:-

If you want to observe the commodity market trend, look at any graph, chart and free Commodity Tips of any type of commodity and it these market trends you want to set in and always trade for profit.

The best technique to do this is among a technical trading system and you must be looking to buy and sell the long term commodity trends as these give up the highest profits.

There are many commodity trading techniques available, but very crucial and important point always keeps in mind, That method you have embraced have confidence in it and why it will work.

If you are buying something and don’t understand or try and always follow an adviser. If you do that, you have lack confidence and probably you will find the loss from your method.

The most important attribute an investor can have is more discipline.

You should it to apply your technique. If you don’t follow discipline, you will really find the loss.

>> Commodity Trading Best Markets To Trade:-

Trending nature & liquidity are the most vital key factor for deciding the markets to trade.

While every commodities market trend, many tend to suggest better, more consistent commodity trends than others.

Commodity market fields that offer good and reliable trends contain – Energies, agriculture’s and interest rates, these are excellent for all traders.

They also suggest liquidity, which means deals can be entered & exited rapidly, to lock in earnings or liquidate losing trades.

Several commodities have erratic trading patterns & low liquidity and these must be avoided.

>> Diversification:-

If you think about money and make it fast DON’T diversify much more. Always stay to one or some areas only. Diversification decreases profit potential. If you trade in one sector and have confidences in it don’t diversify across to several sectors.

>> Success has you in it!

If you want to do trading in commodity and make money very fast you should take responsibility and awareness for your trades. If trader losing money in commodity market he can blame everyone else the whole system they have market conditions and situation as the wife – and much more.

However, successful traders always take responsibility, they recognize that, they can get whole system and information elsewhere, but it is up to them to affect the tools for earnings.

If you have more knowledge about commodity trading so you can make money very fast, if you have confidence in robust trading technique the discipline to follow it rigidly and the hasty to take compute the risks to reach your aims.

Approach commodity product trading with the best attitude and you can make money very fast and always pile up big returns consistently.

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