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A Complete Trading Guide In Commodity Trading

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  #1  
Old 29th August 2005, 10:43 PM
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Lightbulb A Complete Trading Guide In Commodity Trading

Hi Traders....

I am looking that lots of people are interested in Commodity Trading looking @ the returns it provide in short time.

This thread is for Beginers who dosent have any idead about commogity trading and also dont know how to trade in futures Trading!!!

Step1> U need to open an account with a broker who is Registered with MCX OR NCDEX.

Step2> After doing that, u need to select one or more than one commodities that u r interested in trading..
like, gold, silver, crude, guar, chana etc..

Step3> Now.... For a given commodity,, u have 3 to 6 contracts open that are identified by month and expires on a fixed date on that month. eg. gold sept,oct etc...

Step4> All u need to do is place an order either to buy or sell(u can do both without owing physical quantity).
Every commodity has a minimum trading size.
eg. gold has 100 gms(mcx) to 1 kg(ncdx), silver 30 kg, guar,chana 10 tons(1000 kg). There for u can buy/sell minimun one or multiple of tick size..

Step 5> Now the payment Funda..
Futures trading is purely margin based trading similar in stock market.. Every commodity has a specified margin value by the exchange that is to b paid by you for trading.
The margin varies from 5% to 20%. Exchanges do change the margin periodically when market goes too much speculative...

Step6> Example:
lets say..I want to buy ncdx Chana sept contract currently trading @ 1920 Rs per quintal. I placed buy 1 lot(minimum) that is 10 tons. so the total amount calculated is 1 lack 90 thousands for 1 lot. So u hav to pay your broker only 6% of it. that is roughly 12000 Rs per lot..

If u dont sell that day itself and hold it, than your profit and loss will b calculated on "CLOSING MARKET PRICE".
so if the contract closes say 1910. that is -10.. so u have made a net loss of 1000 Rs. Simply saying every 1 rs gain or loss counts to 100 Rs profit/loss. (buying an selling one lot will cost u roughly 170 Rs brokerage)

Step 7>profit and losses are autometically debit/credited in your account on daily basis.. If your margin amount has fallen short.. ur broker will rang u up for a cheque.

step 8> Dont forget to square off your posotions before the contract expires. Otherwise u may need to give/take physical delevery og the good or face a penealty by the exchange..

I think i have explained a lot of things.. If any reader still have any query.. can ask on this thread...
views welcome...
u can visit my thread in commoditis--->grains for few tips

Readers dont forget to RATE this Thread..




Last edited by ncdx; 30th August 2005 at 08:23 PM.
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  #2  
Old 30th August 2005, 12:21 AM
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Default Re: A Complete Trading Guide In Commodity Trading

Thank you very much for that, NCDX. Now the equestion I have is: what are the indicators to keep tracking to speculate, and to find how our holdings are placed with respect to the market price? For example, in case of stocks, we keep checking the portfolio w.r.t the real time data from NSE. What is the equivalent source in case of Commodities? Please let us know.
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Old 30th August 2005, 07:56 AM
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Default Re: A Complete Trading Guide In Commodity Trading

Also in addition to bhangima"s question where is the historical eod data available?
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Old 30th August 2005, 09:08 AM
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Default Re: A Complete Trading Guide In Commodity Trading

Hi NCDX,
Thank you for the commodity thread, you have started. I would like to get some information regarding exclusively gold trading. Can you explain about it here. who is the reasonable and reliable broker for gold trading? How much is the margin money required? If we go to www.mcxindia.com we can get gold quotes. In the quotations there are many kinds like Gold, Goldm, Goldhni, Golddel, Goldahm etc. Which one is good for starters? Also which one is better for trading-MCX or NCDEX? The running competitive brokerage for gold trading? Can we get intraday ticks for commodities? Thank you in anticipation.
gvnarendra
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Old 30th August 2005, 08:03 PM
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Lightbulb Re: A Complete Trading Guide In Commodity Trading

Quote:
Originally Posted by bhangima
Thank you very much for that, NCDX. Now the equestion I have is: what are the indicators to keep tracking to speculate, and to find how our holdings are placed with respect to the market price? For example, in case of stocks, we keep checking the portfolio w.r.t the real time data from NSE. What is the equivalent source in case of Commodities? Please let us know.
Very very simple.........
For tracking ncdex & mcx commodities, their website provide 3 min delayed prices of all commodities. Trading starts from 10 am to 5 pm. Monday to friday and 10 to 2 pm on saturday except gold, silver, crude & copper their trading time is 10 am to 11.30 pm. full 13.5 Hrs.. phew..
Now website adds are
www.ncdex.com
www.mcxindia.com
Both privide real time feeds free of cost (not as real as actual terminal)

Well talking of speculations,,, an ordinary trader may not have as many contacts with large speculators.. so best way is to trade through a reputed Broker..
But i must say that agri commodities are nothing but so called "SATTEBAZI".. best example is guar seed, chana, tur, urad etc.. Starters should not trade in these commodities.. Gold, silver, crude, copper, soya, steel etc which r purely based on international factors are cosidered to be as "SAFE SIDE".
Any more question
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Old 30th August 2005, 08:07 PM
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Lightbulb Re: A Complete Trading Guide In Commodity Trading

Quote:
Originally Posted by vince
Also in addition to bhangima"s question where is the historical eod data available?

Both websites of mcx and ncdx provide all the historical data...
There is one very good website which provide free charts
check this out.......
http://www.commodityindia.com

For daily trading calls free of cost...log on to
www.icicidirect.com
>click on commodities..
>on center of page..click on any commodity..gold,silver
your on.....
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Old 30th August 2005, 08:22 PM
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Lightbulb Re: A Complete Trading Guide In Commodity Trading

Quote:
Originally Posted by gvnarendra
Hi NCDX,
Thank you for the commodity thread, you have started. I would like to get some information regarding exclusively gold trading. Can you explain about it here. who is the reasonable and reliable broker for gold trading? How much is the margin money required? If we go to www.mcxindia.com we can get gold quotes. In the quotations there are many kinds like Gold, Goldm, Goldhni, Golddel, Goldahm etc. Which one is good for starters? Also which one is better for trading-MCX or NCDEX? The running competitive brokerage for gold trading? Can we get intraday ticks for commodities? Thank you in anticipation.
gvnarendra


Well u have lots of questions on gold....
Let me answer one by one..
1>Gold trading is mostly done on MCX with highest avg volumes about Rs 1000 cror per day.. ncdx also have 1 kg gold trading contract with daily volume about 30-50 cror.

2>For trading in gold,, contact any Reputed Broker..let say
Sharekhan, 5paisa.com, angeltrade, motilal oswal, ridhhi siddhi bullions etc... or u will find many more exlusive mcx-ncdx Brokers in your locality.. so check out the best brokerage deals....(its about .04 to .06 %)

3>go for the contract which clocks the highest vloumes.. that is mcx gold futures,,u can easily find out that on live quotes page..

4>Brokerages are not exchange specified, they r fixed by brokers.. Exchange only fixes the "MARGIN AMOUNT" in % that is to b given by u through broker... I think gold margin is about 5%. For 1 kg gold lot your margin will b around 31000 Rs (@ rate of 6200/10 gm).

ok...
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Old 30th August 2005, 10:15 PM
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Default Re: A Complete Trading Guide In Commodity Trading

Thank you NCDX for the information. You have started a good learning thread which helps a lot for novices just like me.
gvnarendra
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Old 10th September 2005, 10:52 AM
amarnath
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Default Re: A Complete Trading Guide In Commodity Trading

Quote:
Originally Posted by qqqqqq
which is better MCX or NCDX ?........there is one problem.....i use ODIN for stock/shares trading, my broker provides commodities trading too but he says, a separate PC is to be used for it as both the registry of programmes used for STOCK & COMMODITIES may clash if one PC is used......anyone/solution ?


can't install ODIN on different directory with different name assigned like ODIN comm or ODIN 2 ?
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Old 30th September 2005, 10:40 PM
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Default Re: A Complete Trading Guide In Commodity Trading

Thanx for such a nice explanation. can you pl give further information where can one have the intra day as well as historical charts.


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