Will Technical analysis work in Commodity Intraday Trading.

S

surya.nifty

New Member
#1
#1
Dear all,

I am completely new in commodities and just starting to learn with this post.
Its not fair at my end jumping and asking questions without learning anything on this, but still I hope u understand.....

My question is Will technicals work on commodities intraday and to what extent.

Stocks: In intraday context, when it comes to stocks, any individual stock has its own path and also is influenced to an extent by broad market, say nifty movement. So a trader can follow TA on stock price chart along with nifty and make trading decisions as per TA.

Commodities: when it comes to commodities lets take example of Gold.
Now what factors will influence gold price. Gold is traded internationally. So in India will gold move just parallel to International market? If that's the case why follow technicals in Our charts? And second point I see there are many contracts like gold mini, major etc. If we can follow TA on our gold futures chats then which contract should we follow? If I follow a simple MA crossover strategy, it may give a buy in gold mini but there can be no ma cross over in other contract of gold. How to overcome this.

And if I say TA works 70% in stocks what percent you give for TA in commodities.

thank you.
surya.
 
U

umeshmandal

Well-Known Member
#2
#2
TA alone works neither on Stocks nor on Commodities and for that matter on Debt or Forex ! Its the Trader whose discipline and money management along with TA that works.
If we consider only Paper Trading, Commodities (other than Agri), TA works as good on them as on Stocks!
 
A

ashu1234

Well-Known Member
#3
#3
surya.nifty said:
Dear all,

I am completely new in commodities and just starting to learn with this post.
Its not fair at my end jumping and asking questions without learning anything on this, but still I hope u understand.....

My question is Will technicals work on commodities intraday and to what extent.

Stocks: In intraday context, when it comes to stocks, any individual stock has its own path and also is influenced to an extent by broad market, say nifty movement. So a trader can follow TA on stock price chart along with nifty and make trading decisions as per TA.

Commodities: when it comes to commodities lets take example of Gold.
Now what factors will influence gold price. Gold is traded internationally. So in India will gold move just parallel to International market? If that's the case why follow technicals in Our charts? And second point I see there are many contracts like gold mini, major etc. If we can follow TA on our gold futures chats then which contract should we follow? If I follow a simple MA crossover strategy, it may give a buy in gold mini but there can be no ma cross over in other contract of gold. How to overcome this.

And if I say TA works 70% in stocks what percent you give for TA in commodities.

thank you.
surya.
Click to expand...
Hi,
Well what I see is TA is an art and not an exact science, so giving a percentage to evaluate it will not be correct.
In intraday trading parlance, I would say if one want to trade mostly on technicals(and zero fundamentals) then the more liquid an instrument is more the chances of trading patterns, averages and any other things which you may want to include in TA.
Now TA is such a thing, like you may get signals very frequently if you trade on smaller time frame, and if you go on a larger tf your stops may get wide and it needs a lot of patience to execute entries and exit, so timing and entry exit factor kicks in and results differ from person to person.

Now answering your commodities question, there are N number of factor influencing local commodities contracts like usdinr, local delivery premium and local levies which may change in the running contract which we have to adjust in price. And far month contract and current month contract do varry coz here we have delivery factor(gold silver in india, and in everything in international market) so demand for current month may or may not exceed demand for the coming many future months unlike stocks where price are almost similar as the only difference between subsequent futures is carry costs. So trade only in current contract and here keep track of fundamentals too.
Hope it helps.
 
S

surya.nifty

New Member
#4
#4
ashu1234 said:
Hi,
Well what I see is TA is an art and not an exact science, so giving a percentage to evaluate it will not be correct.
In intraday trading parlance, I would say if one want to trade mostly on technicals(and zero fundamentals) then the more liquid an instrument is more the chances of trading patterns, averages and any other things which you may want to include in TA.
Now TA is such a thing, like you may get signals very frequently if you trade on smaller time frame, and if you go on a larger tf your stops may get wide and it needs a lot of patience to execute entries and exit, so timing and entry exit factor kicks in and results differ from person to person.

Now answering your commodities question, there are N number of factor influencing local commodities contracts like usdinr, local delivery premium and local levies which may change in the running contract which we have to adjust in price. And far month contract and current month contract do varry coz here we have delivery factor(gold silver in india, and in everything in international market) so demand for current month may or may not exceed demand for the coming many future months unlike stocks where price are almost similar as the only difference between subsequent futures is carry costs. So trade only in current contract and here keep track of fundamentals too.
Hope it helps.
Click to expand...

Ashu,

my question is not just if ta works on commodities. yes ta works only to an extent on any instrument . MY query is if gold moves parallel to international market then what's point in following ta on our charts. Yes the other factors like usdinr, del factor will have effect on price, but those are not technicals.
My question is on the TA part. Even on stocks the price is effected by broad market, usdinr, interest rates, inflation etc all these external/funda factors but still we can follow ta on stocks Because stocks move on their own so TA should work on our charts. But in case of comm even discounting the others factors, how TA works on our charts when the price on our charts is actually derived from others markets.

surya.
 
S

surya.nifty

New Member
#5
#5
umeshmandal said:
TA alone works neither on Stocks nor on Commodities and for that matter on Debt or Forex ! Its the Trader whose discipline and money management along with TA that works.
If we consider only Paper Trading, Commodities (other than Agri), TA works as good on them as on Stocks!
Click to expand...
umeash ji,
Yes am aware of what you said. Am asking for TA which charts should I follow, the mcx charts or any other charts. As price of gold in India derived from International gold market, will the ta on our charts really work ?

Lets say I follow a simple MA cross over for buy/sell. Now on my MCX gold chart it has given a buy signal. Where as there is no such MA cross over in international gold chart. Should I buy ? Can I follow the signals generated on our chart when actually prices in our chart are moved by international markets.

surya.
 
S

surya.nifty

New Member
#6
#6
ashu1234 said:
Hi,
Well what I see is TA is an art and not an exact science, so giving a percentage to evaluate it will not be correct.
In intraday trading parlance, I would say if one want to trade mostly on technicals(and zero fundamentals) then the more liquid an instrument is more the chances of trading patterns, averages and any other things which you may want to include in TA.
.
Click to expand...
Well you are 100 perct right TA is a art and certain percent cant be give.
The essence of my question is to compare TA for stocks n comm's. And the 70% is just taken as a value so that you can draw a comparison.

About liquidity..you are right. but my query is not on TA for liquid/illiquid counters. its on how TA works on our charts when prices is international.

thanks.
 
S

shubh03

Member
#10
#10
If u asking my view on mcx commodities

then my advise to you PLS KEEP AWAY

I trade in agri commodities from 2004 and still in market :thumb:
but i see many who trade in mcx and finished

so it is my free advise to u

leni ho to lo free hai nahi to kuchh nahi :)
 
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