New to Commodity Trading

Hello everyone. I have been trading mainly in equities. My run has been pretty poor of late in equities so I'm considering trading in Comm markets as well to find what suits me.
I'm aware that Comm markets are more volatile and the mtm positions fluctuate more wildly as even the leverage provided by brokers are generally more than what is provided for equities (please correct me if I'm wrong on that front)
So I would like members to give me pointers to keep in mind as I am a newbie into Comm markets
Should I have a different mindset while I'm trading in comm
How different is it from trading equities
Thanks in adance

If equities have the power to wipe out a person's capital in 1 month,

commodities will do that in 15 days.

mcx volume is shrinking day by day, soon it will be shut down .

Except crude, nothing left in mcx to trade.

crude lot size is higher for a new-bie. .

Try to trade in cash segment as low quantity as possible.

WOW, you must know a lot about what happens inside MCX.

Yeah im well aware of the fact that comm markets are more volatile. But never the less, i think the volatility also provides ample opportunity to take swing trades. The volatility is what traders survive upon, dont we?
I have read that the volumes are decreasing on MCX, but don't you think it is a harsh statement to make that MCX is going to shut down? I mean, the volume on MCX is even more than BSE, but BSE isn't shutting down, is it?
What do you think should be a decent fund allocation to trade in comm markets?

Hi,

Commodity Transaction Tax eat much of the profit. Try agricultural commodities where CCT is nil....

nice reply buddy....all points are absolutely correct...........:clapping:

What the heck.....everybody coming down heavily on MCx.....(Bohot loss ho gaya kya!!)he he.
Well I don't care about anybody's view coz Mcx(non agri) provide great potential of trading compared to any instrument available. Those saying capital loss very easily in Mcx compared to equity they need to learn some good lessons on Money management and position sizing. If you don't know these two you bound to loose money everywhere. About CTT already said in the forum that it affect only to High frequency traders. Trade in low volume contracts and it won't pinch much.

And Jitendra Mcx is not going to shut down, its a cat fight between the exchanges. NSe want to eat up MCX business, you are right volumes are higher in MCX as we are dealing in physical things rather than those notes whose valuations are hard to understand unlike commodities which got much transparencies in their valuation and storage. Agri commodities are always a gamble reason being accessing stock of it was a pain and manipulation is rampant due to low overall stock, which in turn resulted to the scam in Non-agri segment where there was no stock at all for the delivery. The event has indeed dented the reputation and working of MCX but it will come out as stake sell of FTIL in MCX is on the way. Non-agri segment is the real deal as almost all contracts are cash settled and only gold and silver are there to delivery that too optional if you square off before delivery time. Prices are fairly priced into INR terms which closely follow international price and the news event. I can go on in pages but will do that only if one needs.

This is the statement made by a staff from my commodity broker-

Most of our clents have lost and left- reasons

1. Huge ctt

2. illiquid contracts with higher lot size(typical example is natural gas- 1250)

3. You have to sit 3 sessions (asia, europe, us) to catch a trend.

Its absolute stupidity to enter a trend , if 50% of the trend is over.

Its hard to come to an conclusion that MCX exchange will be closed ..instead if that case, the goverment will override the exchage to safer hands ...probablely it may fuse to some other transperant exchange

regards

antony

Just like to add never believe in your broker, most of them are morons sitting there to feed on clients brokerage.
Some counter point(quoted by actual trader)
1. Huge ctt: Yes its huge if you are trading Gold but not much if you trade silver mini, lead/zinc/copper/alumini. You have to choose your instrument wisely while trading which only you can decide not some broker.
2. Illiquid contract: NaturalGas is not an illiquid contract except some morons are looking it at the wrong time. Naturalgas is American based commodity whose total demand and supply is related to America only, no other players on demand as well as supply side outside american region. So no matter it'll look illiquid during asian and european session. Plus its a seasonal thing, when its running its swings are wide and very liquid. so in short you have right perspective while selecting and trading.
3. Need to sit 3 sessions: Lol....these brokers are typical equity traders who take a position on market opening and close at the end of the day, poor him he might be taking position on 10:10 am and squaring it off at 11.10(which is the official cut off time.)
On contrary to equity, 3 sessions means commodities got 3 good swing points at the opening sessions, Many traders trade only after 6pm on the US opening and close out position by 9-10 max, trend or range is already there on charts.....who needs 3 session sitting. Its your choice if you got system you can trade all the day or take selective position on US open where most of the action takes place.

Its pathetic that there is so much of wrong info all over the forums and people loosing because of their own habits and blaming it on exchange. Hope it clears some basic myths about MCX trading.....and plz don't blame exchange they are same everywhere its you who needs a right mindset.