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10 basic rules of commodity trading March 22 2021Commodity trading, Commodity market, Stock market

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A commodity is a range of assets and resources such as food, energy and metals which are used in daily life. A lot of traders take keen interest in commodity trading as commodities are consumed on daily basis. But before trading in commodity, one should have adequate knowledge and should know some rules of trading.

Some rules for effective trading are as follows:

1.     Entering the Commodity Markets with Stock Market trading ideas is not a smart idea. Despite the fact that they are both speculative trade markets, they have significant differences and usually have opposing trading trends and thumb rules.

2.     You can''t use yesterday''s ideas for today''s market and expect to be in business tomorrow. Be willing to accept and execute change on a continuous basis, since “change” is the only constant in the world; everything else evolves, and this is particularly true in today''s extremely unpredictable and ever-changing market scenarios.

3.     When your trade positions are going in the direction as expected, be patient to extract full profits and ensure profits by improvising the stop-loss level on a regular basis. Don''t be cynical here, or you''ll end up booking profits too early and later regretting it. This might lead to traders re-entering the same trade at higher levels and panicking out at minor reversals, eroding previous small gains and rising losses. It''s not about whether you''re right or wrong; it''s about how much money you make when you''re right and how much money you lose when you''re wrong, and that''s what separates the winners from the losers.

4.     When trades hit the suggested stop-loss thresholds, don''t get too excited and make sure you exit. You can miss out on better and multiple opportunities as a result of being trapped in bad deals that result in increasing losses each day.

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5.     In these markets, do not cultivate a propensity to be a Bull or a Bear. The markets have only one hand, which is neither bullish nor bearish, but rather the right side at the right time. Since the trend is king, you should always follow it.

6.     Follow only one analyst''s or technical advisor''s recommendation at a time, as several recommendations would only add to a lot of confusion. When the previous guidance proves to be less productive or loss-making, you can choose or keep an eye out for an alternative guidance, but not at the same time.

7.     Do not borrow or deal with other people’s money, or borrow more money to hang on to loss-making transactions. Just trade with money you have in hand that you can afford to lose, and be emotionally prepared to lose it all in the worst-case scenario.

8.     Do not attempt to be a trend setter or the first one to know where a certain trade would go. No one can possibly be the best seller or buyer except by sheer coincidence – so why to try? You could end up losing a lot of money and become a laughingstock to others. Instead "Quietly" follow the trend and make respectable profits.

9.     Never trade in a panic or enter or leave positions in a hurry. Volatility is an inseparable aspect of this market and will be present the majority of the time.

10. Lastly, don’t tell anyone about your open positions. This will lead you nowhere and will only confuse you more, as everyone will air their own opinions on the subject whether they have knowledge or not, making your trade decisions look foolish and hasty.

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Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.

"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
REGISTRATION NOS:

INDIRA SECURITIES PVT.LTD. (SEBI REG.NO.):NSE TMID: 12866, BSE TMID: 663, CDSL DPID: 17000 SEBI REG. NO.: INZ000188930, MCX TM ID: 56470, NCDEX TM ID: 01277, CDSL REG. NO.: IN-DP-90-2015, CIN : U67120MH1996PTC160201
INDIRA COMMODITIES PVT. LTD. CIN : U65921MH1995PTC089399

DISCLAIMER:

"INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS, READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE INVESTING."

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Manoj Bhandari. Email: complaint@indiratrade.com. Call : 0731-4797275