All You Need To Know About Trading in Commodities?

By siliconindia  |  Tuesday, 21 July 2020, 11:58:05 AM IST

All You Need To Know About Trading in Commodities?

Trading has become a seamless way of investment and huge rewards. Today, you can witness trading of different items, be it property, currency, or commodity. In this article, we will be learning more about commodity trading.

What is Commodity Trading?

Commodity trading has been a part of our economy for ages. Villagers and farmers often exchange commodities that can be treated as commodity trading. With the evolving financial realm, the face of commodity trading has also been changed.

It happens when commodities and their derivatives are sold or bought. Agricultural products are one of the popular items used for trading. There are plenty of non-agro commodities as well that are continuously gaining traction in this trading world, such as steel, energy, metals, etc.

How To Trade in Commodities?

Trading in commodities is as simple as it can get. With the advent of technology, you can simply trade from the comforts of your home. Trading apps like Angel Broking facilitates easy and efficient trading, even for beginners. Watch this video: (Link) to know more about trading in commodities with Angel Broking App.

All you need to think about is future price appreciation for making your bid. When the future price hits the right target, selling the commodity is the smartest way to gain more in the trading.

Which Are The Popular Commodities That You Can Trade?

According to the National Commodity and Derivatives Exchange Limited (NCDEX), you can trade agricultural commodities like paddy, barley, cotton, guar seed, castor seed, soybean, refined oil, crude palm oil, turmeric, coriander, etc.

The Multi Commodity Exchange of India Limited (MCX) permits to trade in bullion products such as gold, silver, base metals (aluminum, brass, copper, lead, zinc, etc.), energy (crude oil, natural gas, petroleum, etc.,

Tips To Get Maximum Gains

Trading in commodity can get you high returns if you know the right way to go about it. Here are a few tips that you must keep up your sleeves.

  • Don’t Enter With A Mindset of Stock Market Trading: It is essential to understand that stock market trading is an entirely different trading commodity. Both have different rules and plans to make higher gains
  • Diversify in Different Commodities: Never focus on a single commodity. Always learn to diversify your capital on different commodities
  • Ascertain The Logistics: As a trader, you must understand the best time to trade. Keep yourself updated with the market happenings and make the bid accordingly
  • Use Analysis Method: Many technical indicators will help you in trading. So, you need to use your analytical skills to understand the price forms and estimations.
  • Focus on the Volatility: You need to learn the right way to cash the volatility. The volatile market can indeed be detrimental to your trading. Learn about each commodity and track its performance to survive volatility.
  • Stay Alert: You need to be highly vigilant while trading in a commodity. You must know when the market is bullish and bearish to adjust your position accordingly.

Trading in the commodity is a great way to make a fruitful investment. If you know how to trade, you can bag generous monetary rewards.

ON THE DECK

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