Finding Profit in the Commodity Market: A Beginner's Guide with Rs 50,000
As a full-time trader following my retirement, I have found the commodity market to be an exciting and potentially profitable venture. If you have Rs 50,000 to invest, the commodity market could be a great option for you. Commodity traders often have up to 10 times leverage for intraday trading, making it a lucrative field, especially when compared to stocks trading where margins are significantly higher.
Compared to stock futures, commodity futures are generally cheaper as the margins are lower, and the brokerage costs range from 0.05 to 0.12. This makes commodity futures a haven for speculators. To get started, you can go to major commodities trading exchanges like the National Commodity and Derivatives Exchange (NCDEX) and Multi Commodity Exchange (MCX), where you can find a variety of commodities with their contract sizes and other criteria.
Commodity Trading Risks and Recommendations
The commodities futures markets are known for their high risk. Most traders who invest in commodities on their own often lose money, making it even more than what they invested. This is because most traders tend to employ an aggressive strategy in pursuit of larger profits. However, my suggestion for you would be to adopt a medium-risk approach when the market seems safe, allowing you to potentially earn an average of Rs 1,000 per day.
Alternatively, if you desire a risk-free investment with the potential for high returns, you might consider the stock market. For effective and profitable advice, you can consult advisory firms such as 100mcxtips and KheloMCX, both of which provide tips based on technical and fundamental analysis of the market.
Trading Strategies and Market Selection
Commodity trading strategies are plans for buying and selling commodity futures and options. Here are a few major strategies:
Trading Breakouts
A breakout trading strategy involves purchasing a commodity when it reaches new highs or selling when it falls to new lows. This method is based on the idea that trends in commodity prices will continue, allowing traders to capitalize on the trend.
Range Trading Strategy
Range trading in commodities involves attempting to buy a commodity near the bottom end of a price range and sell it when it reaches the top of that range. The key to success is identifying the oversold condition and timing the market accurately.
It's important to note that it is challenging for individual traders, especially beginners, to excel in multiple markets simultaneously. Focusing on a single market is much more manageable and increases the chances of success. Based on my experience, I would recommend KheloMCX for accurate commodity tips, with both fundamental and technical analysis insights.