How to choose commodities while trading in Indian commodity market ?

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Commodity market is a well diversified market and large institutions, individuals or corporates invests here. Two major exchange of this market are mcx and ncdex. Most actively traded commodities on mcx are gold, silver and crude oil and on ncdex are mentha oil, crude palm oil and cotton.Commodities are raw material used for manufacturing and production of different goods. Financial advisory services like mcx tips helps in earning good returns here.Having some commodities as part of portfolio is useful in diversifying the risk.

 

Following are some guidelines which market participants can follow to select right commodity for themselves :

 

1)Technical and fundamental factors

 

A trader must have knowledge about market to successfully trade in commodities. Even if you hire a researcher then also you should have some basic knowledge.To select best commodity from trading point of view research properly technical and fundamental factors. This will help in understanding whether to trade in it or not.

 

2)Comfort level

 

Never select commodity in which you are not comfortable trading with. If you have never heard about it or do not have sufficient knowledge about it then avoid to trade in it. Try and select those commodities you are familiar with.

 

 

3) Identify the right category

 

Commodity market is broadly divided in to three categories base metals, precious metals and agricultural commodities. First select the category which best meets your requirements. After selecting a broader head you should again sub divide the products in that category and perform good research work on it. Be very careful while making the final choice as wrong choice may lead to financial losses.

 

4) Risk and volatility

 

While choosing a category be careful as some categories have high volatility. On the other hand some commodities are not that volatile.Estimate your risk bearing capability. Trading in commodities which are highly volatile involves high risk.

 

 

 

 

 

Along with these factors traders should also understand type of trader they are. Some people can handle the pressure of scalping and day trading, some do not have sufficient time to devote in market. Understand the type of trader you are to trade in a more efficient manner. Although there are some common traits which every type of trader share like capital exposure and risk management. Market experts recommendations on currency tips , trading tips, best mcx tips and more are also helpful in better management of risk and returns. To become a successful commodity trader always be attentive in commodity market and plan a trading strategy which is in accordance with the market needs. Have a good understanding of strategy which you use and learn under what outcomes it will give.Following wrong trading practices is not going to help you in earning good profit on long term basis.

 

 

 

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