Quite happy with this week with still a lot of bad news in the market. This week -0.44%. I still can learn a lot this week.
If you are a trader and trades in commodity then you must have a risk management plan. Risk management plan reduces the risk involved in trading. To be a successful stock market trader, you must follow a risk management plan. A risk management plan helps preserve trading capital while earning consistent returns. It also helps curb your emotions while enforcing self-discipline. The main elements of risk management include determining the risk amount and position size, identifying the stop price, and examining the risk/reward ratio. Determine the Risk Amount.
If you are an intraday trader and trades in MCX or NCDEX than you should follow these tectics-
1. Buy near open price
If possible try to buy shares below open price, or at open price. Don’t buy shares if price is gone very high then open price, wait for the price to come down near open price and then buy that stock.
2. Check buying volumes
Before buying check out the buying and selling quantity (volumes). If buying volume started increasing then the stock may go up.
3. Check derivative status
If possible try to check out the derivative of the stock which you want to buy. If derivative of that particular stock is going up with increasing buying volumes then you can immediately grab (buy) that share/stock. Most of the time it is seen that if the derivative goes up, then its stock or share also goes up.
4. Wait for the target price to buy For example
if buy is given at 150.5 then don’t buy below this price, only buy at 150.5 price or slightly higher then price. Because the given buy price may be the resistance price, if it breaks then share price goes up or else may not go up above 150.5. So plan to buy at given targeted price, don’t buy below target price.
5.Strictly maintain Stop Loss Strictly maintain the given stop losses.
This will help you to prevent from huge loss. Suppose, for moment the share/stock what you bought falls drastically down, then you may end up with huge loss. So always maintain given stop loss. “Stop Loss will reduce your loss”.
6. Down wait for huge profit in single share/stock
If you are getting some profit and if you notice that is not further moving up (it’s called consolidation) then you have to sell your share/stock and come out of that trade. In this manner, you can earn small profit instead of loss then you can do another trade and again earn small profit. Likewise if you keep earning couple of small profits in a single day then all your small profits will add up to huge profit amount in a single day. “Get satisfied in small profit and do multiple trades”.
There are two main commodity exchange in India, These are-
MCX(Multi Commodity Exchange of India Ltd.): MCX presents futures trading defined in terms of type of contracts offered in 58 commodities, from various market segments including energy, bullion, iron and non-iron metals, oil seeds, and other agricultural commodities. It is the worlds first and fore most also one and only company acquired ISO 27001:2005 certification.
National Commodity & Derivatives Exchange Limited (NCDEX): It is a private limited company which has obtained Certificate for Commencement of Business in Mat 2003 and is online commodity exchange based in India.
Visit my blog for Free Commodity Tips
Source: http://www.articlesbase.com/finance-articles/safe-trading-in-commodity-market-5749266.html
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Reuters – Stock index futures were little changed on Monday, with the S&P 500 facing a level where selling has clustered in recent sessions.
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