Commodity Trading :)

As you know we already have discussed about commodity trading but missed some of the points. So here we are discussing those points 🙂

What is a Trend in Commodity Trading?


When prices are steadily moving higher or lower over a period of time it is considered as a trend. If prices are rising over time it is consider an uptrend. If prices are declining over a period of time then it is considered a downtrend.


Reason behind following the trend is that prices are more likely to continue in that same direction than reverse. We can put the odds in our favor by trading this way.


Tips on how to follow the Trend


We can’t predict how high or low a market is going to move. Therefore, if we are following trends, we can catch some very profitable moves in the commodity markets.


Two common ways to enter the markets when we spot a trend:


  • Buy on a pullback. When the market is moving higher for ten days in a row, wait for a 2-3 day where prices decline and then buy.

  • Buy when the market makes new highs. It is the hardest thing for many traders to do.


Remember we should trade with the trend of the market to increase our chances of success. 🙂

What is Day Trading?


Day trading is the process of buying and selling a futures contract(s) within the same day. Day trades can last for a couple minutes or sometimes they are held for most of the trading session. Day trading is not recommended for new futures traders since it takes a lot of knowledge, experience and discipline to day trade futures successfully.


What are Futures Options?


Buy or sell a futures contract at a designated strike price is the right of an option not an obligation. We buy options to bet on the price of a futures contract to go higher or lower for trading purposes. There are two main types of options – calls and puts.


Calls –If we believe the underlying futures price will move higher we can buy a call option. For example, if we expect soybean futures to move higher, we will want to buy a corn call option..


Puts –If we believe the underlying futures price will move lower we can buy a put option. For example, if we expect corn futures to move lower, we will want to buy a soybean put option.


Benefits of Online Trading

Trading commodities online is almost a one-stop shop. Most online brokers will have real time quotes, charts, futures news, technical analysis programs and research available for their clients. This has opened the door for online traders to make more of their own trading decisions and implement trading strategies that once were not available to the average retail trader.


If you are going to day trade commodities and futures, you definitely want to trade online, unless you have someone else managing your account.

SMC Comtrade Limited, a key constituent of SMC Group of Companies, came into existence since the very start of Commodity Exchanges in India. With nationwide presence, it is enabling the retail & corporate investors to diversify their portfolio and enjoy the benefits of trading in MCX, NCDEX & NMCE. Its highly appreciated research team guides the investors in making wise investment decisions for agri-commodities as well as international commodities.

SMC Comex International DMCC (part of SMC Group) is one of the initial, leading & experienced, clearing and broking member of Dubai Gold and Commodities Exchange (DGCX). It offers trading in Gold, Silver, Crude (WTI & Brent), Forex (INR, Euro, Dollar & sterling) and Steel Rebar Contracts.


We provide various trading solutions to suit clients’ requirements. Our products are tailored to provide convenience to the clients & keep them satisfied. We offer Commodities Trading in offline mode as well as online mode; client can trade at the comfort of his home / office at any time using our platform.


Which are the most prominent commodity exchanges across the world?


  1. Chicago Board of Trade (CBOT )

  2. Chicago Mercantile Exchange (CME)

  3. New York Board of Trade (NYBOT)

  4. New York Mercantile Exchange (NYMEX)

  5. London Metal Exchange (LME)

  6. London International Financial Futures Options Exchange (LIFFE)

  7. The Tokyo Commodity Exchange (TOCOM)

  8. Kuala Lumpur Commodity Exchange (KLCE)

  9. Bursa Malaysia Derivatives Exchange.

Stay Tuned for more and more on this :)


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