Commodity trading goes way apart from equity trading thanks to the different objectives and strategies involved in both. A lot of factors influence commodity trading in a particular location. Of course, the procedure becomes a lot more complex when import-export is involved because then a trader has to deal with currency variations. The type of commodity that is being traded also plays a pivotal role in deciding the success of the trade. Most of these factors, however, directly influence the prices of the traded commodities. This might be so in the form of inflation or downsizing of prices. Now, while inflation is mostly seen as a boon for traders involved in the exchange, downsizing of prices tends to cost these very dealers a lot and often, a fortune.
Herein comes the necessity of formulating commodity trading tips that would, in turn, be beneficial for the traders involved. Below is a list of six essential commodity trading strategies and why these could come in handy for conducting a good, productive trade.
Trading according to news trends
This is the one where a trader commences commodity trading based on the news and current market expectations. A trader going for this strategy needs to be alert of the ongoing trends and news. Thereafter, he will have to supply the products in demand before the next update comes in for news travels fast, especially through digital media. News trading makes it increasingly convenient for a trader to formulate proper entry and exit strategies. This also becomes pivotal in naming them among the commodity top gainers. Further, it also provides ample trading opportunities if the trader is willing to treat every news trend as an individual entity.
End-of-Day technique
Traders opting for this strategy tend to wait till the trade is nearing closure. As a trade nears its completion, it becomes easier for strategists to note and tally the price variations. Such traders can conveniently encash on these analytics and put in a price quote that will have high chances of being accepted. This one of the beneficial commodity trading tips is profitable but surely not without its set of risks. To avoid these, a trader should be ready with a stop-loss order, a take-profit order and a limit order. Oftentimes, the top gainers of previous trades tend to study the commodity research report of trades conducted in this technique to estimate a closing price for the next trade. This technique is also suitable for most traders as it demands comparatively less time commitment.
Swing Trade technique
Swing trading involves trading with both inflation and downsizing of prices in the market. This technique again brings to the importance the study of the commodity research report of previously conducted trades. A trader opting for this method begins with either buying a security asset if the prices are expected to rise or keeping an asset for selling in case they fall. Such traders are generally inclined towards profiting from both market possibilities but this is largely a technical approach to trading. One, that is completely based on analysis. Sharp analytic and observation skills are, however, bound to have the trader among the commodity top gainers.
Day-Trading technique
Day trading mostly involves traders being involved in their business day in and day out. It is suitable for those willing to trade as a full-time profession. This technique is currently the most sought-after for purchasing commodity trading and currency futures in India. Such traders make total use of the price fluctuations during the open and closed hours of the commodity market in question. Further, day traders are likely to stick to a proper trading plan that enables them to rapidly adapt to real-time market fluctuations. They are also on the gaining side thanks to around-the-day forex market hours.
Position Trading
Position trading is again a suitable method for most traders for dealing with commodity trading and currency futures in India. The technique involves a trader who has been reportedly holding a position in the trade for months and even years. Such a trader mostly relies on detailed analysis for fluctuating and possible price trends while taking into concern other matters like historical trends and market patterns. LKP Securities is one of the best options for reliable commodity reports and trend analysis for eminent position traders.
Trend Trading
This technique essentially involves a writer for studying various trends and initiating trade towards those that will essentially result in profit. Trend trading also requires a trader to always stay alert and in the loop about the ever-changing trends. This is applicable for markets concerning the trade of commodities as well as for currencies. However, it is pivotal for such traders to be wary of the market reversals and risks involved by keeping a trailing stop-loss order at hand for timely mitigation.
Now that you are aware of the six commodity marketing strategies, you are all set to begin with trading. Remember, it is important to have a trading-Demat account for the same before you can start. If you need further help with opening a trading-Demat account or with commodity trading, you can contact LKP Securities. They offer quality service for trading along with assistance in opening an account.
