How to Make Money in Commodity Trading

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Now we are going to start about making money via commodity trading. Before we start this topic we need an idea about share market as well as commodity market, then we can easily understand the strategy about making money in these segment.

What is Share Market?

A big question mark in many minds! It should be also. Every educated individual must have an idea on share market. Share Market is a public sell where stocks, mutual funds, bonds etc. are sold. Stock market, Mutual fund market etc. all comes under Share Market. Primarily Share Market refers to stock market. Buy buying a stock of a particular company you got ownership of that company to the extent of your investment.

Now the question comes in mind that how to start trading in it? 

So for starting any investing you need money. Then a bank account, a demat account and little knowledge.

What is Commodity Market :

Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts.

Making Money in Commodity:

It is not easy to make money in commodity as we think. The main reason behind this, there is no right time of when to enter or exit market. There are many ways to invest in commodities, including the futures market, buying the actual commodities (gold and silver are examples of easy-to-store commodities), Commodity ETFs (exchange traded funds), and stocks whose business model involve commodities.

If you want to make money in commodity then you need to follow some simple steps define below as:-

  • Develop a well-balanced commodities portfolio
  • Test your trading strategy by executing paper trades
  • Learn trading strategies from successful futures traders
  • Consider hiring a professional commodities trading advisory firm

Before you start commodities you should have to notice these points. In commodity you have a risk so you need to develop your commodities portfolio. For example, you want to have a certain portion allocated in precious metals, another in energy, and maybe another in agriculture. In this case, you are hedging your bets. That way, if one sector isn’t performing well, others might make up the loss.

You also need to spend your much of time on executing charts so you will get a better deep knowledge in this trading and you can also understand about ups and down of this segment.

This trading is very subjective so you must learn the strategy and planning from traders that how they trade very well.  Then, you might want to incorporate some of their trading ideas into your system.

According to me this is best to hire an advisory firm for this. But before hiring an advisory firm you must sure that you have hire a right firm who will provide you accurate Commodity Tips.  Any advisory firm makes lots of research in providing Commodity Tips to you. Once you hire an advisory firm it will be there responsibilities to make money by your investment. They spent their whole time in research so they can provide you commodity calls so you can trade and earn profit by using that calls. Any firm notifies you about when to buy or sell a product so you can earn profit in Commodity Market.

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Riya Bajaj has 1 articles online

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How to Make Money in Commodity Trading

This article was published on 2013/08/06