f you are looking for an option to invest your savings other than the equity cash market then, trading in the commodity sector is best choice for you. There are many people who use to put their money in this place and earn enormous amount of profit. Also, most of the persons dealing in more than one market to fasten the pace of generating money. So, it is a good idea to involve in this field taking one as the primary business and another as a safe corner to cover up the losses.
Basic Structure of The Commodity Market
It contains two types of materials which you can sell or buy in an online imaginary trade center, that are – arduous (heavy) and soft (light). Arduous includes those natural substances that are extracted after mining like precious metals (Gold, Silver), metals (Copper, Zinc, Lead etc.) oil, natural gases and so on, whereas light commodities are agricultural products like Wheat, Chana, Dal, and other important spices consume in India. These materials are not physically sell or buy but the rise and fall in the prices affected by local Mandis as well as US and UK markets.
Major Exchanges for Commodity Trading
It is one of the largest investment sector in India. The trading is nearly similar to the cash future segment of the Equity section. Major Exchanges of India are –
MCX, Mumbai (Multi Commodity Exchange of India) – Mainly provide deals in mined objects like energies and metals (common and precious).
NCDEX, Mumbai (National Commodity and Derivatives Exchange in India) – Trade based on basic Indian Agri products are done in this exchange.
NMCE, Ahmadabad (National Multi-Commodity Exchange of India) – Third largest exchange working with some of the key promoters.
Interested traders have to open a separate account other than the cash account (other than that of equity market) for doing business in the above mentioned exchanges. But if you are having only one account then dealing in commodities only is possible with that.
Commodity Trading Tips by Financial Experts
When you are planning to enter in the sector for creating income it is very important to know about the basics as well as deep knowledge of a particular segment you want to choose. Learning fundamental principals is a bit easy but knowing how to make profit from it is a hard nut to crack. It is learned through spending short period of time in this field.
Another considerable point is that, if you want to increase the earning you have to make greater risks. The more is the danger, the more is the profit you will earn and also the span of lose is too high to make you unfortunate. To overcome these two points, it is advisable to took the services of experienced analysts of the commodity market. An commodity advisory company having such talent with them additionally, they use all the new technology, equipments and software through which prediction of the movement of the market becomes easy and more accurate.