How to begin commodity trading with best commodity broker in India
Commodity trading can be an attractive investment option for those looking to diversify their portfolio In India, there are a variety of commodities that can be traded, including agricultural products such as wheat and rice, precious metals such as gold and silver, and energy products such as crude oil and natural gas. However, before getting started, it is important to find the best commodity broker in India to help guide you through the process Here's a guide on how to begin commodity trading with the best commodity broker in India.
Step 1: Understand the Basics of Commodity Trading
Before starting commodity trading, it is important to understand the basics of commodity trading. Commodities are raw materials that are traded in the market, with prices determined by supply and demand The prices of commodities are highly volatile and can fluctuate based on a variety of factors, such as weather conditions, geopolitical events, and economic indicators It is important to understand these factors to make informed decisions about trading
Step
2: Choose a Commodity Broker
Choosing the best commodity broker in India is the most important step in beginning commodity trading A good commodity broker should be able to offer a variety of trading platforms, research and analysis tools, and customer support. Additionally, it is important to choose a broker that is registered with the relevant regulatory bodies in India, such as the Securities and Exchange Board of India (SEBI).
Step 3: Open a Trading Account
Once you have chosen the best commodity broker in India like Globe Capital, you will need to open a trading account. This can usually be done online or in-person, depending on the broker The process typically involves submitting some basic personal information and documentation, such as a government-issued ID and proof of address
Step 4: Fund Your Trading Account
After your trading account has been opened, you will need to fund it with capital to start trading This can be done through a variety of payment methods, such as bank transfer, credit card, or e-wallet Make sure to choose a payment method that is convenient for you and has low transaction fees.
Step 5: Learn to Analyze Market Trends
To be successful in commodity trading with the best commodity broker in India, it is important to learn how to analyze market trends. This involves understanding technical analysis, which is the study of past market data to identify patterns and make predictions about future price movements. It is also important to stay up-to-date on news and events that may impact commodity prices
Step 6: Start Trading
Once you have funded your trading account and have a good understanding of market trends, it is time to start trading Make sure to start with a small investment and gradually increase your investment as you gain more experience and confidence It is also important to set realistic goals and stick to a trading plan.
Step 7: Monitor Your Trades
After you have started trading, it is important to monitor your trades closely This involves keeping track of your open positions, monitoring market trends, and making adjustments to your trading plan as needed Additionally, it is important to use stop-loss orders to limit your losses in case the market moves against you.
Trading in commodities has a long history in India. Indian traders have a long history of being significant players in the world's commodities trade Yet, the early 2000s are when India's contemporary commodities trade began to expand For the Indian commodities markets and the best commodity brokers in India, the development of dematerialized trade and online trading platforms was a game-changer because it made commodities trading accessible to even tiny investors
The Futures Markets Commission (FMC) oversaw commodity trading in India until 2015. The Futures Markets Commission (FMC) and the Securities and Exchange Board of India (SEBI)
inked a merger agreement in September 2015 (SEBI) After the merger, the SEBI has been in charge of overseeing commodity trade in India.
Commodity Trading Exchanges in India
Similar to a stock exchange, a commodity trading exchange serves as a marketplace where buyers and sellers of commodities can transact In India, there are numerous commodity trading exchanges The principal commodity trading exchanges are as follows:
● Multi Commodity Exchange (MCX) is a Mumbai-based organisation that was founded in November 2003.
● The Gurgaon-based Indian Commodities Exchange (ICEX) was founded in November 2009
● National Commodities and Derivatives Exchange (NCDEX) is a privately held exchange with headquarters in Mumbai that was founded in December 2003.
● National Multi Commodity Exchange (NMCE) is a company with its headquarters in Ahmedabad and was founded in 2002
Among these the two main exchanges are MCX and NCDEX for the best commodity brokers in India like Globe Capital Further information on these two is provided below
Commodities Traded in MCX
The largest commodity exchange in India, MCX, was founded in 2003 and had an average daily turnover of Rs 32,000 crores in 2019–20 Bullion, such as gold, silver, and platinum; energy products, such as gasoline, crude oil, natural gas, petrochemicals, etc.; agricultural products, such as pulses, castor seeds, black pepper, cotton, cardamom, etc ; and metals, such as copper, nickel, zinc, etc are some of the main commodities traded on MCX
Commodities Traded in NCDEX
In India, NCDEX is a well-known commodity exchange with a focus on agricultural products With a spectacular increase throughout the years, its average daily turnover in 2021 was Rs. 2139 crores There are 23 commodities that can be traded on NCDEX, which is the most in the entire global commodities trading market The NCDEX's primary trading commodities are:
● Kapas, 29mm cotton are the fibres.
● Coriander, jeera, and turmeric are spices
● Bajra, Barley, Chana, Maize, Moong, Paddy (Basmati), and Wheat are cereals and pulses
● Guar gum refined splits, gur gur seed, and soft gur gur complex (10 MT)
● Castor oil, cottonseed oil cake, crude palm oil, mustard seed, refined soy oil, sesame seeds, and soybean are some examples of oils and oilseeds
● Index items: AGRIDEX
Similar to SENSEX, NCDEX offers an index called NCDEX AGRIDEX The NCDEX
AGRIDEX is an index related to the top 10 liquid commodities like Chana, Soybean, etc on its platform, much like the sensex is a benchmark index tied to 30 chosen companies. The monsoon has a crucial role in agricultural productivity and the overall health of the Indian
economy, hence the NCDEX monsoon index and the NCDEX rain index are also included These track the monsoon in India every year between 1 June and 30 September.
Conclusion
Commodity trading can be a profitable investment option for those looking to diversify their portfolio. However, it is important to choose the best commodity broker in India to help guide you through the process By following these steps, you can begin commodity trading with confidence and increase your chances of success in the market