Alice Blue is the leading zero brokerage stock broker in India. Alice Blue was founded with the intention to serve people trading in the Indian Stock,forex,equity and commodity markets.
Srinivasanagar Layout Velachery
P.O. Box: 224/5
Chennai
Tamil Nadu
600042
India
(+91) 95662 96691 muthurajprabhu@aliceblueindia.com Facebook Google Plus LinkedIn
Home    Knowledge Base    Commodities Trading  

Commodity trading for beginners

Investing in commodities is advised as a good move when diversifying your portfolio. The advantages of investing in the commodity market include helping in ideal asset allocation, hedging against inflation, and involvement in global demand growth. There is a substantial risk associated when investing in this segment, which is offset by the significant returns that can be accrued.

  • Types of Commodities The commodities traded on the various exchanges are broadly divided into three categories—metals, agricultural products, and energy. Gold, copper, and silver are some examples of metal commodities. Sugar, grains, and spices come under agricultural products while crude oil and natural gas are categorized as energy.
  • Starting off You will have to open an account with a brokerage firm or broker before you can start placing your trades. Photo identification, PAN card, and other such documents will have to be produced for the process to be completed.
  • Factors influencing commodity markets Demand and supply are the two factors that drive the commodity market. Inventory assumes importance in deciding prices when the commodities in question are perishable products or high demand products like crude oil. The government policies, political climate in the country and the world, and social changes all have an impact on commodity prices.
  • Track performance It is essential to stay updated on the fluctuations and live commodity prices when placing trades. Making an informed decision can reduce the risk factors associated with the commodity market. Though you will come across numerous commodity tips, it is important to distinguish between the good and the bad ones. Not every tip will be from a reliable source, so be sure to conduct your own research and follow the findings.

Subscribing to a commodity advisory issued by your broker or some other expert might be a good move that can help you sift through the riff-raff. Irrespective of whether you have taken up online commodity trading, or are doing it the old-fashioned way, it is important to remember that information about demand and supply in the commodity market is not as accurate and controlled as in the equity market.
Investing in commodities is advised as a good move when diversifying your portfolio. The advantages of investing in the commodity market include helping in ideal asset allocation, hedging against inflation, and involvement in global demand growth. There is a substantial risk associated when investing in this segment, which is offset by the significant returns that can be accrued.

  • Types of CommoditiesThe commodities traded on the various exchanges are broadly divided into three categories—metals, agricultural products, and energy. Gold, copper, and silver are some examples of metal commodities. Sugar, grains, and spices come under agricultural products while crude oil and natural gas are categorized as energy.
  • Starting offYou will have to open an account with a brokerage firm or broker before you can start placing your trades. Photo identification, PAN card, and other such documents will have to be produced for the process to be completed.
  • Factors influencing commodity marketsDemand and supply are the two factors that drive the commodity market. Inventory assumes importance in deciding prices when the commodities in question are perishable products or high demand products like crude oil. The government policies, political climate in the country and the world, and social changes all have an impact on commodity prices.
  • Track performanceIt is essential to stay updated on the fluctuations and live commodity prices when placing trades. Making an informed decision can reduce the risk factors associated with the commodity market. Though you will come across numerous commodity tips, it is important to distinguish between the good and the bad ones. Not every tip will be from a reliable source, so be sure to conduct your own research and follow the findings.

Subscribing to a commodity advisory issued by your broker or some other expert might be a good move that can help you sift through the riff-raff. Irrespective of whether you have taken up online commodity trading, or are doing it the old-fashioned way, it is important to remember that information about demand and supply in the commodity market is not as accurate and controlled as in the equity market.