Play safe: Choose the right commodity market
(Nidhi Nath Sriniwas)
NOW that you have figured out your trading kitty, it's time to decide the market in which you would like to trade. That can be exciting. If someone casually mentions he trades in gold, steel ingots or crude oil and behaves as if he doesn't enjoy watching your eyes widen, he is pretending. The oomph factor is just too much.
But though it is natural to get attracted to commodities you can name drop later, I'd advise caution. A wrong step at this stage may well mean a quick end to your career as a trader. When it comes to finding your favourite commodity markets, choose one that you understand or with which you have some kind of link. That is Rule Number Two.
For some lucky ones the choice is quite easy. Like those irritatingly single-minded kids who knew in class two they would become world-famous heart surgeons or chess wizards, they know exactly which commodities work best for them. Many more consult the family astrologer. Shani has a lot to answer for, as any metal or oil trader would tell you.
But what should you do if "gut feels" and janam patri don't really work for you? Here is the nitty-gritty of making the right choice. First, naturally, is money. Ask your broker to give you a list of the margin money requirements for each of the more than 60 commodities being traded on the online exchanges. Since you know the size of your kitty, you can immediately cross out those which don't fit your budget.
NOW that you have figured out your trading kitty, it's time to decide the market in which you would like to trade. That can be exciting. If someone casually mentions he trades in gold, steel ingots or crude oil and behaves as if he doesn't enjoy watching your eyes widen, he is pretending. The oomph factor is just too much.
But though it is natural to get attracted to commodities you can name drop later, I'd advise caution. A wrong step at this stage may well mean a quick end to your career as a trader. When it comes to finding your favourite commodity markets, choose one that you understand or with which you have some kind of link. That is Rule Number Two.
For some lucky ones the choice is quite easy. Like those irritatingly single-minded kids who knew in class two they would become world-famous heart surgeons or chess wizards, they know exactly which commodities work best for them. Many more consult the family astrologer. Shani has a lot to answer for, as any metal or oil trader would tell you.
But what should you do if "gut feels" and janam patri don't really work for you? Here is the nitty-gritty of making the right choice. First, naturally, is money. Ask your broker to give you a list of the margin money requirements for each of the more than 60 commodities being traded on the online exchanges. Since you know the size of your kitty, you can immediately cross out those which don't fit your budget.
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