Make Quick & Easy Money from Commodity Trading in MCX and NCDEX

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Lot of people keep asking “how much money can one really earn with commodity trading in MCX or NCDEX exchange”.

Also lot of people are interested in knowing “how much capital/money is required to trade in commodities like Gold, Silver, Crude Oil, Copper, Zinc, Natural Gas etc”

Today I am going to bust some of the myths related to commodity trading.

The common myths or misconceptions around commody trading are:

  1. It’s tough to make money with commodity trading.
  2. Not everyone can trade in commodities.
  3. It requires fundamental knowledge about the commodity that one intends to trade in.
  4. Lot of capital/money is required for trading in commodities.

Let me tell you FACTS about commodity trading.

  1. It’s NOT tough in fact it is very easy to trade in commodities with right techniques.
  2. Anyone & Everyone can trade in commodities & make money.
  3. NO fundamental knowledge about the commodities is required as far as intraday trading is concerned.
  4. It doesn’t require Big capital to start trading in commodities.

I will highlight different commodities along with how much money actually is required to trade in it & also how much profit can one make with it in intraday/positional trades!

We are only focusing on Top 9 commodities that we can trade everyday on MCX Exchange. (Remember MCX exchange is opened till 11.30 p.m everyday).

  • On MCX & NCEDX the trading in commodities is done in Futures contract.
  • The Future Contract prices are nothing but the prices that traders believe underlying commodity will see in near future.
  • The lot sizes(unit sizes) for each commodity is different.
  • When we buy/sell 1 contract of Futures of any commodity it means we have booked certain quantity of commodity for ourselves and we intend to make money on it by squaring off (clearing the position) before the expiry of that contract.
  • Every Futures Contract has an expiry date.
  • Different commodities have different monthly expiry dates e.g Gold JAN Fut, Silver FEB Fut. As a trader whenever we trade in Commodities we should only focus on Current month Expiry date.
  • We do not pay entire contract value for the quantity(lots) for the commodity trading, we only pay certain margin money per contract/lot as fixed by the broker (one with whom you have Demat Account).

Which segments do we use while doing commodity trading?

Presently trading in commodities is done only in Futures segment. Soon Options trading is going to be introduced in it.

  1. BUY Position: When we expect (as per our analysis) that Price of commodity like Gold, Silver, Crude Oil, Copper etc is going to rise in near future, we Buy Futures contract of that commodity.
  2. SELL Position: When we expect (as per our analysis) that price of certain commodity is going to fall/drop in near future, we Sell Futures contract of that commodity.

[ We have certain techniques to determine whether the prices will rise or fall with exact entry point, stoploss point and Target prices. You can learn these simple techniques to generate trades in various Commodities from here ]

Remember: When we Buy Or Sell any Futures Contract our intention is only to make profits from Price Movement. We don’t intend to take physical delivery of any commodity. So when a commodity price moves in our expected direction we square off (clear the position) and book profits. 

Let’s begin by understanding how one can make money by trading in different commodities. I have discussed different lot sizes of these commodities, the amount of capital required to trade in it & the profit/loss made for every 1 Rupee movement in the prices of these commodities.

  1. Making Money with Trading in Gold: Below is typical list of Futures contract available for trading in Gold on MCX Exchange along with Expiry dates. (Taken from Moneycontrol.com)

One can trade in Gold Futures with following lot sizes:

Gold (Mega): Indicated as “GOLD

  • Trading unit/lot sizes = 1 kg
  • Profit/loss for every Rs. 1 movement of GOLD Futures Price = Rs. 100
  • Capital or margin money required for trading it on Intraday/Positional basis:

For Intraday (MIS) i.e if you square off your positions same day = Rs. 55000-66000/lot (approximate)

For short-term positional trade (1-4 days holding) = Rs.120000/lot (approximate)

Example: Let’s say current price of GOLD Futures is Rs. 28000 per 10 gram. Now 1 lot of GOLD Futures consists of 1 kg of Gold. If we buy 1 kg of physical Gold the amount we need to pay is Rs. 28,000,00. But We can buy 1 lot (1 kg) of GOLD Futures by paying margin amount of Rs. 120000 ( for positional trade) or Rs. 60000 (for intraday trade). For every Rs.1 change in GOLD Futures Price we earn Rs. 100/lot. If GOLD Futures price rise by Rs.5 we would make Rs. 500/lot. For Rs.20 rise in GOLD futures price our gain would be Rs.2000. Everyday GOLD Futures price move in the range of Rs.80-300.  Thus there is lot of opportunities to make money on price movements in both upward & downward direction for Gold commodity trading.

Gold Mini: Indicated as “GOLDM

  • Trading unit/lot sizes = 100 Grams
  • Profit/loss for every Rs. 1 movement in GOLDM Futures price = Rs. 10
  • Capital or margin required for trading it on Intraday/Positional basis :

For Intraday (MIS) i.e if you square off your positions same day = Rs. 6500-7500/lot (approximate)

For short-term positional trade(1-4 days holding) = Rs. 11000-13000/lot (approximate)

Example: Let’s say current price of GOLDM Futures is Rs.28000 per 10 gram. Now 1 lot of GOLDM Futures consists of 100 grams of Gold. If we buy 100 grams of physical Gold the amount we need to pay is Rs. 2,80,000. But We can buy 1 lot(100 gm) of GOLDM Futures by paying margin amount of Rs. 11000 ( for positional trade) or Rs. 6500 (for intraday trade). For every Rs.1 change in GOLDM Futures Price we earn Rs. 10/lot. If GOLDM Futures price rise by Rs.20 we would make Rs. 200/lot. For Rs.40 rise in GOLDM futures price our gain would be Rs.400. Everyday GOLDM Futures price move in the range of Rs.80-300.  Thus there is lot of opportunities to make money on price movements in both upward & downward direction.

There is also Gold Guinea with lots size of 8 grams and Gold Petal with lot size of 1 grams.

** I suggest to do trading only in GOLD & GOLDM Lots because of liquidity & volume.**

  1. Making Money with Trading in Silver: Below is typical list of Futures contract available for trading in Silver on MCX Exchange along with Expiry dates. (Taken from Moneycontrol.com)

One can trade in Silver with following lot sizes:

Silver (Mega): Indicated as “SILVER

  • Trading unit/lot sizes = 30 kg
  • Profit/loss for every Rs. 1 movement of SILVER Futures Price = Rs. 30
  • Capital or margin required for trading it on Intraday/Positional basis :

For Intraday (MIS) i.e if you square off your positions same day = Rs. 35000-40000/lot (approximate)

For short-term positional trade(1-4 days holding) = Rs. 75000/lot (approximate)

Example: Let’s say current price of SILVER Futures is Rs.42000 per 1 Kg. Now 1 lot of SILVER Futures consists of 30 kg of Silver. If we buy 30 kg of physical silver the amount we need to pay is Rs. 12,60,000. But We can buy 1 lot( 30 kg) of SILVER Futures by paying margin amount of Rs. 75000 ( for positional trade) or Rs. 35000 (for intraday trade). For every Rs.1 change in SILVER Futures Price we earn Rs. 30/lot. If SILVER Futures price rise by Rs.10 we would make Rs. 300/lot. For Rs.50 rise in SILVER futures price our gain would be Rs.1500. Everyday SILVER Futures price move in the range of Rs.150-800.  Thus there is lot of opportunities to make money on price movements in both upward & downward direction for Silver commodity trading.

Silver Mini: Indicated as “SILVERM

  • Trading unit/lot sizes =  5 Kg
  • Profit/loss for every Rs. 1 movement in SILVERM Futures price = Rs. 5
  • Capital or margin required for trading it on Intraday/Positional basis:

For Intraday (MIS) i.e if you square off your positions same day = Rs.6000/lot (approximate)

For short-term positional trade(1-4 days holding) = Rs. 12000/lot (approximate)

Thus you can trade in SILVERM Futures with capital of just Rs. 6000-7000.

3. Making Money with trading in Crude Oil: Below is typical list of Futures contract available for trading in Crude Oil on MCX Exchange along with Expiry dates. (Taken from Moneycontrol.com)

One can trade in Crude Oil Futures with following lot sizes:

Crude Oil (Mega): Indicated as “CRUDEOIL

  • Trading unit/lot sizes = 100 BBL
  • Profit/loss for every Rs. 1 movement of CRUDEOIL Futures Price = Rs. 100
  • Capital or margin required for trading it on Intraday/Positional basis :

For Intraday (MIS) i.e if you square off your positions same day = Rs. 14000/lot (approximate)

For short-term positional trade(1-4 days holding) = Rs. 28000/lot (approximate)

Example: Let’s say current Price of CRUDEOIL Futures is Rs. 3600. For every Rs.1 movement in its price we make Rs.100. If CRUDEOIL Price moves by Rs. 5 we make Rs.500/lot. If CRUDEOIL Price moves by Rs.15 we make Rs.1500/lot. Everyday one can trade in CRUDEOIL FUTURES and make good money on price movements in both upward & downward direction.

Crude Oil Mini: Indicated as “CRUDEOILM

  • Trading unit/lot sizes =   10 BBL
  • Profit/loss for every Rs. 1 movement in CRUDEOILM Futures price = Rs. 10
  • Capital or margin required for trading it on Intraday/Positional basis :

For Intraday (MIS) i.e if you square off your positions same day = Rs.1700/lot (approximate)

For short-term positional trade(1-4 days holding) = Rs. 3000/lot (approximate)

Thus with the capital of just Rs. 1700-2000 one can start trading in CRUDEOILM Futures.

4. Making Money with Trading in Copper: Below is typical list of Futures contract available for trading in Copper on MCX Exchange along with Expiry dates. (Taken from Moneycontrol.com)

One can trade in Copper Futures with following lot sizes:

Copper (Mega): Indicated as “COPPER

  • Trading unit/lot sizes = 1 MT
  • Profit/loss for every Rs. 1 movement of COPPER Futures Price = Rs. 1000
  • Capital or margin money required for trading it on Intraday/Positional basis:

For Intraday (MIS) i.e if you square off your positions same day = Rs. 13000/lot (approximate)

For short-term positional trade(1-4 days holding) = Rs. 27000/lot (approximate)

Example: Let’s say current Price of COPPER Futures is Rs. 400. For every Rs.1 movement in price we make Rs.1000. If COPPER Price moves by Rs. 0.50 we make Rs.500/lot. If COPPER Price moves by Rs.2 we make Rs.2000/lot. Everyday one can trade in COPPER Futures and make good money on price movements in both upward & downward direction.

Copper Mini: Indicated as “COPPERM

  • Trading unit/lot sizes =   250 Kgs
  • Profit/loss for every Rs. 1 movement in COPPERM Futures price = Rs. 250
  • Capital or margin required for trading it on Intraday/Positional basis :

For Intraday (MIS) i.e if you square off your positions same day = Rs.3500/lot (approximate)

For short-term positional trade (1-4 days holding) = Rs. 6500/lot (approximate)

Thus with the capital of just Rs. 3500-4000 one can start trading in COPPERM Futures.

5. Making Money with Trading in Natural Gas: Below is typical list of Futures contract available for trading in Natural Gas on MCX Exchange along with Expiry dates. (Taken from Moneycontrol.com)

One can trade in Natural Gas Futures with following lot sizes:

Natural Gas: Indicated as “NATURALGAS

  • Trading unit/lot sizes = 1250 MMBTU
  • Profit/loss for every Rs. 1 movement of NATURALGAS Futures Price = Rs. 1250
  • Capital or margin required for trading it on Intraday/Positional basis:

For Intraday (MIS) i.e if you square off your positions same day = Rs. 21000/lot (approximate)

For short-term positional trade(1-4 days holding) = Rs. 42000/lot (approximate)

Example: Let’s say current Price of  NATURALGAS Futures is Rs. 230. For every Rs.1 movement in price we make Rs. 1250. If NATURALGAS Price moves by Rs. 0.50 we make Rs.625/lot. If NATURALGAS Price moves by Rs.2 we make Rs.2500/lot. Everyday one can trade in NATURALGAS and make good money on price movements in both upward & downward directions.

6. Making Money with Trading in Zinc: Below is typical list of Futures contract available for trading in Zinc on MCX Exchange along with Expiry dates. (Taken from Moneycontrol.com)

One can trade in Zinc Futures with following lot sizes:

Zinc (Mega): Indicated as “ZINC

  • Trading unit/lot sizes = 5 MT
  • Profit/loss for every Rs. 1 movement of ZINC Futures Price = Rs. 5000
  • Capital or margin required for trading it on Intraday/Positional basis :

For Intraday (MIS) i.e if you square off your positions same day = Rs. 45000/lot (approximate)

For short-term positional trade (1-4 days holding) = Rs. 95000/lot (approximate)

Example: Let’s say current Price of  ZINC Futures is Rs. 192. For every Rs.1 movement in price we make Rs. 5000. If ZINC Price moves by Rs. 0.10 we make Rs.500/lot. If ZINC Price moves by Rs.1 we make Rs.5000/lot. Everyday one can trade in ZINC Futures and make good money on price movements in both directions.

Zinc Mini: Indicated as “ZINCMINI

  • Trading unit/lot sizes =   1 MT
  • Profit/loss for every Rs. 1 movement in ZINCMINI Futures price = Rs. 1000
  • Capital or margin required for trading it on Intraday/Positional basis :

For Intraday (MIS) i.e if you square off your positions same day = Rs.10000/lot (approximate)

For short-term positional trade(1-4 days holding) = Rs. 19000/lot (approximate)

Thus with the capital of just Rs. 10000 one can start trading in ZINCMINI Futures.

Example: Let’s say current Price of  ZINCMINI Futures is Rs. 192. For every Rs.1 movement in price we make Rs. 1000. If ZINCMINI Price moves by Rs. 0.50 we make Rs.500/lot. If ZINCMINI Price moves by Rs.1 we make Rs.1000/lot. Everyday one can trade in ZINCMINI Futures and make good money on price movements in both directions.

7. Making Money with trading in Aluminium: Below is typical list of Futures contract available for trading in Aluminium on MCX Exchange along with Expiry dates. (Taken from Moneycontrol.com)

One can trade in Aluminium Futures with following lot sizes:

Aluminium (Mega): Indicated as “ALUMINIUM

  • Trading unit/lot sizes = 5 MT
  • Profit/loss for every Rs. 1 movement of ALUMINIUM Futures Price = Rs. 5000
  • Capital or margin required for trading it on Intraday/Positional basis:

For Intraday (MIS) i.e if you square off your positions same day = Rs. 18000/lot (approximate)

For short-term positional trade (1-4 days holding) = Rs. 37000/lot (approximate)

Example: Let’s say current Price of  ALUMINIUM Futures is Rs. 128. For every Rs.1 movement in ALUMINIUM price we make Rs. 5000. If ALUMINIUM Price moves by Rs. 0.10 we make Rs.500/lot. If ALUMINIUM Price moves by Rs.0.50 we make Rs.2500/lot. Everyday one can trade in ALUMINIUM Futures and make good money on price movements in both upward & downward directions.

Aluminium Mini: Indicated as “ALUMINI

  • Trading unit/lot sizes =   1 MT
  • Profit/loss for every Rs. 1 movement in ALUMINI Futures price = Rs. 1000
  • Capital or margin required for trading it On Intraday/Positional basis:

For Intraday (MIS) i.e if you square off your positions same day = Rs.3600/lot (approximate)

For short-term positional trade (1-4 days holding) = Rs. 7500/lot (approximate)

Thus with the capital of just Rs. 3600 one can start trading in ALUMINI Futures.

Example: Let’s say current Price of  ALUMINI Futures is Rs. 128. For every Rs.1 movement in price we make Rs. 1000. If ALUMINI Price moves by Rs. 0.50 we make Rs.500/lot. If ALUMINI Price moves by Rs.1 we make Rs.1000/lot. Everyday one can trade in ALUMINI Futures and make good money on price movements in both directions.

8. Making Money with trading in Nickel: Below is typical list of Futures contract available for trading in Nickel on MCX Exchange along with Expiry dates. (Taken from Moneycontrol.com)

One can trade in Nickel Futures with following lot sizes

Nickel (Mega): Indicated as “NICKEL

  • Trading unit/lot sizes = 250 Kgs
  • Profit/loss for every Rs. 1 movement of NICKEL Futures Price = Rs. 250
  • Capital or margin required for trading it on Intraday/Positional basis :

For Intraday (MIS) i.e if you square off your positions same day = Rs. 8000/lot (approximate)

For short-term positional trade(1-4 days holding) = Rs. 17000/lot (approximate)

Example: Let’s say current Price of  NICKEL Futures is Rs. 660. For every Rs.1 movement in price we make Rs. 250. If NICKEL Price moves by Rs. 2 we make Rs.500/lot. If NICKEL Price moves by Rs.5 we make Rs.1000/lot. Everyday one can trade in NICKEL FUTURES and make good money on price movements in both upward & downward directions.

Nickel Mini: Indicated as “NICKELM

  • Trading unit/lot sizes =   100 Kgs
  • Profit/loss for every Rs. 1 movement in NICKELM Futures price = Rs. 100
  • Capital or margin money required for trading it on Intraday/Positional basis :

For Intraday (MIS) i.e if you square off your positions same day = Rs.3000/lot (approximate)

For short-term positional trade (1-4 days holding) = Rs. 6500/lot (approximate)

Thus with the capital of just Rs. 3000 one can start trading in NICKELM Futures.

Example: Let’s say current Price of  NICKELM Futures is Rs. 660. For every Rs.1 movement in price we make Rs. 100. If NICKELM Price moves by Rs. 5 we make Rs.500/lot. If NICKELM Price moves by Rs.10 we make Rs.1000/lot. Everyday one can trade in NICKELM and make good money on price movements in both directions.

9. Making Money with Trading in Lead: Below is typical list of Futures contract available for trading in Lead on MCX Exchange along with Expiry dates. (Taken from Moneycontrol.com)

One can trade in Lead Futures with following lot sizes

Lead (Mega): Indicated as “LEAD

  • Trading unit/lot sizes = 5 MT
  • Profit/loss for every Rs. 1 movement of LEAD Futures Price = Rs. 5000
  • Capital or margin required for trading it on Intraday/Positional basis:

For Intraday (MIS) i.e if you square off your positions same day = Rs. 45000/lot (approximate)

For short-term positional trade (1-4 days holding) = Rs. 95000/lot (approximate)

Example: Let’s say current Price of  LEAD Futures is Rs. 165. For every Rs.1 movement in price we make Rs. 5000. If LEAD Price moves by Rs. 0.10 we make Rs.500/lot. If LEAD Price moves by Rs. 0.50 we make Rs. 2500/lot. Everyday one can trade in LEAD FUTURES and make good money on price movements in both directions.

Lead Mini: Indicated as “LEADMINI

  • Trading unit/lot sizes =   1 MT
  • Profit/loss for every Rs. 1 movement in LEADMINI Futures price = Rs. 1000
  • Capital or margin required for trading it on Intraday/Positional basis :

For Intraday (MIS) i.e if you square off your positions same day = Rs. 9000/lot (approximate)

For short-term positional trade(1-4 days holding) = Rs. 18000/lot (approximate)

Thus with the capital of just Rs. 10000 one can start trading in LEADMINI Futures.

Example: Let’s say current Price of  LEADMINI Futures is Rs. 165. For every Rs.1 movement in price we make Rs. 1000. If LEADMINI Price moves by Rs. 0.50 we make Rs.500/lot. If LEADMINI Price moves by Rs.1 we make Rs.1000/lot. Everyday one can trade in LEADMINI and make good money on price movements in both directions.

Commodity Trading Ready-Reckoner:

Well, we have discussed in all 9 commodities that one can trade everyday for quick profits. Best part of Commodity trading is that the MCX exchange is open till 11.30 p.m. So even salaried/working people can utilize their free time in the evening for commodity trading.

Only (BUT VERY IMPORTANT) part left now is – how to determine exact prices at which one should enter in trades, how to set stoploss and how to decide targets for commodity trades??

We have Particular Techniques to determine Entry points, Stoploss points & Targets for Commodity trades. You can quickly learn & use these simple techniques (No Technical Analysis) to easily generate profits every day by giving 30 minutes- 2 hrs in the evening. 

Visit here to learn these techniques right now from comfort of your home.

 

How was this Tutorial on commodity trading? Did you find it informative? Any Comments/suggestions? Please share them in the comment section below.

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