Commodity Intraday Trading

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Evening Trading Framework for Commodities in MCX India:

Now-a-days lot of people in India have seriously got interested in Commodity intraday trading .

Unlike equities commodities have various parameters because the basic trading unit, lot sizes and ticker value are all different for different commodities.

Beginners in commodity intraday trading often get confused in this web of information. With overload of information they take too long to move towards the actual trading strategies.

With this quick write up I have tried to provide all the important and necessary information on commodity intraday trading. And how it can be taken as a daily activity for easy and quick profit generation in the evening time.

What exact information or data- point a commodity intraday trader needs to know and what needs to be ignored will be clarified after going through this article.

I have been getting lot of queries from people regarding making better use of their evening time. Already Covind-19 induced lifestyle changes have made it a new normal for all of us to stay at home for better part of the day.

College students are attending online classes in morning and afternoon. They are sending me queries regarding trading in evening as Commodities market is open till 11.30 p.m.

Sure. We should be utilizing and optimizing our free evening time for adding alternative source of income without having us to go out.

Let’s quickly see how we can utilize our daily evening free time for adding handsome amount of money to our bank accounts with quick intraday trades in Commodities like Gold, Silver, Crude oil, Natural Gas, Copper, Nickel, Aluminium, Lead, Zinc etc.

Some quick information on Commodity intraday trading that the beginners should note:

Commodity trading in MCX is open from 9.00 a.m to 11.30 p.m everyday (except Saturday and Sunday).

We can trade in Commodities like Gold, Silver, Crude oil, Natural Gas, Copper, Nickel, Aluminium, Lead, Zinc.

No need to go through fundamentals on how these Commodities work for quick intraday trades.

We only need to understand technical and analytics behind price actions at the time of our trades.

Important thing to know is how Profit and Loss are calculated for various Commodities. The commodities of our interests are Gold, Silver, Crude oil, natural Gas, Copper, Nickel, Aluminium, Lead, Zinc etc.

(We are focusing on MCX commodities exchange only because it is most popular and widely used exchange in India. And there is no issue of liquidity and volume for daily trades).

Few important terms that a trader must know for Commodity intraday Trading:

Contract /Lot size or Trading Unit: Commodities are traded in contracts which are usually called lot sizes. Each contract has specific value (in weight) and it varies for different commodities. A trader takes position in particular contract with specified lot size. Multiple quantity means number of contract or lot sizes.

E.g the Lot size for Silver is 30 Kgs per contract. When we buy/sell 1 quantity/lot of Silver that means we bought/sold 1 Kgs Silver or we can say we have taken exposure to 30 Kgs of Silver with 1 lot. If we take 3 lots that means we have taken position in 90 Kgs of Silver with that trade.

Similarly the lot size of Gold is 1 Kg per contract. When we buy/sell 1 quantity/lot of Gold that means we bought/sold 1 Kg of Gold or we can say we have taken exposure to 1 Kg of Gold with 1 lot. If we take 3 lots that means we have taken position in 3 Kgs of Gold with that trade.

Base Value/Quote: Base value or Quote means the unit in which the price of that particular commodity is quoted on our trading screen/terminal. Whatever price we see on the trading screen is price as per the standardized base value of it.

E.g When we see Silver price as Rs.60000 on trading screen then it’s for base value of 1 kg. In other words we can say currently Silver is quoting or trading at Rs.60000 per 1 Kg.

Similarly when we see Gold price as Rs.40000 on trading screen then it’s for base value of 10 gms. In other words we can say currently Gold is quoting or trading at Rs.40000 per 10 gms.

Again, if we see Crude Oil as Rs.3500 on trading screen then it’s for base value of 1 Barrel. In other words we can say currently Crude oil is quoting or trading at Rs.3500 per 1 barrel.

Note:  I am mentioning all these units like Kg, Barrel and then there is mmBTu for natural gas just for explanation and clarification of terms and concepts. For trading purposes we are not at all concerned about what units are used for what or what a Barrel or mmBTU stands for.  (BTW mmBTU stands for Million Metric British Thermal Units and this information is useless for our trading purpose).

We only need to know how much Rs. 1 movement in each commodity will give us in actual Profit or Loss in our trade book.

Tick Size:  It is the smallest unit by which the price on exchanges and our trading screen changes or moves. The tick size or value for different commodities is different. It’s important to be well-informed about tick size of each commodity. This helps us in placing correct Stoploss and Target prices.

E.g: Tick size of Silver is 1. If we want to place buy order for Silver then order should be in multiple of  1. Let’s say price of Silver is 60000 then we will place order with buy prices as 60001, 60003, 60004 etc.

Tick size of Natural Gas is 0.1, so the order prices, target and stoploss will be in the multiple of 0.1. If Natural gas is trading at 170.50, then order can be placed as 170.60, 170.70 etc.

Profit/Loss per rupee movement: This is most important parameter for anyone interested in commodity intraday trading. It doesn’t matter whether we know how Copper is measured or natural gas is weighted. But it is very important to know how much a Rs.1 movement in price of any commodity on exchanges will affect our profit or loss account.

E.g For Crude Oil the tick size is 1 and Contract lot size is 100, so a Rs.1 movement of price on exchange will make gain/loss of Rs.100 in your trading account. Let’s say we bought Crude Oil contract at Rs. 3500 now the Price moved up by Rs.5 to 3505, then the Profit in your trading account will be Rs.500.

Likewise, for natural Gas the tick size is 0.1 and contract lot size is 1250, so a Rs. 1 movement of price will make gain/loss of Rs.1250 in our account i.e Rs.0.10 (10 Paisa ) movement gives Profit/loss of Rs.125. If Price moves up by Rs.0.50 (50 Paisa) then Profit will be 0.50 x 1250= Rs.625.

I am giving exact clear data points for every Commodity which you need to be well-informed of as you start Commodity intraday trading. Whichever commodity you are interested in you can straight way- check it, note it or print it. If you are trading in multiple commodities like I do then you need to have this pasted on your wall, filed up on your desk.

Over the period you get accustomed to all these data points.

Parameters for intraday trading in Crude Oil:

Crude Oil intraday trading strategy Tradvantage

Crude Oil Trading time in India:  The MCX exchange trading time for Crude Oil is 9.00 a.m to 11.30 p.m (Monday-Friday, timing may differ on national holidays which are notified by Exchanges as well as our Brokers)

Crude Oil Contract lot size in MCX:  100

Whenever we place any order for Crude Oil the exposure in our position will be in multiples of 100.

Expiry Date: You will get it from Brokers App. Use only Current month/latest month Expiry month contracts for intraday trades.

Crude Oil tick size/ value:  1

Crude Oil Profit-loss calculation for per point/rupee movement in underlying contract: We make Profit/loss of Rs.100 for every Rs.1 movement in price of Crude Oil on MCX.

Whatever your intraday trading strategy for Crude Oil be, you need to have understanding of 3 terms (Lot Size, Tick Size and Profit/Loss per Rupee Movement). It will help you to make quick decisions on Stoploss, targets and exit strategies.

Any other Information: Every Wednesday, U.S inventory data comes for Crude oil (in the evening time according to Indian Standard time). Apart from this no other fundamental news or research is needed for day trading in Crude oil.

Parameters for intraday trading in Silver:

Silver Commodity intraday trading strategy Tradvantage

Silver Trading time in India:  The MCX exchange trading time for Silver is 9.00 a.m to 11.30 p.m (Monday-Friday, timing may differ on national holidays which are notified by Exchanges as well as our Brokers)

Silver Contract size in MCX is 30.  For Silver Mini it is 5

Whenever we place any order for Silver the exposure in our position will be in multiples of 30. While for Silver Mini, it will be in multiples of 5.

Silver tick size/ value: 1

Silver Profit-loss calculation for per point/rupee movement in underlying contract: We make Profit/loss of Rs.30 for every Rs.1 movement in price of Silver on MCX. And for Silver Mini Profit/Loss will be Rs. 5 for every Rs.1 movement.

Whatever your intraday trading strategy for Silver be, you need to have understanding of 3 terms (Lot Size, Tick Size and Profit/Loss per Rupee Movement). It will help you to make quick decisions on Stoploss, targets and exit strategies.

Any other Information : No fundamental news or data needs to be tracked for day trading in Silver.

Parameters for intraday trading in Natural Gas:

Natural Gas Commodity intraday trading strategy Tradvantage

Natural Gas Trading time in India:  The MCX exchange trading time for Natural Gas is 9.00 a.m to 11.30 p.m

Natural Gas Contract lot size in MCX: 1250

Whenever we place any order for Natural Gas the exposure in our position will be in multiples of 1250.

Natural Gas tick size/ value:  0.1

Natural Gas Profit-loss calculation for per point/rupee movement in underlying contract: We make Profit/loss of Rs.1250 for every Rs.1 movement in price of natural Gas on MCX.

Whatever your intraday trading strategy for Natural Gas be, you need to have understanding of 3 terms (Lot Size, Tick Size and Profit/Loss per Rupee Movement). It will help you to make quick decisions on Stoploss, targets and exit strategies.

Any other Information : No fundamental news or data needs to be tracked for day trading in Natural Gas.

Parameters for intraday trading in Gold:

Gold Commodity intraday trading strategy Tradvantage

Gold Trading time in India:  The MCX exchange trading time for Gold is 9.00 a.m to 11.30 p.m (Monday-Friday, timing may differ on national holidays which are notified by Exchanges as well as our Brokers)

Gold Contract lot size in MCX is 1kg. For Gold mini it is 100 gms.

Whenever we place any order for Gold the exposure in our position will be in multiples of 1kg. For Gold mini it will in multiples of 100 gms.

Gold  tick size/ value: 1

Gold  Profit-loss calculation for per point/rupee movement in underlying contract: We make Profit/loss of Rs.100 for every Rs.1 movement in price of Gold on MCX. And Rs. 10 profit/loss for every Rs.1 movement in GoldMini Contract.

Whatever your intraday trading strategy for Gold be, you need to have understanding of 3 terms (Lot Size, Tick Size and Profit/Loss per Rupee Movement). It will help you to make quick decisions on Stoploss, targets and exit strategies.

Any other Information: No fundamental news or data needs to be tracked for day trading in Gold.

Parameters for intraday trading in Nickel:

Nickel Commodity intraday trading strategy Tradvantage

Nickel Trading time in India:  The MCX exchange trading time for Nickel is 9.00 a.m to 11.30 p.m. (Monday-Friday, timing may differ on national holidays which are notified by Exchanges as well as our Brokers)

Nickel Contract lot size in MCX: 250

Whenever we place any order for Nickel the exposure in our position will be in multiples of 250.

Nickel tick size/ value:  0.1

Nickel Profit-loss calculation for per point/rupee movement in underlying contract: We make Profit/loss of Rs.250 for every Rs.1 movement in price of Nickel on MCX.

Whatever your intraday trading strategy for Nickel be, you need to have understanding of 3 terms (Lot Size, Tick Size and Profit/Loss per Rupee Movement). It will help you to make quick decisions on Stoploss, targets and exit strategies.

Any other Information : No fundamental news or data needs to be tracked for day trading in Nickel.

Parameters for intraday trading in Copper:

Copper Commodity intraday trading strategy Tradvantage

Copper Trading time in India:  The MCX exchange trading time for Copper is 9.00 a.m to 11.30 p.m. (Monday-Friday, timing may differ on national holidays which are notified by Exchanges as well as our Brokers)

Copper Contract lot size in MCX: 1000

Whenever we place any order for Copper the exposure in our position will be in multiples of 1000.

Copper  tick size/ value:  0.1

Copper Profit-loss calculation for per point/rupee movement in underlying contract: We make Profit/loss of Rs.1000 for every Rs.1 movement in price of Copper on MCX.

Whatever your intraday trading strategy for Copper be, you need to have understanding of 3 terms (Lot Size, Tick Size and Profit/Loss per Rupee Movement). It will help you to make quick decisions on Stoploss, targets and exit strategies.

Any other Information : No fundamental news or data needs to be tracked for day trading in Copper.

Parameters for intraday trading in Zinc:

Zinc Commodity intraday trading strategy Tradvantage

Zinc Trading time in India:  The MCX exchange trading time for Zinc is 9.00 a.m to 11.30 p.m (Monday-Friday, timing may differ on national holidays which are notified by Exchanges as well as our Brokers)

Zinc  Contract lot size in MCX: 5000

Whenever we place any order for Zinc the exposure in our position will be in multiples of 5000.

Zinc  tick size/ value: 0.05

Zinc Profit-loss calculation for per point/rupee movement in underlying contract: We make Profit/loss of Rs.5000 for every Rs.1 movement in price of Crude Oil on MCX.

Whatever your intraday trading strategy for Crude Oil be, you need to have understanding of 3 terms (Lot Size, Tick Size and Profit/Loss per Rupee Movement). It will help you to make quick decisions on Stoploss, targets and exit strategies.

Any other Information: No fundamental news or data needs to be tracked for day trading in Zinc.

Parameters for intraday trading in Aluminium:

Aluminium Commodity intraday trading strategy Tradvantage

Aluminium Trading time in India:  The MCX exchange trading time for Aluminium  is 9.00 a.m to 11.30 p.m (Monday-Friday, timing may differ on national holidays which are notified by Exchanges as well as our Brokers)

Aluminium Contract lot size in MCX: 5000

Whenever we place any order for Aluminium the exposure in our position will be in multiples of 5000.

Aluminium tick size/ value:  0.05

Aluminium Profit-loss calculation for per point/rupee movement in underlying contract: We make Profit/loss of Rs.5000 for every Rs.1 movement in price of Crude Oil on MCX.

Whatever your intraday trading strategy for Aluminium be, you need to have understanding of 3 terms (Lot Size, Tick Size and Profit/Loss per Rupee Movement). It will help you to make quick decisions on Stoploss, targets and exit strategies.

Any other Information: No fundamental news or data needs to be tracked for day trading in Aluminium.

Parameters for intraday trading in Lead:

Lead Commodity intraday trading strategy Tradvantage

Lead Trading time in India:  The MCX exchange trading time for Lead is 9.00 a.m to 11.30 p.m (Monday-Friday, timing may differ on national holidays which are notified by Exchanges as well as our Brokers)

Lead Contract lot size in MCX:  5000

Whenever we place any order for Lead the exposure in our position will be in multiples of 5000.

Lead tick size/ value:  0.05

Lead Profit-loss calculation for per point/rupee movement in underlying contract: We make Profit/loss of Rs.5000 for every Rs.1 movement in price of Lead on MCX.

Whatever your intraday trading strategy for Lead be, you need to have understanding of 3 terms (Lot Size, Tick Size and Profit/Loss per Rupee Movement). It will help you to make quick decisions on Stoploss, targets and exit strategies.

Any other Information: No fundamental news or data needs to be tracked for day trading in Lead.

Following table gives complete data on important parameters that retail traders can use for commodity intraday trading:

Per rupee movement profit-loss commodities Tradvantage

Note: We are not required to do any fundamental research or data analysis for booking daily quick profits in any these commodities.  When you know what needs to be focused on and what needs to be ignored then one is able to do effective trading decisions.

Day trading only requires Skills to understand price action movements to quickly pick the accurate trade set ups with high precision.

With high accuracy price action techniques one is able to trade with low capital, make optimum use of leverage provided by brokers for day trading. And importantly we get better risk-reward ratios i.e we can initiate trades with smaller stop-losses  i.e risking small amount and book good profits on it.

A beginner in commodity intraday trading should practice strategies with small quantity. Here’s sample of how a beginner should be using mobile App for practicing quick profit trades in commodities:

Commodity intraday trading strategy Tradvantage

The best time to book quick daily profits with commodity trading is: Evening time between 5 p.m to 10 p.m .

This period is free for most of us in India. The commodities trading in evening can help you to create an alternative source of income sitting comfortably at home and with just a smartphone besides you.

Well , you don’t even need to keep tracking any of these commodities. We have Automated Alert Mechanism for Price Action Strategy; you only need to check your phone only when an Alert notification comes on your phone. 

Similar to Morning Trading Framework for Equities, one is able to create an Evening Trading Framework for Commodities for Daily Income.

If you have queries on how you can start commodity intraday trading with proper framework or if you face any issues while designing a trading system for any of the commodities, you can always connect with us on :

Tradvantage website or Email : care (at) tradvantage (dot) in. Or WhatsApp me on 7030290174.

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