What is commodity market how we can earn money from it

Commodity market is a virtual market place where we can buy, sell or trade raw material. Commodities are two types: Hard and Soft commodities. Hard commodities are typically natural resources that must be mined or extracted like as gold, rubber, oil, etc., whereas soft commodities are agricultural products or livestock like as corn, wheat, coffee, sugar, soybeans, pork, etc

Organized commodity derivatives in India started as early as 1875, barely about a decade after they started in Chicago. However, many feared that derivatives fuelled unnecessary speculation and were detrimental to the healthy functioning of the markets for the underlying commodities. As a result, after independence, commodity options trading and cash settlement of commodity futures were banned in 1952.

Commodities Markets

While the world of the Internet has eliminated some of the magic of the commodities markets, the actually floor trading is still fascinating. Most commodities markets are divided into pits where the brokers stand facing the center. Each is dedicated to commodities trading that are specific for that pit. For example, the Chicago Board of Trade has large pits for soybeans, T-bonds and corn futures in addition to many others. The COMEX in New York is home to more that one futures exchange. There you will likely find pits for such commodities as heating oil, gold, cotton, coffee and orange juice.

Why commodity

Well, let's suppose you want to buy gold because you believe that the price of gold will rise. You could then buy gold store them, wait for them to go up in price, and then sell them at a profit. But, you have to be sure that the gold you buy is pure, you have to find a place to store it, you have to provide the security, transport it to vault and other such hassles. A far better way to invest in gold would be to buy gold futures from the commodities exchange.

Tips For better profit

• When you are thinking of to investing in the market then you need to go for a professional broker or consultant and also get some commodity tips based on market knowledge and take advice.
• It is the first step for trading. You should have full information about the market where you are trading. You should have knowledge about MCX and NCDEX which are two major part of commodity market and also information about the products which are comes in it.
• Do not trade during the first half-hour of the session. Most experienced traders simply watch the markets for the first half of the day because they try to understand the market condition and then start investment.
• When you are thinking of to investing in the market then you need to go for a professional broker or consultant and also get some commodity tips based on BSE and NSE. take advice.
• In commodity trading you can also follow "Trend Following" strategy that most of the professional traders use and recommend. The strategy says that the prices that are in a trend have a higher probability of continuing in that direction. Therefore, the odds should be in your favor by taking trades in the direction of the trend.
• Do not trade with hesitance, half heartedly or in over confidence. You may incur small but repeated losses if you are scared of the markets or heavier ones if you are overtly brave and foolhardy.
• Realize that you are in a bad situation and exit fast when you need to pray for relief at each rise or fall in a trade which is leading you further in a deep pit towards heavier losses.
• Do not borrow or trade with funds that are not yours or pump in more funds by borrowing to hold on to loss making trades. Trade only with own funds that are spare-able.
• Taking commodity tips is the better way to escape from getting big loss. Never invest any more money than you can afford to lose.