Wednesday, 23 April 2014
Posted On 12:45 am By: MCX BULLIONS Follow us on twitter
As we all are Commodity Trader, so this post is really very much important to know as well as need to understand the facts ...
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If you have not heard by now, most people who trade commodities lose money. Most of the estimates range in the 80 to 95 percent range of those who have lost or who are losing in the world of trading commodities. Those statistics are dismal for someone who wants to venture into trading commodities. Fortunately, many of the losers have common traits that contribute to their losing and they can serve to help others become successful.
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Here are four of the most common reasons why commodity traders lose money. If you can have the discipline to consistently overcome these common mistakes, you will put the odds much more in your favor.
Many new traders do not educate themselves on how to trade commodities properly. This goes beyond learning the ticker symbols, futures margins and contract sizes of a variety of commodities. You are competing against other traders who have had the best training in the business and have been trading professionally for many years. Believe me, they will not take it easy on you. You keep score with money in this business and everyone is trying to score as many points as possible – no charity here.
Must Read : Best Trading Strategies in Commodities
At the very least, I recommend reading several good books on trading, starting with Trading By The Book by Joe Ross and Come Into My Trading Room by Dr. Alexander Elder. Don’t just read the books – implement their trading philosophies. I would also suggest learning how to trade from a successful trader. There are many professional traders available for instructing or you can take classes specifically devoted to trading commodities.
Almost every small trader who ventures into commodities falls into this trap. There is huge leverage when trading commodity futures and a couple bad trades can wipeout the over leveraged trader. Fortunately, there is a simple rule you can follow to take care of this problem - do not risk your whole account on one trade. Also, do not trade a contract that is too large for your account size. For example, you shouldn’t trade three futures contracts that average a $2,000 move a day when you have a $10,000 account.
Do not risk more than 5 percent on any one trade. Most professional money managers risk less than 2 percent on any one trade. This is tougher if you start trading commodities with only a $10,000 account. In this case you should risk no more $500 on a trade. If you want to risk no more than $500 on a trade, all you have to do is place a stop loss order $500 away from you entry. It doesn’t guarantee you won’t lose more than $500, but it is as close as you can get.
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I cannot stress enough how important it is to have a trading plan in place before you begin trading commodity futures. A trading plan is your guide to how you will control your trading. It should be in writing and reviewed regularly. The trading plan should include the markets you will trade, your trading strategy, money management and even a plan to stop trading for a period of time if your account equity drops to a certain level. Trading without a plan will lead to erratic an undisciplined trading, which ultimately leads to painful losses.
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Wednesday, 9 April 2014
Posted On 9:43 pm By: MCX BULLIONS Follow us on twitter
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Monday, 31 March 2014
Posted On 10:09 am By: MCX BULLIONS Follow us on twitter
NEW DELHI: Commodity markets regulator FMC has decided to levy up to 5 per cent penalty - of the shortfall in the required margin money - on members of the national commodity bourses from April 1 for failing to collect the required amount from clients.
Exchanges have also been asked to put in place a suitable mechanism to enable members report collection of all margins from their clients at the end of each trading day and to report short collection and non-collection on fifth day.
Members, also called brokers, are required to collect the 'margin money' from clients, which is later deposited with the exchange. Margin money includes a percentage of the value of commodity that a client is keen to trade.
FMC has issued fresh guidelines as the regulator has noticed several instances of non-collection and short collection of margins by members from their clients during inspection of their books of accounts.
As per new guidelines, a penalty of 5 per cent of the shortfall in margin money would be imposed on members who are repeated defaulters.
One per cent would be levied on each day if members fail to collect the margin money for more than three consecutive days after trading plus two working days (T+2). The same penalty would be imposed from the day one if initial margin is not collected.
The new guidelines will come into force from April 1. FMC said members will have to collect upfront initial margins from their clients. They are given time till 'T+2' working days to collect margins (except initial margins) from their clients.
Members are required to report to the exchange on T+5 day, the actual short collection/non collection of all margins from clients, it said.
The penalties collected should be credited to the Investor Protection Fund. The exchanges are directed to submit the report on the penalties to the FMC by the 10th day of the following month.
FMC said that incorrect reporting on collection of margin would attract members a penalty of 100 per cent of amount short collected.
Sunday, 30 March 2014
Posted On 3:28 am By: MCX BULLIONS Follow us on twitter
A lot of commodity traders frequently enter into the trap of not being totally sure when to pick out gains on their commodity trades. Generally they take gains too speedily and other times they hold on for a big movement and their quick gain becomes into a loss. Knowing when to move out of a trade can often be quite difficult, but there are some simple steps to pick out that will help ease this trouble.
The 1st matter that all traders must see is that you will never get the top and bottom of every market on every trade. In point of fact, you wont still get close. There is no such matter as perfection in trading. The perfection that a trader requires to consider is applying the principles of a trading system to the letter and keeping discipline.
A trader must think of trading more as a game of figures and possibly not trying to enforce system of logic on the markets. The markets will do no matter what they are going to do and nonentity can nail 100 percent of the about time what they will do. Generally a technical or fundamental frame up in a market will suggest that the market will make a large movement. Generally it will and sometimes it wont. Basically because of this, a trader has to be uniform on when to pick out gains.
For instance, say that you most of the time buy a commodity at trendline financial support on the daily charts. You might risk $ 250 per contract on each trade and you strive for $ 500 gain. After that trading for a time period, you realise the markets will sometimes move far away from $ 500 gain objective and you leave lots of money negotiable. Other times, the market moves up $ 300 and reverses. You finally get stopped out at breakeven or you continue to hold and finally take a loss on the trade.
After that a while, it is simple for a trader to get mixed up and disappointed. After that a couple trades in a row where the market goes well past the $ 500 gain objective, the trader decides she will hold on for a $ 1000 gain on the next trade. The markets will frequently mess with your head during the time you decide to do this. Sure enough, the market makes a $ 500 move in your way and so reverses. You end up getting out at breakeven, as you didnt want to handle your stop up too tight.
This could happen over and over again. The more than times you change your gain objectives, the bad things will become. It is best to stick with the same gain scheme. If you have a high ease that you can be successful taking $ 500 gains and $ 250 losses, then stick to it. Dont worry about a market making a $ 2000 movement and missing out on gains. That will only drive you nuts. There will always be another trade coming in the future. If you have a profit and loss scheme that works, dont mess with it.
There is one pinch that I commend traders to do. You can assess the average daily reach over a period of time of 10 or 20 days and correct you profit end goal consequently. In time of high unpredictability, you might want to have an objective of $ 700. In periods of low volatility, you might want to lower the target to $ 350. I wouldnt make changes too frequently, but this gives you some ideas for tweaking your formula.
It is important for a trader to stay In the Zone so to speak. This means focus on taking your little slice of gains out of the market. Dont get greedy or egotistical and think you have to get every last penny of every movement. That type of thought is what gets traders to get mixed up and second-guess their trading. It clutters up their ideas and finally gets them to generate losses.
Tuesday, 25 March 2014
Posted On 11:56 am By: MCX BULLIONS Follow us on twitter
some of the biggest deviations between successful and unsuccessful people. understand five of them :.
1. Successful people adopt change. Unsuccessful people fear it. "Adopting change is one of the hardest things a individual can do," . With the planet acting quicker and technology speeding up at a speedy fastness, it's essential that we adopt these changes and accommodate, rather than fear them, deny then, or hide out from them, he says. Successful people are able to do just that.
2. Successful people speak about thoughts. Unsuccessful people speak about people. Alternatively of dishing the dirt specialized in people - which gets you nowhere - successful people talk about ideas. "Sharing ideas with other individuals will only make them better,"
3. Successful people admit responsibility for their losers. Unsuccessful people fault other individuals. Truly successful leaders and business people experience both ups and downs in their lifetimes and careers. But they always admit duty for their losers. Kerpen says faulting other individuals solves not anything. "It just puts other individuals down and perfectly no good comes from it.".
4. Successful people give other individuals all the credit for their victories. Unsuccessful people take all the credit from other individuals. Letting people have their instants to shine needs them to work harder, and, accordingly, makes you look better as a leader or teammate.
5. Successful people want other individuals to have success. Unsuccessful people in secret hope other individuals fail. "When you 're in a company with a group of people, in order to be successful, you all have to be successful," . That's why the most successful people do n't wish for their loss of life ; they want to see their workfellows win and develop.
Other major deviations : successful people exude joy, share data and info, read every day, and continuously learn, while unsuccessful people exude anger, hoard data and info, see TV every day, and fly by the seat of their pants.
I KNOW THERE ARE LOTS OF OTHER MAJOR IMPORTANT THINGS IN BETWEEN SUCCESS AND UNSUCCESS BUT THESE WERE JUST VERY IMPORTANT I FELT.
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