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Top Most Reason of Loosing Money in Commodities trading

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Lost Money in trading

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As we all are Commodity Trader, so this post is really very much important to know as well as need to understand the facts ...


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.


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.

Lack of Education on Commodity Trading


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.


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.

Over Leveraged Commodity Trading


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.

Money Management


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.
Money Lost in trading

Commodity Trading Plan


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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Latest FMC NEWS applied from 1st April : Commodity traders must read !!

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broker in commodity

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.
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Exchanges have also been asked to put in place a suitable mechanism to enable members report collection of all margins from the
ir clients at the end of each trading day and to report short collection and non-collection on fifth day.
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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.
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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.

Successful And Unsuccessful People 5 important Difference

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some of the biggest deviations between successful and unsuccessful people. understand five of them :. 

Successful And Unsuccessful People 5 important Difference


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.


FINAL WORDS,

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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Common errors you should avoid while investing to save tax : MCX Operator

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Mistakes We Make
(Picture for representation only)

A young married couple walks into the local branch of a private bank on a cloudy, cold weekday of January. Both of them are getting late for office, but have enough time tostart a tax-saving fixed deposit (FD).
The bank executive, instead, sells them a 'better' product, whose gains are non-taxable, unlike FDs.
The product that he offers is a tax-saving plan that also gives them life cover, guaranteed returns and bonus. And guess what, they can withdraw the money after five years, when they will receive the premium along with added bonus. They think it's a good deal and write the cheque.
This story is repeated so many times every year between January and March. The ending, too, is always the same-people making costly financial mistakes while investing to save tax or declaring expenses against which they can claim tax deduction. We discuss a few such mistakes.

DELAYING TAX-SAVING INVESTMENTS:

The most vulnerable are those who consider tax saving as once-in-a-year ritual to be repeated at the end of every financial year.
The first casualty is the monthly budget, which may go haywire because of a large one-time investment. Therefore, the mantra is to plan early and invest in a staggered manner.
You can start systematic investment in a tax-saving fund or put a small amount every month in Pubic Provident Fund (PPF) or National Pension System (NPS). Both PPF and NPS allow 12 transactions a year.
INVESTING IN ENDOWMENT INSURANCE PLANS: This usually happens when you walk into a bank and seek the advice of its executives. Banks usually prefer to sell a product that gets them the highest commission, which is invariably an endowment insurance plan. So, while they receive 30-35% of the first-year premium as commission and 5% in the subsequent years, the investor earns 6-7% a year if he pays premium for the full term.
Most people do not realise that an endowment plan is a long-term product with a maturity period of 10-20 years. If you pay premium for only five years and then redeem the investment, it's likely that you will get less than even your principal. They also do not realise that a part of the endowment plan premium goes towards mortality charges and distributor commission.
All you need is a simple investment plan such as a tax-saving mutual fund or PPF, both of which give taxfree returns. For insurance, buy a term plan. The premium is eligible for tax deductible.
HAVING TOO MUCH MONEY IN FDs AND NSCs:
Another common tax-saving strategy involves starting a fiveyear FD or purchasing national saving certificates (NSC). The interest earned on both is taxed, which makes these products less attractive. Interest earned on both FDs and NSCs is taxed as per the person's income tax slab. Besides, the interest rate on tax-savings FDs is lower than what normal FDs pay.
"FDs and NSCs give post-tax returns that are less than the inflation rate," says Tanwir Alam, CEO and founder, Fincart, a financial planning company.
TAX-SAVING OUT OF SYNC WITH OVERALL PORTFOLIO:
The tax-saving investment is a subset of your overall portfolio. The two should not be viewed separately.
"Not choosing tax-saving options keeping in mind the overall portfolio is wrong. It causes imbalance," says certified financial planner Pankaj Mathpal.
For example, if your overall portfolio is equityheavy, you may want to save tax using fixed income products such as PPF.
But most investors usually have a debt-heavy portfolio due to employee provident fund, fixed deposits, endowment plans, etc. So, they can look at tax-saving mutual funds, which have 100% exposure to equity, or NPS, where equity exposure is up to 50%.
You must figure out the ideal equity-debt ratio for your portfolio and allocate funds accordingly. The equity-debt ratio of your portfolio will depend upon your age, risk appetite and financial goals.
NOT LOOKING BEYOND SECTION 80 C:
People often do know that they can save tax over and above the Section 80C limit of Rs 1 lakh. Interest on housing and education loans, health insurance premium, medical expenses, etc, are also eligible for income tax deduction. Apart from these, donations to political parties and for scientific research, rural development and government relief works are also deductible.
"While making donations under Sec 80 G make sure you are doing it to institutions approved under Section 80G of the Income Tax Act," says Kapil Narang, chief operating officer, Ameriprise India Advisory Services.

Google gives Hangouts iOS app WhatsApp-like makeover

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Google gives Hangouts iOS app WhatsApp-like makeover

Google gives Hangouts iOS app WhatsApp-like makeover
Google has reportedly updated its Hangouts app for iOS, which looks strikingly similar to rival apps Facebook Messenger and WhatsApp. The updated app includes tabs at the bottom of the screen with categories like Hangouts, Favorites, and Contacts, akin to the rival messaging apps.
According to Mashable, the new version also includes features like sending videos, stickers and location within a conversation, which was earlier not possible. The new Hangouts app has been also optimized for iPad and includes two panes, allowing users to chat on one side of the screen while scrolling through their contacts or existing Hangouts on the other.
The report said the latest change to Google's Hangout reflects the heightened expectation that mobile users have regarding their messaging apps, especially in light of the recent multi billion-dollar purchase of WhatsApp by Facebook. 

UK flooding impact on agricultural commodities

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Persistent heavy rains across southern England have led to severe flooding in the South West of England, with an estimated cost to insurers of up to £1billion according to Deloitte LLP. The Environment Agency has a total of sixteen severe flood warnings, with a further 133 flood warnings in place after two months of record-breaking levels of rainfall. Forecasts suggest that the pattern of heavy rains will continue until February 21st.
In addition to the 7500 homes flooded since December, another 600 have been flooded in the past week alone. On top of this, large tracts of land in the South West, particularly along river basins and coastlines have also been flooded. Farmers in the South West have been hit especially hard, and many hundreds of acres of crops have been devastated in Norfolk and Somerset. Somerset, in particular, has seen 150 properties evacuated since Christmas. Many villages have been cut off and local authorities, charities and neighbours have been working to evacuate livestock from farms as floodwaters rise. As storms and tidal surges continue to buffet the United Kingdom, damage is likely to increase yet further.
Large tracts of agricultural land having been flooded, agricultural yields are likely to be impacted in low-lying South Western farms, with most farmers being forced to wait out the bad weather and hoping that flood waters will subside or that the government will finally be able to get flooding under control.
According to an update by Communities Secretary Eric Pickles given to Parliament on Monday, military aid and funding for flood measures will continue as the Rivers Thames, Severn and We are set to flood in the middle of the week. Pickles was criticized for a controversial statement on Sunday where he appeared to criticize the Environment Agency’s handling of the flooding crisis. It was claimed that Pickles was merely seeking a scapegoat to disguise the government’s own failings in dealing with the crisis.
Regardless of the political infighting, it is clear that UK flooding is at disastrous levels and is only likely to get worse in the coming days. Farmers in the South West and even South East are likely to be severely impacted with further damage to their lands, and supplies are therefore likely to be impacted.
There is likely to be some interest in this news by those involved in commodities trading, as the disastrous damage is likely to cause a spike in the prices of UK-manufactured agricultural commodities. In 2012 the US Midwest suffered a record-breaking drought which pushed corn and soy prices up by more than 50% in five weeks, to near record highs. While the impact in the UK is likely to be much milder, there is not likely to be insubstantial price movement.

Dabba trade Online

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Operators in the dabba trade - which is grey market for commodities futures - just got user-friendly. With hectic activity in bullion following a recent bull run, even lay investors are being wooed with this technology which enables striking dabba deals at the click of a mouse.
From the old-fashioned method of telephoning the operator to book a deal, agents of dabba players, since the last few months, are vending a software which enables trading through a computer. It does away with the hassles of calling up the agent, leaving no scope of a dispute in case of a mis-communication, say these agents as they push this new product. This makes it similar to the online trading facility available through an authorized broker of a legal exchange, where one also gets a personalized account for trading. TOI came across with one such vendor from the dabba trade.
MCX being the major exchange for metals futures, its rates here are taken as a reference for bullion. The National Commodities and Derivatives Exchange is the benchmark for dabba in agriculture products.

With the new software which can be downloaded from a site www.mcxoperator.com, trading can happen at the click of the mouse after paying the margin money, accepted only in cash. Rates of commodities like gold, silver and crude can be seen on real time basis on the computer, which are exactly similar to those shown on the legal MCX screen.
"The margin differs for each commodity but much lower than that charged by the exchange. For gold, it is Rs 75,000 for one kg lot and silver is Rs 15,000 for a 30 kg lot. The margin is less if the client goes for an intra-day trade, which means the deals are squared off the same day unlike the regular 20-day contract." explained the agent contacted by TOI.
Asked how could they manage to get similar rates as the MCX screen, the agent said that this where the software comes to play. If one uses the legitimate online trading facility, the deals are recorded with the MCX, but with this software the data is fed in a separate server altogether. The software also gives continuous information of the profit or losses of the trader. The deals are automatically barred if the losses go beyond 80% of the margin money, said the agent. Deals can also be struck on the basis of the rates in US-based Comex for which real time rates available too.
"The final settlement is made on weekly basis. Our man will deliver the amount of profits in cash each Saturday," he added.
The agent said that the show in Nagpur is run by a person named Agrawal who also has a stake in grain trading business with an office in Wardhman Nagar. Reluctant to divulge his first name, he said that the nodal centre is a UAE-based business house, while Agrawal is a dealer in Nagpur.
A sposkerspon of MCX said that the exchange has no control over such elements. However, he admitted that the volume in the grey market would be equal to the trade recorded in all the bourses together. There are six exchanges in all.
Ramesh Abhishek, chairman of Forwards Markets Commission, the regulator for commodity exchanges, said that action can be taken if a specific complaint is lodged. The FMC is already running an awareness campaign in association with state police departments against the risks involved in the dabba trade, he said.


What is dabba?

Dabba is a term used for an illegal market run parallel with a legal stock or a commodity exchange. With deals struck in cash, it enables transaction in unaccounted money. Sources in the business estimate that the volume in dabba trade can be as much as that recorded in all the legitimate commodity bourses. So far, the known method was of the operator having an MCX or any other terminal just to refer the rates, while the orders are taken on phone. With this, deals are not recorded in the exchange's server but in a parallel account maintained by the operator, but the software may be a trend-changer.

Commodity Crude Oil : Crude Slides on Lackluster Data, Profit Taking

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Crude prices fell on Friday after lackluster data sparked a round of profit taking, ending gains stemming from a winter storm plowing across the eastern seaboard that likely hiked demand for heating oil. On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in March traded at USD100.16 a barrel during U.S. trading, down 0.19%. New York-traded oil futures hit a session low of USD99.45 a barrel and a high of USD100.46 a barrel.



The March contract settled down 0.02% at USD100.35 a barrel on Thursday. Nymex oil futures were likely to find support at USD99.41 a barrel, Thursday's low, and resistance at USD100.65 a barrel, Thursday's high. The preliminary Thomson Reuters/University of Michigan consumer sentiment index remained unchanged at 81.2 for February, beating expectations for a fall to 80.6. Elsewhere, the Federal Reserve reported earlier that U.S. industrial production fell 0.3% in January, defying expectations for a 0.3% rise after a 0.3% increase the previous month. Data also showed that U.S. import prices rose 0.1% last month, confounding expectations for a 0.1% down tick after a 0.2% rise in December. 

Profit taking sent prices falling as well, as investors priced in the likelihood a powerful winter storm that dumped snow across the eastern U.S. hiked demand for heating oil and later sold crude futures for profits. Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for April delivery were up 0.11% and trading at 108.64 a barrel, while the spread between the Brent and U.S. crude contracts stood at 8.03 a barrel.

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PRECIOUS-Gold rises above $1,300, posts biggest weekly gain in 6 months

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* Gold rises with Wall St despite weak US economic data
* Break above 200-day moving average triggers buying
* Gold ETF reports inflow, investment sentiment rises
* Coming up: US New York State manufacturing index Tues
(Adds comment, second byline, dateline, updates market
ORK/LONDON,
activities) By Frank Tang and Clara Denina NEW Y Feb 14 (Reuters) - Gold rose to a
ce on Friday, gaining 1 percent and notching its biggest we
three-month high above $1,300 an ou nekly gain in six months, as weak U.S. manufacturing output pressured the dollar and lifted
-day moving average, and signs o
bullion's currency-hedge appeal. A technical break-out above tough resistance at its 20 0f recovering investment demand in gold exchange-traded funds, also triggered gold buying, traders said.
certainties and emerging-market jitters. On Friday
Bullion reversed its recent strong inverse link with equities, which had been pressured by economic u, U.S. equities, measured by the S&P 500 index , rose 0.5 percent as investors were willing to add riskier investments by overlooking some soft economic data
licy threatening slow retre
stemming from bad weather. "Risk-on is typically deemed bad for precious metals prices, but the downdraft for the dollar and the steady-as-she-goes Fed p oat from an ultra-easy stance, is boosting demand for gold," said Andrew Wilkinson, chief market analyst at Interactive Brokers LLC.
0.90. It was up around 4 percent for the week, the larges
Spot gold was up 1.2 percent at $1,317.90 an ounce by 2:06 p.m. EST (1906 GMT), after rising to its highest since Nov. 7 at $1,3 2t such gain since mid-August. U.S. gold futures for April delivery settled up $18.50 at $1,318.60 an ounce, up for an eighth straight session
howed. The technical picture has improved o
in the longest winning streak since July 2011. Trading volume was about 10 percent below its 30-day moving average, preliminary Reuters data sver the past few sessions and a move above its 200-day moving average, last seen in August 2012, analysts said. However, some traders noted that the 14-day relative
nning of the year, after a 28 percent drop in 2013, on doubts ov
strength index (RSI) for spot gold jumped to about 74. A reading above 70 is considered to be in overbought territory. Gold has gained nearly 9 percent since the beg ier the U.S. economic recovery and as emerging-market turmoil weighed on some equity markets. Analysts remain cautious over the medium-term outlook for gold, however. Many expect the U.S. economy to recover and the
cked exchange-traded fund, posting its biggest inflow since l
dollar to rally, making the investment case for gold, usually seen as a safe haven in times of trouble, still unattractive. Investor sentiment seems to have improved, with SPDR Gold Trust, the world's largest gold-b aate December, up 7.5 tonnes to 806.35 tonnes on Thursday. Silver climbed to its highest since November at $21.42 an ounce earlier and posted its second straight weekly gain. It was up 4.3 percent for the day at $21.32. Platinum gained 0.8 percent to $1,423.50 an ounce,
412.10 1431.50 9,842 US Pall MAR 737.60 6.50
while palladium climbed 0.6 percent to $733.25 an ounce. SETTLE CHNG CHNG VOL US Gold APR 1318.60 18.50 1.4 1299.90 1321.50 134,486 US Silver MAR 21.421 1.026 5.0 20.445 21.440 66,629 US Plat APR 1430.10 13.50 1.0 10.9 730.00 740.45 5,375 Gold 1317.90 15.60 1.2 1300.35 1320.90 Silver 21.320 0.870 4.3 20.480 21.420 Platinum 1423.50 11.75 0.8 1415.25 1429.50 Palladium 733.25 4.35 0.6 733.30 739.50
Platinum 10,046 10,646 13,326 17.78 -0.15 US
TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 141,723 172,213 186,052 18.69 0.23 US Silver 82,528 43,600 56,067 26.53 0.36 U S Palladium 6,973 4,042 5,542 19.08 0.56 (Additional reporting by A. Ananthalakshmi in Singapore; Editing by Nick Zieminski; Editing by David Evans and Dale
Hudson)

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Gold, silver prices surge on strong seasonal demand

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Gold Silver

Gold prices spurted by Rs 180 to Rs 30,980 per ten grams in the national capital on brisk buying by stockists and retailers for the ongoing marriage season amid a firming global trend.
Silver surged by Rs 800 to Rs 46,000 per kg on increased off take by jewelry fabricators and coin makers.
Traders said sentiments bolstered as stockists and retailers remained net buyers to meet the ongoing marriage season demand amid a firming global trend where gold traded above $1,300.
Gold in Singapore, which normally sets price trend on the domestic front, rose 0.6 per cent to $1,310.70 an ounce, the highest since November 8 and silver by 1.9 per cent to $20.88 an ounce, its highest since November 14.
In Delhi, gold of 99.9 and 99.5 per cent purity surged by Rs 180 each to Rs 30,980 and Rs 30,780 per ten grams, respectively. Sovereign rose by Rs 100 to Rs 25,400 per piece of eight grams.
In a similar fashion, silver ready shot up by Rs 800 to Rs 46,000 per kg and weekly-based delivery by Rs 755 to Rs 45,515 per kg.
Silver coins too spurted by Rs 1,000 to Rs 87,000 for buying and Rs 88,000 for selling of 100 pieces.
In Mumbai, gold of 99.9 and 99.5 per cent purity rebounded by Rs 170 and Rs 190 to Rs 30,650 and Rs 30,520 per ten grams, respectively. Silver jumped by Rs 1,050 to Rs 46,800 per kg.
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WHY GOLD SILVER UP ? FOR TECHNICAL ANALYST

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NEW DELHI: Gold prices recovered by Rs 50 to Rs 30,800 per ten gram in the national capital today on scattered buying amid a firm global trend. 

Silver also rose by Rs 260 to Rs 45,200 per kg on fresh buying by stockists and industrial units for the ongoing marriage season. 

However, Gold of 99.9 and 99.5 per cent purity in Mumbai declined by Rs 60 each to Rs 30,480 and Rs 30,330 per ten gram, respectively; while silver rebounded by Rs 150 to Rs 45,750 per kg. 

Traders said scattered buying for the ongoing marriage season and a firm global trend mainly led the recovery in the precious metals. 

Gold in New York, which normally sets price trend on the domestic front, traded marginally up 0.07 per cent to $1,291.80 an ounce. 

On the domestic front, gold of 99.9 and 99.5 per cent purity recovered by Rs 50 each to Rs 30,800 and Rs 30,600 per ten gram respectively, while sovereign met with resistance and declined by Rs 50 to Rs 25,300 per piece of eight gram. 

In a line with a general firm trend, silver ready rose by Rs 260 to Rs 45,200 per kg and weekly-based delivery by Rs 120 to Rs 44,760 per kg. 

Meanwhile, silver coins remained steady at Rs 86,000 for buying and Rs 87,000 for selling of 100 pieces. 
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