iCharts Discussions

[krishnalko]

Trading in commodity has one very clear advantage over equity that it solely reflects supply and demand equation. It can not be manipulated by promoters etc and over all a trader has not to worry about the so called "fundamentals" of the "company" which many time changes overnight these days. We have seen few examples of very bad corporate governess in recent times not only in India but world wide. When management of companies can ditch to institutional experts by manipulating the "books" then where a retail trader/investor stands with his very limited understanding based on information (pre-calculated) through some very ordinary sources like TV channels or balance sheet etc. Please note that a retail investor comes to know only that much info which is intended to pass on and rest is "sensored".Then considering all this issues trading directly in commodity seems more logical and makes better sense।1-Trading in commodities requires strict technical discipline.2-Price is the KING.This is truth that nothing can be more helpful than proper understanding of technical. One has to develop and use some "trading system" for successful trades.The point to note is that undisciplined trader will loose in all asset classes. For equity trading I find index or sub indices as more sensible bet than taking positions in individual "stocks”. My whole concept is that "my money should not receive punishment" due to wrong deeds or decisions by "company management" etc.All of have seen instances when even after parking our money in "right sector" our particular stock did not perform. The reason for this under performance was some mistake done by company management but it was retail investor who received the punishment. Here the important point to note is that fundamentals of a particular sector may widely differ from the fundamental of a particular company in the same sector. So the work of finding out the right sector and then the right stock of the same sector can become more complex than understanding the fundamental of a particular commodity itself. Institutions also understand this and so planning more commodity ETFs which wud certainly help increasing the depth in commodity market. Right now few GOLD ETFs are very popular and even launch of silver ETF was in pipeline. I had even heard the voices regarding launch of Crude Oil ETF. I see this situation as more and more people turning towards commodities in future and hopefully more popular products like ETFs will appear in due course. Who does not know that lastly it is commodity market which drives the equity but vice-versa perhaps may not be true.

[sjjhala]

atleast commodities will be able to give us physical delivery of gold and silver, unlike equity futures where the settlement is only in cash (smiling)

[sandew]

ETF worldwide are known to create locked-demand - all gold etf agencies have to purchase gold in parallel. Silver has higher storage and transportation costs not to mention more purity concerns than gold. Oil etf, where will you store, the evaporation cost during storage, and has other concerns. I prefer cash any day rather a barrel of crude!

[rksharma1091]

Thanks.Commodities are great for trading as said by my frens krishnalko,sjjhala and sandew.I deal in commodities,equities,forex and trading all sort of things but i always keep multi risk management in place by hedging.All the deal must be with in my risk management parameters which i can afford.I learn first by mock trading then actual trading i manage risk so that pain is zero or negligible if i loose.Understanding theory and practical is very important.Market is king.

[mbn]

Rksharma u rocks .......:d