Emerging Opportunities in Commodity Market

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Emerging Opportunities in Commodity Market
ITS ALL ABOUT MONEY, HONEY!
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Todays Topics

• Introduction about trading
• Introduction about Technical Analysis

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WELCOMES YOU WISH YOU ALL PROFIT Through Technical
Analysis
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What is Trading ????

• Buy and Sell is Trading!!!
• Buy Sell Profit (or) Loss

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Difference

• Physical Trading Online Trading
• Handling Risk No Handling Risk
• 100 investment 5 - 10 Investment
• Single way Profit Two way profit
• Trader based settlement MTM settlement

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Online Trading Concepts
BUY
SELL
HS
LB
LB
HS
Buy Profit
Sell Profit
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Rs.25
HS
HS

Sell Profit
Buy Profit
Rs.20
LB
Rs.20
LB
ITS ALL ABOUT MONEY, HONEY!
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Example for Rice Physical Trading
Rs.10,00,000
Investment
Rice Qty
50 MT
Buy Rate Rs. 20, Sell Rate Rs. 25,
Profit Rs. 5
Profit Rs. 2,50,000, Exp Rs. 50,000,
Net Profit Rs. 2,00,000
Rice
S / D
Dec / Jan
Jul / Aug
Rs.20
Rs.5
Rs.25
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Example for Rice Online Trading
Rs.1,00,000
Investment
Rice Qty
50 MT
Buy Rate Rs. 20, Sell Rate Rs. 25,
Profit Rs. 5
Profit Rs. 2,50,000, Exp Rs. 1,500,
Net Profit Rs. 2,48,500
Rice
S / D
Dec / Jan
Jul / Aug
Rs.20
Rs.5
Rs.25
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Different Types of Market

Spot Market - Real Market
Future Market - Contract Basis
Forward Market
ITS ALL ABOUT MONEY, HONEY!
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Online Trading Future Market
Share Trading ( NSE BSE ) - SEBI
Commodities Trading ( MCX NCDEX ) - FMC
ITS ALL ABOUT MONEY, HONEY!
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Products
Agro Commodities Metals Precious Metals Energy
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Commodity Market Timing
Market Timing 10 A.M to 5 P.M - (
Indian Commodities ) 10 A.M to 11.55 P.M - (
International Commodities ) Market Driven by
Demand and Supply
ITS ALL ABOUT MONEY, HONEY!
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ONLINE TRADING
Share Trading
Commodities Trading

• Market Driven by Demand and Supply

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Example for Demand and Supply
Example -
Gold
S / D
Dec / Jan
Jul / Aug
Rs.1600
Rs.100
Rs.1700
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How to Find Demand and Supply?
Demand and Supply
Fundamentals
Technical Analysis
Symptoms
Human Psychology
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How to do Online Trading?

• We have to predict Demand Supply

• 75 Home Work
• 25 Investment.

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How To Do Online Trading?

• What is Home Work?
• Fundamentals
• Technical Analysis
• Market Knowledge

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Technical Analysis

1. Trend ( Up or Down )
2. Target (Support / Resistance)
3. Timing

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Trend

• Up trend, Down Trend, Neutral Trend
• Doesnt necessary be a smooth line

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How to Trade in Trend?
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Support Resistance
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Technical Analysis

1. Chart Patterns
2. Chart Analysis
3. Tool Analysis

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Chart Patterns

• There are two types of Chart patterns

• Trend Reversal
• Trend Continuous

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Trend Reversal Chart Patterns
Double Top Pattern
Triple Top Pattern
Head and Shoulders
Inverted Head and Shoulders
Double Bottom Pattern
Triple Bottom Pattern
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Chart Analysis

• There are mainly three types of chart, which is
  popular amongst analyst.

1. Line Chart 2.Candle Stick 3.Bar Chart
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Charts- Line Chart

• A line chart is simply a graph of the value of
  a currency taken at regular time intervals based
  on current prices.

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Charts- Candlestick

• Started in Japan in 1700s for rice trade
• Theres a link between price and supply demand
  of rice BUT theres also the emotions of
  traders.
• The candlestick chart analysis measures the
  market emotions.

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Major Candlestick Signals
DARK CLOUD
EVENING STAR
ENGULFING
HARAMI
DOJI
MORNING STAR
HAMMERS HANGING-MAN
PIERCING
ENGULFING
HARAMI
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Tool Analysis

• Tool analysis indicating signals for Buy Sell
• There are more than 200 tools available in Tool
  analysis
• Tool analysis indicating signals based on Price
  Volumes
• Here we are considering only 3 major tools

• Stochastic Oscillator
• Moving Average
• Parabolic

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Moving Averages (MA)
Whats MA? It smooth out price data and
observe the general direction of movement for a
stock. Types of MA 10-day, 20-day, 50-day,
100-day, 200-day Function 1.Signal to
Buy/Sell 2.Support
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MA Signal to Buy
Key Crossover Movement ST 10-day MA
crosses 20-dayMA Moving Upwards
Signal to Buy
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MA Signal to Sell
ST 10-day MA crosses 20-day MA Moving
Downwards
Signal to Sell
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Oscillators
Oscillators are indicating the market
condition, Like overbought and oversold Be
careful it might just be the beginning of the
trend, only use it in trading in neutral
market Examples of oscillators
used -Relative Strength Index (RSI) -Moving
Average Convergence Divergence (MACD) -Stochastic
etc.
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Over Bought Over Sold
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Stochastic
Theory In an uptrend market, closing prices tend
to be near the highs In a downtrend market,
closing prices tend to be near the lows K line
and D line K 100(C - L14)/(H14 - L14) C
current closing price L14 lowest low price
during 14-day period H14 highest high during
14-day period D K smoothed over three days
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Stochastic
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Implementing Technical Analysis for Trading

• Before taking Position we have to Desire 4
  things
• Entry levels
• Targets
• Stop Loss
• Timing

• Role of Discipline, Risk/Money Management in
  trading

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Conclusion

• When to use technical analysis
• looking for short-term
• Indicators are only indicators
• When fundamental analysis is more appropriate
• Long-term
• Or combine both