ABC of Stock and Commodity Trading

ABC of Stocks and Commodity Trading

Stock Market is a place where the stock trading takes place. A place where lots of money is invested to buy stocks and lots of money is earned while selling stocks. Some people goes with profit and some people carries losses. But still for a trader it’s a everyday game. And in games there are certain rules and regulations to be followed then only you can’t make strategies and plans and play the game according to it and win it. For a new trader the first thing to know about is where to invest, how to invest, how much to invest and win the game of investment.

Now the question is how to invest?

When an investor starts investing in the stocks or the commodity market he has some prominent exchanges to invest in. Few important ones are as follows:

1. BSE (Bombay Stock Exchange): BSE is the oldest stock exchange in Asia and has the greatest number of listed companies in the world, with 4700 listed as of August 2007. Here the trading in stocks takes place. It is located at Dalal Street, Mumbai, India. On 31 December 2007, the equity market capitalization of the companies listed on the BSE was US$ 1.79 trillion, making it the largest stock exchange in South Asia and the 12th largest in the world. BSE’s key index is sensex.
2. NSE (National Stock Exchange): It is the largest stock exchange in India in terms of daily turnover and number of trades, for both equities and derivative trading. NSE has a market capitalization of around Rs 47, 01,923 crore (7 August 2009) and is expected to become the biggest stock exchange in India in terms of market capitalization by 2009 end. NSE’s key index is Nifty.
3. MCX (Multi Commodity Exchange): MCX is an independent commodity exchange based in India. It was established in 2003 and is based in Mumbai. The turnover of the exchange for the period Apr-Dec 2008 was INR 32 Trillion. MCX offers futures trading in Agricultural Commodities, Bullion, Ferrous & Non-ferrous metals, Pulses, Oils & Oilseeds, Energy, Plantations, Spices and other soft commoditie
4. NCDEX (National Commodity & Derivatives Exchange Limited): NCDEX is an online commodity exchange based in India. It was incorporated as a private limited company incorporated on April 23, 2003 under the Companies Act, 1956. It obtained its Certificate for Commencement of Business on May 9, 2003. It has commenced its operations on December 15, 2003. NCDEX is a closely held private company which is promoted by national level institutions and has an independent Board of Directors and professionals not having vested interest in commodity markets.

What are stocks?

Plain and simple, stock is a share in the ownership of a company. Stock represents a claim on the company's assets and earnings. As you acquire more stock, your ownership stake in the company becomes greater. Whether you say shares, equity, or stock, it all means the same thing.

When you buy the shares of a company you become one of the many owners of that much portion of a company. In other words you own a part of the company.

How to trade in stocks?

An investor can open the required accounts (Demat and Trading) with a registered broker with NSE or BSE (whichever exchange he want to deal with) and start purchasing and selling the stock of his wish.

What are Commodities?

A commodity is some good for which there demand is, but which is supplied without qualitative differentiation across a market. It is a product that is the same no matter who produces it. Generally, these are basic resources and agricultural products such as iron ore, crude oil, coal, ethanol, salt, sugar, coffee beans, soybeans, aluminum, copper, rice, wheat, gold, silver and platinum in which trading is done throughout the Commodities of the world.

How to trade in Commodities?

For trading in commodities an investor have to open a commodity account with either MCX or NCDEX (whichever commodity exchange he wants to trade in) and start buying and selling commodities.

But dealing with the stock and the commodity market is nothing less than solving a complicated problem in mathematics. You have to apply algorithms, use formulae, study trend and above all analyze the market properly before you actually start investing. Without all these steps your money will go in waste and you may incur huge losses.

Some of the basic tips for increasing profits and minimizing losses in the stock and the trading market are:

1. Cut Your Losses

2. Let Your Profits Run

3. Follow the Trend

4. Don`t Overtrade

5. Always Trade Liquid Stocks

6. Keep Positions Small

7. Don`t Buy Something Because it Looks Cheap

8. Take tips and advises from proven experts.

So if you are planning to invest in the stock and the commodity market then see, analyze and then act. There are many tips providing companies which are giving tips on how and where to invest your money in the share market. They tell you exactly which stock is beneficial to invest. They give you ideas about when and what to buy and when to sell. Follow the rules and you will surely be the winner. One of the leading among such advisors giving tips and recommendations on stock investment and investment in commodities is CapitalVia Global Research Limited.

A Bangalore based share investment Recommendation Company CapitalVia has got a team of expert researchers and analysts who can tell the trend of the market just by watching the present situation. Their predictions never go wrong. They give the tips with 90% accuracy. They provide 24x7 hrs support. What else to think about now? Simply log onto to www.capitalvia.com for more information and subscribe for FREE trial. They provide two days Free Intraday Trading trial. You can avail NSE, BSE, MCX, NCDEX, Stock Tips, Share Tips, Commodity Tips, Intraday Tips, Intraday Trial from them. Join and earn with them.

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Diveya Alok Simon

diveya.simon@capitalvia.com

CapitalVia Global Research Limited

www.capitalvia.com