Benefits of Commodities/Currency Trading:
- Good for beginners
First-time traders looking to make small investments upto Rs.5000 can easily enter the forex market.
| CURRENCIES | MARGIN FOR TRADING | LOT SIZE | EXPIRY |
| USDINR | RS.2500 PER LOT | 1000 | WEEKLY & MONTHLY |
| GBPINR | RS.3000 PER LOT | 1000 | MONTHLY |
| JPYINR | RS.2500 PER LOT | 1000 | MONTHLY |
| EUROINR | RS.2500 PER LOT | 1000 | MONTHLY |
Leverage
The brokers allow you to borrow against a small investment, thereby, giving you a chance to open a high position. There is a ratio that will show the money you can raise from leverage.
- Technology
There are plenty of software and mobile applications that facilitate trade in real-time from around the world.
- Nobody controls the market
There is a large number of participants in the currency market, which is why no single player, but only external factors such as the economy can control prices. This factor reflects the importance of foreign exchange as an investment option on traders’ portfolios. No middlemen exist in this market, and brokers only help connect buyers and sellers.
Trading Options
Forex markets provide traders with a wide variety of trading options. Traders can trade in hundreds of currency pairs. They also have the choice of entering into spot trade or they could enter into a future agreement. Futures agreements are also available in different sizes and with different maturities to meet the needs of the Forex traders. Therefore, Forex market provides an option for every budget and every investor with a different appetite for risk taking.
Diversification of Portfolio
It offers a means for diversification of portfolio for the investors, by offering exposure to an asset class different from stock markets instruments such as equities, mutual funds and bonds.
Leverage
Trading in commodities futures/ currencies futures involves use of leverage through margin which is maintained with the broker. Hence, large transactions can be executed with lesser amount of cash in hand.
Liquidity
Futures contracts in commonly traded commodities such as gold, silver, crude oil and grains offer a high level of liquidity in the market. Similarly, the currency markets offer high levels of liquidity as a large amount of trades are conducted per day.
What is Currency / Commodity trading?
Damruwale is one of the leading players in the broking space in India and offers broking services in various categories of equity, commodities, currency, derivatives and so on. These services are supported by a strong in-house research team and an excellent customer support system. Trader Terminal, the proprietary trading terminal of Damruwale offers the convenience of trading in commodities by providing flexibility of access, through desktop application as well as a browser-based web application.
What is commodity/currency trading?
Commodities’ trading involves trading in every kind of movable property other than actionable claims, money and securities. These include gold, silver and other metals and select agricultural commodities. Currency trading refers to the exchange of currencies, where the difference in the currency value is used to make profits. It is a huge market, with traded value being higher than equities.
Develop a Diversified Asset Allocation Strategy
When selecting stocks to invest in, you should carefully consider the risks of stock investing and develop a diversified asset allocation strategy that fits with your goals, investing time frame, and risk tolerance.
- Invest in approximately 20 to 30 stocks in at least six to eight sectors with different investment characteristics.
- No more than 20% of the total value of your stock portfolio should be in any one sector.
- No more than 10% of the total value of your stock portfolio should be in any one stock.
- You should invest a minimum of approximately 3% to 4% of the total value of your stock portfolio in each stock.
Deciding which stocks to invest in can be difficult, especially if you have a low tolerance for risk. That’s why it’s important to define one’s financial goals and how much risk can be tolerated. Research stocks that fit within your strategy and invest in stocks that have the potential to help you meet your specific goals, whether you want investment growth, income, or a combination of the two.
Your Financial Advisor can provide you with a wide range of stock investing services, including:
- Asset allocation strategy development
- Individual stock selection
- Help in deciding when to buy and sell your stocks