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Commodity Trading for Beginners in Hindi | Share Market - YouTube
Channel: Pushkar Raj Thakur: Business Coach
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Well, Today's video is going to be very interesting
because of the topic on which we are going
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to talk today.
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Thousands of people have commented in the
last video that you have to learn how you
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can do commodity trading.
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In what ways is it different from stock trading?
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When we talk about the commodity market, many
people may not be aware of it.
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But in this video, my effort will be that
even if a child is in class six, then all
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the concepts should be crystal clear to him.
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Step by step we will proceed.
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But I will start this video with a story.
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This story is about the two farmers, who are
these farmers let me tell you.
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One is a farmer whom you can call a farmer
and the other who is a farmer is the kissan
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company, here you eat tomato ketchup and jam
of kissan company.
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So here we are talking about 2 farmers.
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So there is a farmer whose entire cultivation
is of tomato, then he is the farmer who cultivates
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tomato and on the other side it is the kissan
company which bought tomato from the farmer
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and it makes ketchup and sells in the market,
so when we are talking about two farmers,
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then I would like to tell you about both,
which is our first farmer who is growing tomatoes,
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who has farms.
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He is worried about the fact that this time
I have spent a lot of money.
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This time I bought a tractor, I have raised
money from the market at interest.
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This time I have applied pesticides and don't
know how many things I applied in my farming.
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I have invested a lot and if this time the
rate of ₹ 50 is going on in the market of
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tomatoes and if the rate will fall, then I
will be ruined.
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If this rate comes to 45 and 40 then I will
make a loss.
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Yes, I will make a profit if it goes above
50 to ₹60.
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But this farmer is afraid that this time the
rate of tomatoes in the market may fall.
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It can come below 40 and the farmer who is
here will suffer loss.
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On the other hand, the factory we are talking
about is our Kissan factory.
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Now the one who owns it here is also afraid,
he has to make ketchup, he buys tomatoes from
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the market and he sells them in the market
and for example, he sells ketchup bottles
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for ₹ 100.
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Now there is a bottle of ketchup for ₹ 100.
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You must have seen generally, that whatever
you buy from the market, there is a stagnant
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price for a long time.
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If you are buying a Dairy Milk of ₹ 10,
then it will not happen that it will be of
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rupees 12 yesterday.
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It will remain only ₹ 10.
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If we are talking about Kissan Ketchup, I
do not know what the rate is today's date.
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But if it is of ₹ 100, it will not happen
that if the tomato rate increases tomorrow,
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they will start selling 120 instead of 100.
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They will increase after some time.
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What is the problem that if once the rate
has increased, and after that, if the tomato
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rate is decreased then it can not bring it
down?
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Take another example, If you go to eat chole
bhature from somewhere and he sells it for 50
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If once he starts selling it for rupees 60
then he does not come back to 50 or 40.
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If once the rate is raised then it is fixed.
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The person who is running the factory for
the kissan has a fear that this time the tomato
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rate is going to grow very much, it may be
₹ 80 or ₹ 90.
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If they are giving a rate of ₹ 50 today
in the market and tomorrow it will increase
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to 80 or ₹ 90, it will be a loss because,
in the market, he will have to sell a bottle
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of ₹ 100, where the owner of the kissan
factory has a fear that if the rate increased,
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then there will be my loss and even if the
rate is reduced, there will be my loss.
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Now, what should they both do, there is a
need to get out of the derivatives you understand
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Today you talk about Future Trading.
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Today you talk about options trading.
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It was born this way.
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Now here, if the farmer is growing tomatoes
here if he will make a contract with kissan
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company that whatever I am cultivating today,
you will buy it on ₹ 50 and if you just
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contact that after 3 months and if he will
contract here that I will purchase it at the
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rate of 50 rupees after three months because
both are afraid.
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He has an opinion that if the rate is reduced,
he will get in trouble and he is afraid that
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if the rate increases then it will be a loss
for him.
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Then if people get a surety of this way that
there will be no loss to us, called hedge
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in the technical term.
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It is called hedging, the big institutes which
are doing business at a large level, their positions
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So the concept which you have understood is
a contract.
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You can call it a forward contract, and you
can take an Advance Version of it, Future contract
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Now let's understand what option contracts
are, what are options.
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Let me give you another example, suppose that
the farmer who is cultivating the tomatoes
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is scared, he says I will not.
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I will not do it and I feel that this time
I will suffer a loss so I sell the farm and
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go somewhere else.
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I will go to the city and I will do some other
work, then he thinks about selling his farm.
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You come to know that this farmer is selling
his field for ten lakhs.
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Now as soon as you come to know that you also
get the information that the next month's
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news is going to come that the government
is going to bring the highway there and you
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get this insider information that the highway
which is this farmer's farm, so the highway
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will build here and You think that if it will
build here, then the rates of this farm will
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increase a lot, then money has to give after
3 months.
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Now when we buy a property in today's time,
then first we pay its earnest money, we give
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a token amount and then you make his final
payment within 3 months, then you get a time,
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so here you go after this farmer and you say
that after 3 months I will buy your land for
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10 lakhs.
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Hold this ₹ 50000 and agree, then the ₹ 50000
you gave as a token, as options trading.
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It works in such a way that if the news comes
next month that the highway is going to be
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built there, then you will find many buyers
who will be ready to buy land for twenty to
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thirty lakhs.
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So you felt that I have to buy for ten lakhs,
It will reach by lakhs, then you will get profit
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You will give ten lakhs to the farmer and
you will make a profit of ten lakh rupees.
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So you did an initial investment of ₹ 50000,
then this fifty thousand investment is called
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option.
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Again, you understood the options trading
in the stock market.
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If you don't understand anything then, This
is the world of the internet when you think
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I don't know anything or I want details on
it then knowledge is available on the internet
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i just need someone to learn.
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You search, you invest your time.
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If today you feel that you do not know about
options trading.
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Although, well many of you have trading and
options strategies, on which we can make a
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complete series for you.
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You guys call us and ask questions about whether
you need courses.
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If we give you a complete training course
on Complete Option Strategy for free, then
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tell us by commenting.
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So, we are trying and It is our effort that
you get the best education and that too for
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free, this is our effort, so what is our effort,
your comment, then maybe we will provide you
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many free courses and free training on this
very soon.
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So, I have explained to you the concept of
an option here and we told you the training
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that will come if you can't wait and if you
want to learn anything then go to the internet
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and search on google and search on youtube
and you will find whatever you want to learn,
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just need a person to learn.
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Unless you keep wasting your time on entertainment,
you will not be able to grow and this is such
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a big world of finance that even if you will
learn it for your whole life, then that is
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also less, than the topic on which you get
interested and curiosity, search that and
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learn you will grow as much as you will learn.
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So this is a basic understanding.
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Now when we talk about the stock market, you
buy the stock.
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Whatever share you buy, either the share of
Asian or tata motors or ITC, whatever share
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you can buy.
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When we talk about commodities, you are reading
inside the commodity market.
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I said you trade in two ways.
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One you trade in a futures contract which
we call futures trading.
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The second is called option trading.
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This happens inside two segments, one is Non-Agri
commodities, and one is Agri commodities.
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Non-Agri and Agri, first of all, understand
the meaning of commodities.
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Commodity means anything which we get from
mother earth which nature gives us which we
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cannot make ourselves.
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We cannot make gold by sitting in
the home.
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The earth will give you gold, so if we are
getting anything from nature, then it is a
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commodity.
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Now we have Non-Agri which is not Agri, which
is not farming.
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If the thing which is cultivated, then it
is Agri, so Non-Agri which is not cultivated.
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There are three segments in this.
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The first segment is energy.
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Now let me tell you what we talk about inside
it, Non-Agri and Agri.
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There is 88% inside the Non-Agri market and
there is only 12% trading in the Agri market.
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Now, when we buy stocks then you buy products
through any exchange, such as BSE and NSE,
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then you can trade inside BSE and NSE.
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Similarly, commodity trading happens on basically
two exchanges.
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The exchange of Non-Agri Commodity Exchange
is MCX, Multi Commodity Exchange and The exchange
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of Agri Commodities is NCDEX, National Commodity
Derivatives Exchange, so here 12 percent of
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the volume is coming, it is coming of Agri
Commodities and 88% trading is happening in
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Non-Agri Commodities.
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First let me tell you the segment inside Not
Agri trading, After that, I will tell you
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which trading is happening.
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When we talk about energy, inside energy,
crude oil, natural gas and coal.
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If we talk about base metals, there are multiple
metals, then copper aluminium zinc is included
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and there are gold, silver
and Platinum included in precious metals.
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Out Of these, the highest volume of trading
comes in crude oil in copper and silver and gold
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Most of these are traded.
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Now some people say when you are trading
in the commodity market, then you have already
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understood futures and options in the stock
market, then you trade in the lot, similarly,
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there are lots there, for example, there are
lots in crude oil and also Gold has lots.
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Now one lot of gold is one kg.
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For this, when you talk about 1kg.
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On today's date, you say that today the gold
rate is 50000 of 10 grams.
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Then 1kg gold is worth ₹ 5000000, then if
you are trading in gold, you get margins,
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people say that it needs a lot of investment
If we do commodity trading.
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We have to invest a lot of capital.
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But let me also tell you that if you talk
about contracts inside it, then there are
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multiple contacts inside gold as well.
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There is gold Ginni, there is gold petal then
you can trade multiple contracts inside the gold
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You have to understand that when you are trading
different commodities, there are different
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margin requirements, they have different prices
in it, then I will show you on the screen
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that approximately you will have requirements
of different margins in different commodities,
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your broker gives you margin, we will talk
about margins.
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There are wheat, soybean, chana and sugar,
black paper and rubber inside Agri commodities,
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there is trading on them, so when we talk
about all agricultural commodities, then all
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does not Trade, basically which derive the
Market, they traded.
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Now, what is the meaning of the margin I talked
about?
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As an example, you have to trade of ₹ 100000,
but you don't have ₹ 100000, then your broker,
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As an example, you have an account of upstox,
they give you margin.
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It means that you have to trade for rupees
one lakh, profit should be on rupees one lakh,
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but we have only rupees twenty thousand.
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So, can we trade rupees one lakh with rupees
twenty thousand? yes
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Now, why should we trade in the commodity
market, then I am giving you the answer?
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When we talk about the stock market.
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That's why I am giving you the answer.
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I will tell you this, your stock market is
open from 9:15 to 3:30.
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But the commodity market is open from 9:00
am to 11:30 pm, so I will give you a real
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example.
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Just some time ago I went to get a mobile
phone for my wife, so I took it from Croma.
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As you all know Croma, there was an employee
there.
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He already knew me, so he said that I saw
many videos in your stock market.
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But I am not able to trade in the market.
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Its reason is that this is the timing of my
job, so I am free around 5:00 in the evening,
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so I can not give my time because the timings
of the market and timings of my job do not match
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I can't do it, so can we trade in the commodity
market?
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The answer is yes, you can do it Because it
is open till 11:30 in the night then it is
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open till 11:30, we will also talk about it
and the other thing I am telling you is why
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you should do trade, the other thing that
comes.
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Many people are taking trading as their career
and profession, then people are earning genuinely
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regular income from trading in general and
if you are doing technical analysis already,
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I have made a playlist on that.
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I'll give you its link on the i-button.
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If you start understanding technical analysis
then the best you can do is to test your understanding
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and your knowledge then you can do that inside
the commodity market because technical analysis
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works very well.
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Whatever the prices of the commodity, they
depend on the international market.
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Global factors can change the prices of the
commodity market.
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For example, when the lockdown was imposed,
you saw that crude oil went negative.
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Can you think in the negative, it was in the
negative ₹ 40 Per barrel, so we all have
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faced this.
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This has never happened before in life.
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This happened for the first time in the lockdown,
so commodity prices depend heavily on global factors.
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Now if elections are held inside the US, then
the prices of commodities change profit
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and loss can both be very high.
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You cannot even think.
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First, you get the margins within the commodity
market.
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Secondly, when there are price fluctuations
it is extreme, so it is a little bit different
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from the stock market and I would say that
if you want to test your technical analysis
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and even if you do paper trade, you don't
do real trading, you can learn more about
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commodity trading and spend time on it and
you will get to know how it works.
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Because technical people do a lot of work
here, so right now I just have to tell because
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if I will give you more knowledge inside this
video, you will get confused.
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So this is enough for you to know so far.
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Now you can have many, many questions.
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For that, we will try to make separate videos,
so ask your questions by commenting, second
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if you do not have your demat trading account
yet, then in the description and comment box,
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I will put the link of leading brokers like
Upstox, Angle one and 5Paisa.
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You can open your Demat and trading account
here for free by going anywhere.
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The second thing you have to get the segment
of MCX turned on.
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It does not on by default then you can also
talk to customer care.
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And, when you will open your account, then
at that time there is a need for the necessary documentation
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If you want to trade on MCX then let me tell
you its biggest requirement.
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That is if you upload your bank statement,
then you should have a minimum balance of 10,000 in it.
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Most people inside India trade in cash.
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They do not maintain bank balance, they upload
their bank statement and if they don't have
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a balance of 10000, their application gets
rejected.
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They have to provide their bank statement,
you can put your salary slip for your income
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proof also there so you have to do this if
you want to activate on MCX, and again you
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have any questions you can talk to customer
care with brokers.
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Finally, you ask your questions in comments.
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If you liked this video then like it and share
it so that people get to know the right information
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and if you are first time on this channel
then subscribe to
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If you are watching this on Facebook then
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I will see you in the next video till the
time you go self-made.
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