What are the advantages of trading in Multi Commodity Exchange?

To trade in commodities prior knowledge about market is required.Traders can not become a successful commodity trader by having vague market knowledge.Investment in commodities are believed to be a hedge against inflation which indicates that commodities can be held for longer duration of time.MCX is a emerging exchange of Indian commodity market and it is preferred by large umber of traders.People likes to trade in all sorts of commodities like zinc,nickel,copper,gold as they are of highly liquid nature. Services like mcx tips are often used to trade in a secured manner and earn desired returns.

MCX trading can be more profitable if traders are well aware of the market facts and plan a wise strategy.It has several benefits and few of them are discussed below:

1.Liquidity-

Trading in metals offers high liquidity, traders can easily buy, sell and also liquidate position whenever required.Another attractive feature is that profit from a trade can be used elsewhere without actually closing the position.

2.Less manipulation-

Price manipulation in commodities like gold, silver, crude oil is less as they are governed by international price movements. Therefore prices of these commodities are less prone to manipulation.

3.Leverage-

On mcx, trading in commodity futures is done on margins. Traders only need to pay a fraction of the value of contract.This offers greater leverage to traders.Also margin in commodity futures is less then stock futures.

4.Protection against inflation-

Changes in macro economic factors impact commodities differently as compared to other financial products.Trading in commodity futures helps to buy or sell at a pre decided price.When economy is dipping prices of commodities are likely to rise. At such times having some commodities as a part of your portfolio is beneficial.

5.A safe refuge at times of financial crisis-

Some investors do not feel safe to invest in commodities.Precious metals like gold, platinum offers protection during inflation and also helps in fulfilling your financial commitment at tough times. MCX trading is mostly preferred by traders because of the above discussed advantages.Trading in commodities is similar to trading in stocks and both markets are volatile and risky. Therefore it is always advisable to learn about market and all its related terminologies before beginning to trade.Especially in commodity market a very good research work is required. If you lack in sufficient market knowledge or do not have time to devote in market then financial advisory services like mcx market tips, currency tips can be helpful as they are suggested by market experts after performing quality research work.A right trading strategy is key to succeed by earning good returns in commodity market.Fully understand the strategy which you are using and have a pre plan of what to do if market shows some unexpected behavior.

I am a financial analyst. I always like to read and explore more about market.