Welcome to Contact India Commodities (P) Ltd.

Life jacket for futures trading

These lifejacket rules are common knowledge, but people fail to apply. Whether you sink or prosper depends on your application of these rules

Many futures traders trade without a plan. They do not define specific risk and profit objectives before trading.
Even if they establish a plan, they don't stick to it, particularly if the trade is a loss. Consequently, they overtrade, which puts them in a squeeze and forces them to liquidate positions. Somehow they liquidate the good trades and keep the bad ones.
After several profitable trades, many speculators become wild and give up caution and good sense. Based on hunches and long shots, rather than sound fundamental and technical reasoning, they put large sums into one deal that "can't fail."
Traders often try to carry too big a position with too little capital, and trade too frequently for the size of the account.
Some traders try to "beat the market" by day-trading.
They fail to pre-define risk by not using the “stop loss” option.
They frequently have a bias: Bullish or Bearish.
Avoid ego trips. Learn to take sound advice.
Taking too big a risk with too little profit potential is a sure way to losses.
Traders tend to become emotionally and/or financially committed to one trade.
Many traders can't take the small losses. They often carry on with a losing trade until it gets really bad, then take the loss. Cardinal rule to be followed: "Cut losses short. Let profits run."
Trade with your head instead of your heart.
Follow a disciplined trading program. It avoids large losses.
Speculators allow emotions to overcome intelligence when markets are going for them or against them. A good plan must include stop loss points.
Often, traders jump into a market based on a story in the morning paper: the market many times has already discounted the information.
Read the product note to understand the commodity and the price impacting parameters. Check websites of NCDEX & MCX.
Study Historical and Seasonal Price Movements.
Be aware of the risk associated with your positions in the market and margin calls on them.
Pay required margins in time.
Do not trade on any product without knowing the risk and rewards associated with it.

DEALING WITH BROKER:

Trade only through registered members or their franchisee.
Insist on filling up a KNOW YOUR CLIENT (KYC) Form and on getting a Client ID.
Insist on reading and signing a “Risk Disclosure Agreement”
State clearly who will be placing orders on your behalf.
Re-confirm high value orders placed over phone.
Obtain & check contract note issued by the members or its authorized persons for every trade executed.
Ensure that the Contract Note contains all the relevant information such as Member Registration Number, Order Date, Order time, Trade No. Trade Rate, Quantity, Arbitration Clause.
Insist on bill for every settlement.
Insist on periodical statement of your ledger account.

Do not deal with unregistered intermediaries.
Do not undertake off-market transactions in commodities.

Futures		Futures
Spot		Spot