What are the reasons for the failure in the commodity market to beginners? Mostly the beginners enter into the commodity trading market with the unrealistic dream to become rich overnight. They grab information from random groups on Whats App and telegram channel and they feel ready to go.
They with limited knowledge to start the trade in the commodity market and soon they know that they have lost a big chunk of their capital. The reason for the loss is that they trade in the same old style of trading and keep facing the nonstop loss.
Within the month they realize they have lost complete capital which is being invested resulting in frustration and regret for investment. Now their only aims remain to recover the lost capital amount.
Still not losing the hope the beginner again put their hard-earned savings into the trading account with the hope that this time they will be able to predict the market. But the markets always moving with ups and downs and against many surprises, where the traders face again the loss resulting in frustration, gone peace of mind, change in personality, increase debt. The loss makes blind and hinders the ability to think rationally.
These things happen to the new traders and nobody feels the need to introspect what gone wrong. Nobody ever gives a thought about who is earning from this market and how they are earning.
What are the reasons behind the loss of commodity trading?
What is the basic need to become a commodity trader? Trading is all about becoming a good man and a good or perfect man does not have greed. He takes the decisions with maturity and seeks the truth instead of following other opinions, he is calm, disciplined, and follows some principals.
If you try to become the same, you will be a successful trader. This is the common human nature where you cannot complain that the market is unpredictable, rather develop the strategy for an unpredictable market.
The second most common reason for the failure in commodity trading is the lack of knowledge. The knowledge of commodity trading does not come frequently joining groups or meeting trading people. To get the good earns people do studies for many years. Earning 50000 per day does not come with one day’s work. If you are waiting for the complete month doing your work and getting a salary, this is also the same for trading, patience, and good knowledge helps to earn good output.
The best is to remain aware of complete stock market news, spend some time understand the basic of the commodity market, they to be familiar with the price movement patterns of the commodities. Therefore, go with few commodities and become master rather of trying luck in every commodity.
The third and the common reason for the failure in commodity trading is lack of strategy. Mostly the new trader’s login into their trading platform once in the day and take their trade based on the very first tip received in any random WhatsApp or telegram group. They have no strategy or plan of trading. They trade just randomly and suffer from consequences. Lack of planning is also a big reason for continuous losses.
What is the strategy to be used?
The nature of commodity prices makes it difficult or everyone to predict its future prices. As the commodities are not like stock which grows with time. Commodity prices are governed by international politics and global business and trade.
The best is to go with long term strategy which works in all market conditions, on which you can rely on. So, focus on small which is realistic and achievable and win the game of commodity trading.