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How to do a proper research and trade in commodities in India

05 Jan 2023

For any interested trader, the answer to the question of how to trade commodities begins with research. Blindly going in and getting started with trading is not the ideal way to go about trading in commodities. You need to perform a fair bit of commodities research beforehand.

Wondering what resources you can use for this purpose? Here are some ideas you could find useful.

1. Read about commodity profiles

A commodity profile gives you all the fundamental information that you need to know about the assets you’re interested in. This essentially includes data like the exchanges on which the commodity trades, the kind of derivatives it has, the lot sizes, the liquidity, the contracts available, and other such details. Commodity profiles form an important part of commodity research, and it sets the stage for you to learn more about these assets.

2. Check out the news about the commodities market

Once you’ve gotten a good understanding of the commodity profiles, it’s time to take a look at the news surrounding the commodities you’re interested in. Everyday, a great many number of incidents and events could impact the prices of the commodities trading in the market. Keeping yourself updated about these developments can help you plan and execute your trades accordingly. Today, there are many websites that give you regular and timely updates on how the commodities market is moving.

3. Take a look at research reports

When you research commodities, it is also important to look into what the research reports say. The data and information in this may often be too technical and overwhelming if you’re a beginner. So, you can always take it slow and get acquainted with commodity research reports in small doses. And with time, you’ll get better at understanding these reports. Keep in mind though, that while expert research is a good benchmark, it is important to also do your own research.

4. Consider the technical aspects

You also need to take a look at historical price movements and other technical aspects as a part of getting better at commodity trading. There are many online resources that can help you with the necessary data - both in the form of charts and in the form of numbers. Make sure you factor in these technical considerations too, as a part of the research. 


So, with these basic steps, you can learn all the things you need to know before you start trading in commodities. Make sure you take the help of experts wherever you have trouble understanding something. It is always better to be prepared before you start trading.

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