How to trade Commodities - Gold, Silver, Crude Oil, Natural Gas

[myamit]

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Hello Kamlesh,

See attached chart. Now is this a tradable WW. Volume confirmation is also present. Please advice.

Regards,

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[timepass]

yes they include the spread and swap costs.....

But sometimes the swap is shown as zero and the profit shown is directly sell minus buy. In the image shown below, check the last entry ... "Sold 2 lots @1.3161 and bought back at 1.3158. Profit = 60".

But first things first.. what exactly is a spread and a swap and how does it contribute to the trading costs and profits ?? I think the spread is the difference between bid and ask, but how does this thing work ??

 

[uttamkamlesh]

But sometimes the swap is shown as zero and the profit shown is directly sell minus buy. In the image shown below, check the last entry ... "Sold 2 lots @1.3161 and bought back at 1.3158. Profit = 60".

But first things first.. what exactly is a spread and a swap and how does it contribute to the trading costs and profits ?? I think the spread is the difference between bid and ask, but how does this thing work ??

Yes!...spread is the difference between Bid and Ask....that is brokers share...guaranteed to him.

Swap applies when you carry a trade overnight and there is interest rate difference....SG will be able to put expert comment...

 

[piyush08]

swap can be cost as well as profit depending on what pair you are trading and whether you are long or short..

in brief ... swap is the income one would generate by overnight borrowing in the money market of the cheaper currency and investing in the currency where mkt rates are higher for 1 day.. this figure will obviously be higher when the difference in rates is higher.. for pairs like AUDUSD, NZDUSD this figure is higher than that for EURUSD GBPUSD.. JPYUSD is close to nil as both their rates are almost similar..

im not sure abt the direction.. but on being long either you get paid or you pay and vice versa.. and this charge too only applies when positions are carried across days.. don't remember the cut-off times.. i dont think they are applicable for day trades.. so thats the explanation of swap costs..

but whatever the amount, they are very miniscule to not affect your pnl unless you are very highly leveraged.. in which case too the price movement in the outright will be magnified and matter a lot more.. so net net.. its an affect you can just ignore..

 

[uttamkamlesh]

Hello Kamlesh,

See attached chart. Now is this a tradable WW. Volume confirmation is also present. Please advice.

Regards,

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Amit, it is not tradable WW...

1. Against the TREND...daily as well as weekly...
2. Price must close below the 1-3-5 line to consider an Entry....

I am going to post Wipro chart....wait for a while...

 

[uttamkamlesh]

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[timepass]

swap can be cost as well as profit depending on what pair you are trading and whether you are long or short..

in brief ... swap is the income one would generate by overnight borrowing in the money market of the cheaper currency and investing in the currency where mkt rates are higher for 1 day.. this figure will obviously be higher when the difference in rates is higher.. for pairs like AUDUSD, NZDUSD this figure is higher than that for EURUSD GBPUSD.. JPYUSD is close to nil as both their rates are almost similar..

im not sure abt the direction.. but on being long either you get paid or you pay and vice versa.. and this charge too only applies when positions are carried across days.. don't remember the cut-off times.. i dont think they are applicable for day trades.. so thats the explanation of swap costs..

but whatever the amount, they are very miniscule to not affect your pnl unless you are very highly leveraged.. in which case too the price movement in the outright will be magnified and matter a lot more.. so net net.. its an affect you can just ignore..

Ok... so it's something like intraday and delivery. The extra margin that you use for holding a position (delivery) is charged extra, or something like that. But in the picture showing my trades, you see that the swap of 1.58 isn't calculated at all in the profit calculation

 

[piyush08]

Ok... so it's something like intraday and delivery. The extra margin that you use for holding a position (delivery) is charged extra, or something like that. But in the picture showing my trades, you see that the swap of 1.58 isn't calculated at all in the profit calculation

no.. its not necessary a cost.. for each pair.. you have to pay for holding a position and you get paid for holding the opposite position.. im not sure whether you get paid for being long or short.. and that too i think varies with pairs..

most of the yen based pairs you get yield.. that is you get paid.. EURJPY GBPJPY AUDJPY NZDJPY CADJPY.. you get paid every day just for holding that position.. this is what was referred to as carry trade...

 

[uttamkamlesh]

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[piyush08]

And in general technology sector along with financials is leading the rally in US mkts.. the same should rub off on our technology stocks sooner or later..