How I Made 80% in less than 6 Months Trading Commodities
So in the last Financial Year, I took a challenge where my goal was to trade with smaller capital and trade systematically and produce the best possible results. I opened a new account with Zerodha for Commodity Trading. So, I started with a standard capital of Rs. 5 Lac. Since I was starting slightly late in the year in October, I had only 5 and a half months to see how much I can grow my account. Commodity Trading in India hasn't really picked up with smaller retail traders with most of them still trading Stocks, Indices, and their Futures and Options.
These were the results:
Starting Capital: Rs. 5 Lac
Gross Profit: Rs. 4.99 Lac
Net Profit: Rs. 3.96 Lac
Net profit percentage: 79.2%
Here is the video of the P&L:
Here are some highlights:
No. Of Winning Contracts: 32
No. Of Losing Contracts: 22
Winning/Losing Ratio: 59.26%
So, we can see, even with a win ratio of less than 60%, I was able to generate 80% returns in less than 6 months. The important point here is to keep the losses in check. The profits will certainly roll in.
Below is the distribution of the profit. As you can see, when I lost, I lost small, but the wins were bigger. Almost 50% of the trades were in the -20K to +20K range which meant, either I got my stop loss hit or I made a small profit. The biggest difference is when I had 12 wins between 20K and 40K. These are trades where I booked at least 1:2. So, now you know, it is not the super-big wins, but the consistent good-sized wins that made the difference in my P&L.
Mistakes I made: Over-Traded a few times, but I have nothing to blame here since the market was very volatile. I paid almost 20% of my profits on charges such as CTT, Brokerage, Stamp Duty, etc. Ideally, I like to keep these charges below 10%. All my trades were on MCX and I traded only internationally linked non-agro commodities.
Things I did right: Followed my system, was disciplined, got out of trades when my stop loss was hit, traded with a calm mind at most times despite heavy volatility.
I've put the results in several images and videos which may help fellow traders. I personally prefer Commodity Trading over Equity. I've highlighted why in this article I wrote some time ago. Most people wonder how to trade commodities in India but never really explore if it is worth taking up.