Page 1 - MEX Express - Vol 5 Issue 4
P. 1

Mercantile Exchange Nepal Limited                                           MEX EXPRESS
         Invest - Trade - Earn                                                                         A Smart Solution for Online Trading
An ISO 9001:2008 Certified Exchange

                                                                                             Volume: 5 • Issue: 4 • Year: 2013 A.D

KYC: Corn                                                                   MEX News Portal  Market Perspective

             Page 2                                                         Page 3           Page 4

From the CEO’s Desk                                                         Small Techniques make a BIG difference!!!

                             As we bid farewell to the year 2013, and            When VIBGYOR, the perfect combination of sequential
                             likewise usher in the New Year with renewed    colors pass through prism, the white light can be seen but when
                             vigor and enthusiasm, I would like to turn     VIBGYOR passes through any ordinary glass then no effect can
                             the pages back and enlighten the ardent        be seen although small amount of energy is lost. This example is
                             readers of this edition of the MEX Express     truly fitted to daily trading in the commodity futures. Commodity
                             on the major events of the institution in the  trading has some fundamental strategies whose synergy affect may
year gone by. This reminiscence may not be as useful as a brick             increase chances of a winning trade. There are seven small but
from the Berlin Wall but just like that plain old brick’s value as a        winning techniques that can lead to profitable trade.
memorabilia; 2013 will certainly be etched in the pages of history
as the year in which MEX Nepal managed to retain the charm of its                (1) Recognizing Trend Direction, (2) Confirming Entry Point 	
glorious preceding years amidst the various challenges and obstacles             (3) Mapping Trade flow
that the market environment threw before us.
                                                                                 (4) Safeguarding Trade (5) Finding exit point (6) Calculation 	
The major challenge of the year was the migration to a new core                      of P/L and Margin (7) Refresh for reentry
online business solution i.e. a new online trading platform for the
existing clients. This task seemed tedious given the magnitude of                     (1) Recognizing Trend Direction: It is foremost part of commodity trading to know the trending direction. This will determine to go for
the assignment in front of us, but due to the perpetual co-operation                        a BUY or a SELL. If the trend is an upward direction then the trader should go for a BUY in any downward-ditch and if the direction
from all the stakeholders involved, I am glad to say the migration                          of trend is downward then the trader should go for a SELL with opportunity of any upward-crest. To know the trend, a lot of
was smooth for all the parties involved. The need of a new platform                         technical indicators can be used like CCI, Average Directional Movement Index, Moving average etc. Brief knowledge of any trend
was driven by the investors themselves and I am glad to say that the                        line indicator is required. It must be noted that while recognizing the Trend, one should keep on watching macro-economic events
traders have embraced the new console with open arms.                                       that cause market movements because reversal of trend can be seen at any point of time due to strong or weak economic event.

MEX Nepal had added another feather in its long list of                               (2) Confirming Entry Point: Once the Trend is identified then the next step is to confirm the price at which the trade can be initiated
accomplishments by becoming the first commodity exchange to be                              and should be marked properly without any confusion. It’s not always psychologically easy to find the entry point of trade but it’s
nominated amongst the top 5 for the FNCCI Award for National                                not tough to get too. Various methods can be used to uphold for Trade Entry Point like Candlestick Patterns, Volume, and Fibonacci
Excellence, i.e. the apex award, and the FNCCI Award for Services                           etc but at the same time, Bounces, Break out, Continuation or Reversal pattern can help the traders to locate the Entry Point during
Excellence, in the medium category in the FNCCI National                                    analysis.
Excellence Awards-2070. This enormous feat is the concentrated
effort of all the stakeholders involved and will certainly place the                  (3) Mapping Trade flow: After entry into a trade, the trader should map the trade continuation that how long they can stick with time
commodity market in general on the roadmap for enhanced interest                            of profit & time of loss. Simply, a trader should have exact preplanned trading flow strategies to avoid any dilemma and Mapping of
amongst the contemporary investors.                                                         trade flow should be pre-information based and practical. It can be traced by copious technical tools like Price Movement, Support
                                                                                            & Resistance, Day range identification etc. In an easy way, its surveillance time for trading till calculated price reaches. It should
A void was felt in the limited banking options that the corresponding                       be noticeable that before mapping the trade-flow, one should have idea about next coming economic news which can pull or pushes
investors had within the trading environment. Keeping this view                             the price of security with unexpected jump so economic calendar must be watched timely before making this plan.
in mind, MEX Nepal undertook an understanding with Nepal
Investment Bank Limited, thereby bringing to the forefront the                        (4) Safeguarding Trade: This is an imperative step in the process of trading to protect the trade with the help of features availability
third banking partner affiliated with us. With this understanding,                          and suitability e.g. Take Profit, Stop Loss, Buy Limit or Sell Limit. Trader should try to maximize profit when they are in winning
investors have increased their options in selecting the bank of their                       situation but it is state of mind of novice trader that when they are in small profit, they used to close position and try to be out of
choice while trading within the system.                                                     the trading session and while they are in loss then they used to keep on waiting for reversal. This is nothing but only a trade fear in
                                                                                            the mindset and it should be avoided as much as possible.
As I conclude this message, I am looking at the sun beaming through
                                                                                      (5) Finding exit point: This is last step to trading methodology which lets the trader find the exit point of running trade. Trader is
                                                                                            exclusively decision maker here when to close position regardless of winning trade or losing trade. Trade exit point can be decided
                                                                                            with study of Support & Resistance level, Candlesticks patterns, Pivot Points, Day High & Low level etc. It should be set before
                                                                                            starting the trade and must be more than total commission paid and spread loss but if luck favors strongly then let the profit run till
                                                                                            next decided exit point as per the situation. Let’s try to take maximum possible tick to add in the profit sum.

                                                                                      (6) Calculation of P/L and Margin: This is the step to know the strength of a successful or a failure trade during a trading session.
                                                                                            Profit or deficit in account is calculated and accordingly needs to be adjusted margin amount. If equity is surplus then margin/risk
                                                                                            ratio can be increased in the next coming trades and if it is in deficit then the ratio needs to be minimized.

                                                                                      (7) Refresh for Reentry: Trader should give space after each trading session because market conditions can be changed at any moment
                                                                                            as it is unpredictable most of the time that’s why a trader should always have a fresh look towards every trade regardless of the
                                                                                            excitement of winning and depression of loosing.

                                                                                           Although commodity futures trading is somewhat situational than educational in many times that’s why Mr. Jay Gould, a Speculator
                                                                                            whose success made him the ninth richest American in history told that “No man can control Wall Street. Wall Street is like the
                                                                                            ocean. No man can govern it. It is too vast. Wall Street is full of eddies and currents. The thing to do is to watch them, to exercise
                                                                                            a little common sense, and … to come out on top.”

our windows throwing a sense of hope and belief in the ensuing

year ahead. 2014 - is certainly a year of endless opportunities, let’s

embrace it!

                     - Jitesh Surendran                                                                          Lakshman Pandit
                       CEO, MEX Nepal                                                                            Manager
                                                                                                                 Business Development
                                                                                                                 MEX Nepal

MEX EXPRESS                                                                     Page 01
   1   2   3   4