Finminutes Commodity Masterclass 6: Trading Guide

Professional Edge: The Trading Guide

Welcome to the final frontier, the trading guide. If you are reading this, you have likely survived the “Casino Phase.” You’ve learned that leverage is a double-edged sword, that news events can wreck technicals, and that “hope” is not a strategy.

Modules 1 through 5 were about Skill. Module 6 is a trading guide about Survival.

In 2026, the Indian Commodity market is not what it used to be. Inflation hasn’t just hit your grocery bill; it has hit the MCX. The days of trading gold for ₹20,000 are dead. Silver is no longer a “poor man’s gold, it’s a rich man’s game.

But don’t worry. This trading guide module is your survival kit. We are going to decode the new asset classes (hello, BULLDEX), break down the boring-but-critical tax laws that can save you lakhs, and show you how to automate your trading so you don’t have to stare at a screen for 14 hours a day.

Let’s get to work.

The Asset Reality: “Mini” is the New “Mega”

A few years ago, a college student could trade Gold Mini with pocket money. Today, with Gold touching ₹1.42 Lakh per 10 grams, the “Mini” lot is a beast worth ₹14 Lakhs.

The Inflation Trap

Many beginners open a demat account, deposit ₹50,000, and try to buy a Silver Mini lot. The order gets rejected. They are confused.

• The Reality: Silver at ₹3 Lakh/kg means a 5kg Mini lot is worth ₹15 Lakhs. The margin alone is nearly ₹2.7 Lakhs.
• The Survivor’s Move: You must migrate down. If you used to trade Gold Mini, move to Silver Micro. If you used to trade Silver Micro, you might need to look at Options.

The New King: Silver Micro (1kg)

This is currently the most popular contract for retail traders, but be warned: it’s not “cheap” anymore.

• Contract Value: ~₹3 Lakhs.
• Margin: ~₹52,000.
• Why it’s tricky: During super-rallies (like we saw in late 2025), MCX slaps on an Additional Surveillance Margin (ASM). Your required margin can jump from ₹50k to ₹65k overnight.
• Rule: Always keep 20% extra cash in your broker account. If you trade with exact margin, a single volatile candle will trigger a margin call and auto-square off your position at the worst possible price.

MCX Exchange BULLDEX Trading Guide

When Gold and Silver became too expensive, the MCX exchange threw retail traders a lifeline: MCX BULLDEX (bullion index or MCX iCOMDEX Bullion). Think of BULLDEX as the “Nifty” of Commodities. It’s an index. It doesn’t track one metal; it tracks a weighted basket of Gold (70%) and Silver (30%).

Why Trade BULLDEX?

1. Smoother Moves: Silver is wild. Gold is stubborn. BULLDEX is the average of both. It trends beautifully without the jagged “wicks” that hunt stop losses in pure Silver.
2. Cash Settled: This is huge. If you hold a Gold Future to expiry, you must take delivery of 1kg of Gold or pay a penalty. BULLDEX has No Delivery. It settles in cash like Nifty. You can hold it till 11:30 PM on expiry day without worry.
3. The Options Edge: BULLDEX Options are liquid and affordable. An At-The-Money (ATM) option might cost you ₹20,000, perfect for a small account looking to catch a trend.

Taxation: The “Business” of Trading

Let’s clear up a massive myth: Commodity trading is NOT gambling. According to the Income Tax Department, it is a legitimate business.

Section 43(5): The Golden Rule

Income Tax Act Section 43(5) classifies F&O trading as Non-Speculative Business Income. Why should you care?

• Speculative (Intraday Equity): Losses cannot be set off against other income.
• Non-Speculative (F&O): Losses can be set off against other business profits (like rental income or freelance work).

The “Turnover” Nightmare

This is where 90% of traders get a notice. You deposited ₹1 Lakh. You bought and sold for a ₹2,000 profit. What is your turnover?

• You think: ₹2,000.
• Taxman thinks: It depends.

The ICAI Calculation Method: Turnover is the Sum of Absolute Profit and Absolute Loss.

• Trade A: +₹50,000 Profit.
• Trade B: -₹40,000 Loss.
• Net P&L: +₹10,000.
• Turnover: ₹50k + ₹40k = ₹90,000.

Why it matters: If your calculated turnover crosses ₹10 Crores, you legally need a Chartered Accountant (CA) to audit your books.

Pro Tip: Even if your turnover is low, if you declare a Loss and want to carry it forward to save tax in future profitable years, you often need an audit (unless you opt out of the presumptive scheme correctly). Always hire a CA if you have losses.

The Algo Bridge Trading Guide: Automating Your Edge

You have a job. You have a family. You cannot stare at a 5-minute Crude Oil chart for 6 hours waiting for a crossover. This is why you need an Algo. Wait, don’t panic. You don’t need to learn Python.

The “No-Code” Revolution

In 2026, we use “Middleman” apps (Bridges) to connect your chart to your broker.

• The Chart: TradingView. (This is the brain).
• The Broker: Zerodha / Angel / Dhan. (This is the wallet).
• The Bridge: NextLevelBot / Streak / AlgoTest. (This is the messenger).

The Setup in Plain English

1. The Trigger: You set an alert on TradingView. “Hey, if RSI goes above 70, scream.”
2. The Webhook: Instead of screaming sound, TradingView sends a secret text message (Webhook) to your Bridge.
3. The Execution: The Bridge reads the message “Buy Crude Oil” and instantly presses the buy button on your Zerodha account via API.

Why do this?

• Speed: It executes in 100 milliseconds. You take 5 seconds. In a crude oil inventory spike, that 5 seconds is ₹5,000.
• Emotionless: The bot doesn’t hesitate. It triggers the stop loss when the logic dictates. It doesn’t “hope” the market will turn back.

The “Low Capital” Survival Guide

I get asked this every day: “Sir, I have ₹20,000. How do I become a millionaire?” The harsh truth? You probably won’t. But you can build a skill. If you have less than ₹50,000, Futures are forbidden fruit. You cannot afford the margin. You are forced into Options.

The Crude Oil “6 PM” Strategy

This is the only viable strategy for small accounts.

• Why Crude? It is the most liquid asset on earth.
• Why 6 PM? That’s when the US markets open. Volume explodes.
• The Method:
  1. Do not trade in the morning.
  2. At 6:00 PM, sit down.
  3. Wait for a clear breakout on the 15-minute chart.
  4. Buy an At-The-Money (ATM) Call or Put.
  5. Strict Rule: If the trade goes against you by 10 points, CUT IT. Do not average. Options decay (lose value) every minute you hold them.

The Debit Spread (The Smart Way)

Buying options is risky. If the market stays flat, you lose money. The Solution: The Debit Spread.

• Buy the ₹6000 Call (Cost ₹100).
• Sell the ₹6100 Call (Collect ₹60).
• Net Cost: ₹40.
• Magic: Because you sold a higher option, time decay hurts you less. You have lowered your cost and increased your probability of profit. This is how professionals trade small accounts.

The Roadmap: Where Do You Stand?

Trading is a journey, not a lottery ticket. Identify your stage and stick to the rules.

Stage 1: The Survivor (Months 1-6)

• Capital: < ₹1 Lakh.
• Goal: Protect capital. Don’t lose more than 10%.
• Assets: Crude Oil Options, BULLDEX Options.
• Focus: Learning to take a loss without getting angry.

Stage 2: The Grinder (Months 6-18)

• Capital: ₹2 Lakh – ₹5 Lakh.
• Goal: Monthly income. Green P&L.
• Assets: Silver Micro Futures, Natural Gas Spreads.
• Focus: Systematizing your entries. Journaling every trade.

Stage 3: The Professional (Year 2+)

• Capital: > ₹10 Lakh.
• Goal: Wealth compounding.
• Assets: Gold Mini, Arbitrage Strategies, Automated Algos.
• Focus: Psychology and Tax Optimisation.

Final Words

You now have the complete blueprint. You know the Assets (Module 6). You have the Strategies (Module 5). You have the Technical Skills (Module 4). You understand the Fundamentals (Module 3).

The only variable left is you. The market will test you. It will try to make you greedy. It will try to make you fearful. Trust your system. Trust your risk management. And never, ever stop learning. Check MCX Exchange for the latest updates and price fluctuations.

See you on the leaderboard.

Actionable Next Steps:

1. Check Your Capital: Look at the Asset Cheat Sheet in the tool above. Are you under-capitalized for your chosen asset? If yes, switch assets immediately.
2. Download Your Ledger: Start your Excel journal today.
3. Talk to a CA: If you have been trading for a year, get your turnover checked before the tax deadline.