THE UGANDA COMMODITIES MARKET

Making money in the Uganda commodities market is not easy. About ninety percent of commodities traders lose money rather than make it. One reason why commodities trading in Uganda is difficult is because there is no right time of when to enter or exit the market (i.e. you cannot time the market). But it’s never late to try out re-engineered approaches to winning in the Uganda commodities market. For starters, it is crucial that you understand the market. You must also learn how economics can affect prices of commodities. There are many ways to invest in commodities, including the futures market, buying the actual commodities (gold and silver are examples of easy-to-store commodities), Commodity ETFs (exchange traded funds) and stocks whose business model involve commodities. This article will focus mainly on the commodities futures market. You must decide what futures contracts you want to buy, study the charts very carefully and develop your trading strategy.

Develop a well balanced commodities portfolio.

Don’t try this if you are a novice or don’t have a lot of money to work this. Buying commodities in Uganda is extremely risky, therefore you will need to make sure you are willing to take the risk. If you want to be a successful commodities trader, in places like Uganda, you will need to have a balanced allocation of your finances to differing commodities. For example, have a certain portion allocated in precious metals, another in energy, and maybe another portion in agriculture. This way you will be playing your game like a professional and hedging your bets so that if one sector is not performing well, another sector or two will make up all or half of the total loss.

Test your trading strategy by executing paper trades.

 This should follow a lot of time spent in studying the charts. You will have created a trading system, which includes your entry and exit signals. But since you haven’t tested it in the marketplace, there will be need to know how your strategy will fare in the market, before you risk your capital. Take advantage of paper trades and learn more about your system’s strengths and weaknesses. This way you will be able to see where you would have made money if at all you had thrown in your bet. However the efforts now should be centered on areas where you would have lost. In unpredictable markets like Uganda, knowing or having expert knowledge and ability to spot a possible loss is a lot more valuable than spotting a possible win. If there is any invisible hand trying to steer the economics other than the forces of demand and supply, such knowledge and expertise will help you get out of the net easily.

Learn trading strategies from successful futures traders.

As an investor you need to be very rational, in all your strategies. Trading in the Uganda commodities market is very subjective, in that what one trader capitalizes on does not necessarily work for another trader. Hence it’s good to read how traders develop and trade their strategies. Learn how their systems made them money. Then with a rational mind incorporate some of their trading ideas into your own system.  

Consider hiring a professional commodities trading advisory firm. A good number of these firms exist in Uganda hence you need to make sure you do some good research on them before you hire one. There are several goods in taking this route, for example you don’t have to invest a lot of your money in differing commodities. These firms will help you spot the best market and then throw in just enough with out having to consider hedging by investing in other sectors too. Besides that these firms also can also negotiate for lower commissions on return than if you were to buy futures contracts on your own. The professional commodities trading advisory firm’s funds investment management team is more apt to pick commodities that will make you money. The team also has a large pool of money to work with, hence they can buy more futures contracts and if such an investment fund makes a hefty profit, you will benefit as well.

Do not buy the hype.

To make money simply buy low and sell high. As a trader you should not get over excited when the prices go up, and scared when they go down. If you buy the hype you will end up buying high and selling low. That is a loss

Study the prospectus

 In finance, a prospectus is a disclosure document that describes a financial security for potential buyers. Before you buy shares into futures funds you need to study this document carefully. Remember history does not count in commodities markets. A given futures fund’s good performance last year does not guarantee another good performance this year.

Study both the fundamental and technical analysis.

Make sure you understand both concepts really well before investing significant amounts of money in commodities markets in Uganda. If you are not sure of the bet then a small stake would be better and then raise it with experience gained.