How to Trade Gold, Oil & Gas- Systematic Commodity Trading Strategy with Prithvi Khithani

Prithvi, a 28-year-old commodity trader from Mumbai, shares his systematic trading approach for making money in commodities. He has been in the market for five years and has learned the importance of staying in the game and not losing all of one's money. Prithvi uses a setup that includes the Relative Strength Index (RSI), Exponential Moving Average (EMA), and Average True Range (ATR) indicators to catch trends, determine the direction of trades, and adjust volatility, respectively. He emphasizes the importance of risk management, including having a logical system, not losing too much money on losing trades, and holding onto profits for the long term.

Prithvi Khithani emphasizes that his edge in trading is not the setup but rather his risk management, money management, and psychology. Khithani explains that the setup works only 35-40% of the time, and the rest of the time, traders have to survive the learning curve. He discusses his experiences with crude oil and IRCTC, where he made and lost money, and how he managed to keep going despite the setbacks. Khithani stresses the importance of protecting capital during the learning curve and managing risk in every trade. He believes that his lack of responsibilities and strong family support have helped him survive the learning curve and protect his capital. Khithani then talks about his systematic trading strategy, which is based on the Relative Strength Index (RSI) as a momentum indicator, and his decision to switch from discretionary to systematic trading.

Prithvi discusses his trading strategy and risk management techniques using the example of gold. He explains that traders with a high risk tolerance may not use the 200 Exponential Moving Average (EMA), while those who prefer a calmer mindset can use it to filter trades. Prithvi shares his personal experience of using the Average True Range (ATR) as a risk tool to decide between trading in the main or mini lot size based on his risk management. He also mentions the lack of mini contracts in Indian equity markets and the importance of managing risk over following a specific strategy. Prithvi answers a question about trading only in the evening hours and suggests that a backtest is necessary to determine its feasibility. He concludes by discussing the importance of diversification and having a cushion capital for mark-to-market purposes.