Natural Gas Trading in India – Complete Beginner to Advanced Guide (2025)

1. Introduction: Why Natural Gas Matters

Natural Gas (NG) is often called the “bridge fuel” of the 21st century. Unlike coal and oil, it burns cleaner, emits less carbon dioxide, and is easier to transport in certain forms like Liquefied Natural Gas (LNG).

For India, which is rapidly urbanizing and facing rising energy demand, natural gas has become a key ingredient in the country’s economic growth.

On the Multi Commodity Exchange (MCX), Natural Gas is one of the most actively traded energy contracts. Retail traders are drawn to it because:

• It has lower margin requirements compared to crude oil.

• It shows large intraday price swings, sometimes 3–8% in a single day.

• It provides a way to diversify beyond metals and equities.

Whether you are a student exploring commodities for the first time or a stock market trader looking to expand into energy markets, natural gas offers both opportunities and challenges.

This guide will take you step by step, from the very basics (what is natural gas?) to advanced trading strategies, risk management, and case studies.

2. What is Natural Gas?

Natural gas is a fossil fuel formed over millions of years from the decomposition of organic matter buried deep underground.

• Composition: Mainly methane (CH₄), with small amounts of ethane, propane, butane, and other hydrocarbons.

• Properties: Colorless, odorless (a smell is added for detection), lighter than air, and highly combustible.

• Uses:

  • Electricity generation (power plants).

  • Residential heating & cooking (piped gas, LPG alternative).

  • Industrial raw material (fertilizers, petrochemicals, steel).

  • Fuel for transportation (CNG for vehicles).

India’s Rising Demand

India’s government has set a goal to raise the share of natural gas in the energy mix from ~6% (2024) to 15% by 2030. Why?

• Cleaner air in cities.

• Dependence on costly crude imports.

• Rapid expansion of City Gas Distribution (CGD) networks like Indraprastha Gas and Mahanagar Gas.

Global Production Leaders

• U.S. → Largest producer, thanks to shale gas.

• Russia → Supplies pipeline gas to Europe (though disrupted after Ukraine war).

• Qatar → Leading LNG exporter.

• Iran, Turkmenistan → Large reserves.

⚡ Unlike gold or silver (which are stored and invested in), natural gas cannot be easily stored long-term without huge infrastructure. This makes its prices more sensitive to short-term supply-demand shifts.

If you are new to commodity trading then do check this post and learn the basics of Commodity Trading in India: A Beginner’s Guide to Earning from Gold, Oil & More

3. Natural Gas Benchmarks Around the World

Just like crude oil has Brent and WTI benchmarks, natural gas also has global pricing hubs:

On MCX, natural gas contracts are linked to Henry Hub prices, adjusted for USD/INR exchange rates.

4. Natural Gas Trading on MCX: Basics

Natural gas is traded on the Multi Commodity Exchange (MCX) through futures and options contracts.

MCX Natural Gas Futures Contract Specs (2025):

• Trading Unit: 1,250 MMBtu (Million British Thermal Units).

• Tick Size: ₹0.10.

• Lot Size: 1 lot = 1,250 MMBtu.

• Contract Value: If NG = ₹200 → 200 × 1,250 = ₹2,50,000.

• Margin Requirement: ~10–12% ≈ ₹25,000–₹30,000.

• Trading Hours: 9:00 AM – 11:30/11:55 PM (Mon–Fri).

• Expiry: Last working day of each month.

• Options: Available on futures, providing lower-risk entry for beginners.

Why It’s Good for Beginners

Compared to crude oil (where even a mini lot requires ~₹13,000–15,000 margin), natural gas gives traders a chance to participate in the energy markets at affordable levels while still benefiting from strong volatility.

5. Why Trade Natural Gas?

Let’s look at reasons why retail traders in India are attracted to NG contracts:

1. High Volatility = High Opportunity

   • Prices can swing ₹10–15 (5–8%) in a day.

   • Great for intraday and short-term trading.

2. Lower Margin vs Crude Oil

   • Easier for beginners with small capital.

3. Diversification

   • Adds exposure beyond equities, gold, and crude oil.

4. Global Relevance

   • Gives Indian traders exposure to global energy trends like LNG, weather shocks, or wars.

 

6. Example: Natural Gas Trade Calculation

Suppose NG = ₹200 per MMBtu.

• 1 Lot = 1,250 MMBtu.

• Contract Value = 200 × 1,250 = ₹2,50,000.

• Margin = 12% → ~₹30,000.

Trade 1 (Profit):

• Buy at ₹200.

• Sell at ₹205.

• Profit = (205 – 200) × 1,250 = ₹6,250.

Trade 2 (Loss):

• Buy at ₹200.

• Price falls to ₹195.

• Loss = (200 – 195) × 1,250 = ₹6,250.

⚠️ Notice how a ₹5 move can double or wipe out your margin. That’s the power — and danger — of leverage in NG trading.

7. India’s Role in Global Natural Gas Market

India is not a major producer but is among the fastest-growing consumers of natural gas.

• Imports ~50% of its NG demand, mainly via LNG (Qatar, U.S., Australia).

• Building more LNG terminals and pipelines.

• Domestic production is rising from ONGC, Reliance, and others, but still not enough.

This dependence on imports means global LNG prices and shipping disruptions directly affect MCX prices

8. Key Differences Between Crude Oil & Natural Gas for Traders

 

9. Summary of Part 1

By now, you should clearly understand:

• What natural gas is and why it matters.

• Its role in India’s energy future.

• The basics of MCX contracts.

• How volatility and lower margins make it attractive for traders.

• Key global benchmarks and India’s dependency on imports.

This foundation sets us up perfectly to dive into Part 2: Trading Mechanics where we’ll cover:

• How natural gas prices move.

• Major reports to track (EIA, weather forecasts).

• Step-by-step process of trading NG in India.

• Case studies of real-world market shocks.

 

1. How Natural Gas Prices Are Determined

Unlike stocks (driven by company performance), natural gas is influenced mainly by global supply-demand and external conditions.

🔑 Key Price Drivers

1. Weather & Seasons

   • Winter (Nov–Feb): Demand spikes in U.S. & Europe for heating → prices rise.

   • Summer (Jun–Sep): Demand rises in Asia (air conditioning, LNG imports).

   • Mild winters or cooler summers reduce demand → prices fall.

2. Storage Levels

   • Weekly EIA (U.S. Energy Information Administration) storage report shows gas in underground storage.

   • Low storage = bullish (shortage risk).

   • High storage = bearish (oversupply).

3. Global Production

   • U.S., Russia, and Qatar dominate supply.

   • Disruptions (hurricanes in U.S., sanctions on Russia) cause sharp moves.

4. Geopolitical Tensions

   • Example: 2022 Russia-Ukraine war → Europe faced shortage → global LNG prices tripled.

5. Correlation with Crude Oil & LNG

   • Since both are energy sources, NG often tracks crude oil moves.

   • Rising LNG demand in Asia also supports NG.

6. USD/INR Exchange Rate

   • Natural Gas is priced in USD globally.

   • A weaker rupee makes MCX NG costlier for Indian traders.

 

2. Major Reports & Data to Track

Successful NG traders always follow these:

💡 For intraday traders, the Thursday 8 PM IST EIA report is the single most important event.

3. How to Trade Natural Gas in India: Step-by-Step

Trading NG on MCX is very similar to crude oil but with some unique points.

Step 1: Open a Commodity Trading Account

• Open a Demat + Trading Account with a best commodity broker registered on MCX such as Dhan or Upstox

• Link your bank and Demat (Demat not always required for futures).

• You need:

  • PAN card

  • Aadhaar card

  • Bank account

  • Income proof (since commodities involve high risk)

Pick a broker that offers:

• Fast execution

• Low brokerage

• Good charting tools (like TradingView)

• Margin calculator

• Education material or paper trading

Some beginner-friendly brokers in India:

• Dhan – Best Overall Broker for Commodity Trading in 2025

• Why it’s #1: Zero-cost tools, deeply integrated with TradingView, free APIs, and modern UI make Dhan the top choice.

• Strengths:

  • Dedicated commodity-focused trading tools

  • Fast order execution

  • Live market scanners and strategy builder

  • Free access to advanced charts

  • Also gives Margin Trading Facility (MTF)

 

• Ideal For: Both beginner and pro traders looking for low brokerage with high-end tools.

• Deep TradingView Integration: Unlike others who offer limited TradingView functionality, Dhan lets you trade directly from TradingView charts, a game-changer for active traders.

• Custom Strategy Builder: Dhan offers an in-built visual strategy builder that requires no coding—perfect for creating and testing commodity strategies on-the-go.

• Split-second Order Execution: With latency optimized infrastructure, Dhan offers faster order placement, crucial for volatile commodity markets like Crude Oil or Gold.

• Live Market Scanners for MCX: Filter top movers, unusual volume, or high volatility commodities in real-time.

• Pre-built Commodity Dashboards: See price trends, open interest, and volume in one glance.

• Have different types of orders available such as Gtt, Limit order, Market order, Stop-loss order, forever, after market, basket order, super order and lot more.

 

Did You Know?

If you place just 50 commodity trades a month, switching from a ₹20-per-order broker to Dhan (0.03%) could save you ₹500–₹800/month, especially if your trade sizes are small.

Feature for Commodity Traders

Dhan offers specific features that matter to commodity traders:

• Margin details shown upfront

• Real-time commodity news feed

• Custom alerts for commodity price levels

• Night mode optimized for after-market MCX traders

• Auto-Detection of Candlestick Patterns on Charts on their trading platform which means charts should automatically recognize & display the names of widely known Candlestick Patterns.
• Other features like 20 Depth Data, Price Alerts, Import Watchlists, etc. you have enough data to help you with your trades.

 

Dhan mobile App have been downloaded on playstore by more than 1.5 million people with a user rating of 4.5 which also shows the trust they have created among users within small time period.

If you’re serious about commodity trading in 2025, Dhan gives you the edge with powerful tools, zero hidden costs, and blazing-fast execution. Don’t just trade—trade smart with Dhan.

Open Your Free Dhan Account Now with no AMC charges

Steps top open an account:

1. Submit PAN, Aadhaar, Bank proof

2. Enable Commodity (Derivatives) in account settings

3. Add funds and get started

Click Here to Open Your Free Dhan Account
No paperwork. No account opening charges. Get started in 5 minutes! Dhan also offers advanced tools like TradingView & Options Trader built-in.

Step 2: Add Margin Funds

• Deposit ~₹25,000–₹30,000 for 1 lot (varies daily).

Step 3: Select Instrument

• Futures: Buy/Sell contracts.

• Options: Buy Calls (bullish) / Puts (bearish).

Step 4: Place Order

• Intraday traders square off the same day.

• Swing traders may hold for a few days.

Step 5: Settlement

If held till expiry, contracts are cash-settled (no physical gas delivery for retail).

 

4. Example Trade Calculations

Suppose NG price = ₹200.

• Lot Size = 1,250 MMBtu.

• Contract Value = ₹2,50,000.

• Margin (12%) ≈ ₹30,000.

Trade A (Profit):

• Buy at ₹200.

• Price rises to ₹208.

• Profit = (208 – 200) × 1,250 = ₹10,000.

Trade B (Loss):

• Buy at ₹200.

• Price falls to ₹192.

• Loss = (200 – 192) × 1,250 = ₹10,000.

⚠️ Small moves (₹8) can mean +33% or –33% of your margin. That’s why risk management is critical.

• If held till expiry, contracts are cash-settled (no physical gas delivery for retail).

 

5. Case Study: Europe’s Gas Crisis (2021–22)

• Before the Russia-Ukraine war, Europe imported ~40% of its NG from Russia.

• When war broke out and pipelines were disrupted, Europe scrambled for LNG imports.

• Prices at Dutch TTF benchmark rose from €20 per MWh → €300 per MWh in 2022.

• On MCX, NG contracts spiked over 200% in months, creating both huge profits and massive losses.

📌 Lesson: NG is extremely sensitive to geopolitics + supply shocks.

6. Why Natural Gas is Attractive for Indian Traders

• Volatility: Regular 3–8% daily swings.

• Affordable Entry: ~₹25k margin vs ₹1 lakh+ for crude big lots.

• Event-driven Trading: Weekly storage + weather = predictable volatility windows.

• Diversification: Good addition to a portfolio beyond metals/equities.

 

7. Comparison: Natural Gas vs Other Commodities

 

8. Key Risks in Trading Mechanics

1. High Volatility

   • A single news report can swing prices by ₹15+.

2. Overnight Risk

   • Global markets open when MCX is closed → gap openings next morning.

3. Leverage Risk

   • ₹30,000 controls ₹2.5 lakh → both profit & loss get amplified.

4. Data Dependence

   • Ignoring EIA or weather forecasts can be costly.

 

9. Practical Tips for Smooth Trading

• ✅ Always check the EIA report schedule before trading.

• ✅ Avoid trading with full capital → keep buffer cash for margin calls.

• ✅ Use stop-loss orders (never risk more than ₹3–4 on intraday trades without SL).

• ✅ Start with paper trading to understand volatility before risking money.

• ✅ Trade only 1 lot until you gain consistency.

 

10. Summary of Part 2

By now you should know:

• The key factors moving NG prices (weather, storage, geopolitics).

• The reports every trader must track.

• Step-by-step process of how to trade NG on MCX.

• Real-world case study (Europe crisis).

• Risks & practical tips for safe trading.

This foundation prepares us for Part 3: Strategies & Risk Management, where we’ll cover:

• Intraday, swing, and advanced option strategies.

• How to read charts for NG (technical analysis basics).

• Hedging methods.

• Case studies of successful & failed traders.

 

1. Why You Need a Strategy?

Natural Gas (NG) is highly volatile – prices often move 3–8% in a single day. Without a clear trading strategy and risk management, even experienced traders can face huge losses.

Think of strategy as your trading map and risk management as your seatbelt. Both are essential to survive and profit.

2. Core Trading Approaches

There are three main ways traders approach NG:

1. Intraday Trading (Scalping/Day Trading)

   • Buy and sell within the same day.

   • Focused on capturing small moves (₹2–5).

   • Relies heavily on technical indicators + EIA report volatility.

2. Swing Trading

   • Hold for 2–10 days.

   • Ride short-term trends driven by storage reports, seasonality, or chart patterns.

3. Positional Trading / Hedging

   • Long-term positions (weeks–months).

   • Often used by industries (power plants, city gas distributors) to hedge against price risk.

 

3. Beginner-Friendly Strategies

A. Moving Average Crossover

• Use 20-day EMA (fast) and 50-day EMA (slow).

• Buy Signal: 20 EMA crosses above 50 EMA.

• Sell Signal: 20 EMA crosses below 50 EMA.

📌 Works well for swing trades (3–7 days).

B. RSI (Relative Strength Index)

• RSI above 70 = Overbought (possible reversal down).

• RSI below 30 = Oversold (possible reversal up).

• Intraday traders use 15-min RSI + volume to time entries.

 

C. Bollinger Bands (Volatility Play)

• NG tends to “bounce” within Bollinger Bands.

• Buy near lower band.

• Sell near upper band.

• Great for sideways markets.

 

D. EIA Report Strategy (Thursday 8 PM IST)

• Every Thursday, the U.S. EIA releases weekly storage data.

• Volatility spikes immediately (₹10–20 swings common).

How to trade it:

1. Avoid guessing before data.

2. Let the first 5–10 minutes play out.

3. Enter only if a clear breakout continues with volume.

📌 Example: If forecast was –80 Bcf drawdown, but actual is –100 Bcf (bullish surprise), NG usually rallies.

4. Intermediate Strategies

A. Seasonality Trading

• Winter demand (Nov–Feb) = bullish bias.

• Post-winter (Mar–May) = bearish bias.

• Traders back-test seasonal moves for swing positions.

 

B. Trendline Breakouts

• Draw trendlines on 1H or 4H chart.

• Enter trades when NG breaks with strong volume.

• Combine with RSI to avoid false signals.

 

C. Weekly Chart Gaps

• NG often opens with Monday gaps due to global weekend news.

• Strategy:

  • If gap aligns with major trend → ride it.

  • If gap is against trend → fade (short it).

 

5. Advanced Strategies

A. Options Trading

• NG options on MCX are linked to futures.

• Safer for beginners because risk = premium paid.

Examples:

• Bullish → Buy Call Option.

• Bearish → Buy Put Option.

• Neutral → Sell Straddle/Strangle (advanced).

B. Calendar Spreads

• Buy 1-month NG futures, sell another month.

• Profit from difference in time spreads (carry costs, seasonality).

• Safer than naked futures since exposure is reduced.

 

C. Correlation Trading

• NG often moves with crude oil & LNG prices.

• Traders monitor crude oil charts:

  • If crude spikes, NG often follows.

  • Correlation isn’t perfect but gives early clues.

 

6. Example Trade Scenarios

Example 1: Intraday RSI Trade

• NG at ₹210. RSI (15-min) = 25 (oversold).

• You Buy 1 lot.

• Price rebounds to ₹215 in 2 hours.

• Profit = (215 – 210) × 1,250 = ₹6,250.

 

Example 2: EIA Report Breakout

• EIA report shows bigger-than-expected storage draw.

• NG spikes from ₹200 → ₹212.

• Trader enters after breakout confirmation at ₹205.

• Exits at ₹212.

• Profit = ₹7 × 1,250 = ₹8,750.

 

Example 3: Options Hedge

• You expect volatility but unsure of direction.

• Buy Call (₹200) + Put (₹200) (Straddle).

• If NG moves ₹10 either side → one option profits big, other loses small.

• Useful for EIA event trading.

 

To truly thrive in commodity trading, you don’t just need knowledge — you need discipline, habits, and smart tactics. Below are time-tested tips that can help beginners gradually become confident and profitable traders.

📘 1. Master One Commodity First

Don’t try to trade everything from gold to guarseed from day one.

Start with one — preferably Gold, Silver, Crude Oil or natural gas since they:

• Have good liquidity

• Are easy to analyze due to ample global news

• Offer tight spreads (less cost per trade)

Once you master the movement, indicators, and fundamentals of one commodity, you’ll find it easier to expand.

🧠 2. Learn Price Behavior, Not Just Indicators

Indicators lag. Price action tells the truth.

Spend time reading candlestick charts, support/resistance zones, and volume spikes. Understand why a price moves — not just that it moved.

Example:
When crude oil hits ₹7,000 and volume rises, is it:

• A breakout?

• A bull trap?

• A news-based pump?

Don’t just react — interpret.

📉 3. Always Use a Stop-Loss (SL)

SL is your seatbelt in the trading highway.

Never enter a trade without knowing:

• Where you will exit if you’re wrong (SL)

• Where you will exit if you’re right (target)

Even professional traders have a 50–60% accuracy rate — risk management is how they stay profitable.

🔍 4. Follow Economic Calendar Weekly

Track major global events affecting commodities:

• Crude Oil: US inventory reports (EIA), OPEC meetings

• Gold: US Dollar index, interest rate changes

• Agri: Indian monsoon, crop reports, MSP changes

Use sites like:

• MCXIndia.com

 

📱 5. Use a Trusted Trading App or Platform

Pick a broker that offers:

• Fast execution

• Low brokerage

• Good charting tools (like TradingView)

• Margin calculator

• Education material or paper trading

Some beginner-friendly brokers in India:

• Dhan – Best Overall Broker for Commodity Trading in 2025

• Why it’s #1: Zero-cost tools, deeply integrated with TradingView, free APIs, and modern UI make Dhan the top choice.

• Strengths:

  • Dedicated commodity-focused trading tools

  • Fast order execution

  • Live market scanners and strategy builder

  • Free access to advanced charts

  • Also gives Margin Trading Facility (MTF)

 

• Ideal For: Both beginner and pro traders looking for low brokerage with high-end tools.

• Deep TradingView Integration: Unlike others who offer limited TradingView functionality, Dhan lets you trade directly from TradingView charts, a game-changer for active traders.

• Custom Strategy Builder: Dhan offers an in-built visual strategy builder that requires no coding—perfect for creating and testing commodity strategies on-the-go.

• Split-second Order Execution: With latency optimized infrastructure, Dhan offers faster order placement, crucial for volatile commodity markets like Crude Oil or Gold.

• Live Market Scanners for MCX: Filter top movers, unusual volume, or high volatility commodities in real-time.

• Pre-built Commodity Dashboards: See price trends, open interest, and volume in one glance.

• Have different types of orders available such as Gtt, Limit order, Market order, Stop-loss order, forever, after market, basket order, super order and lot more.

 

Did You Know?

If you place just 50 commodity trades a month, switching from a ₹20-per-order broker to Dhan (0.03%) could save you ₹500–₹800/month, especially if your trade sizes are small.

Feature for Commodity Traders

Dhan offers specific features that matter to commodity traders:

• Margin details shown upfront

• Real-time commodity news feed

• Custom alerts for commodity price levels

• Night mode optimized for after-market MCX traders

• Auto-Detection of Candlestick Patterns on Charts on their trading platform which means charts should automatically recognize & display the names of widely known Candlestick Patterns.
• Other features like 20 Depth Data, Price Alerts, Import Watchlists, etc. you have enough data to help you with your trades.

 

Dhan mobile App have been downloaded on playstore by more than 1.5 million people with a user rating of 4.5 which also shows the trust they have created among users within small time period.

If you’re serious about commodity trading in 2025, Dhan gives you the edge with powerful tools, zero hidden costs, and blazing-fast execution. Don’t just trade—trade smart with Dhan.

Open Your Free Dhan Account Now with no AMC charges

Steps top open an account:

1. Submit PAN, Aadhaar, Bank proof

2. Enable Commodity (Derivatives) in account settings

3. Add funds and get started

Click Here to Open Your Free Dhan Account
No paperwork. No account opening charges. Get started in 5 minutes! Dhan also offers advanced tools like TradingView & Options Trader built-in.

 

📝 6. Keep a Trading Journal

Track every trade with:

• Entry/Exit price

• Why you entered

• What worked/what didn’t

• Lessons learned

This is your personal trading autopsy report. Over months, it will reveal patterns in your success/failures.

📊 7. Build a Risk Plan

Don’t risk your entire capital on one trade.

Use the 1% Rule:
Risk only 1–2% of your capital per trade. If you have ₹50,000, your loss per trade should not exceed ₹500–₹1,000.

That way, you stay in the game even with multiple losses.

🧪 8. Paper Trade Before You Go Live

Don’t jump in with real money. Simulate.

Do mock trading. Use it to:

• Test strategies

• Understand contract behavior

• Build confidence

 

🧘 9. Control Emotions

The biggest enemy of a trader is:

• Fear of losing

• Greed to win more

• FOMO (Fear of Missing Out)

Follow a plan. Detach emotionally. Avoid trading when angry, tired, or bored.

Silver Trading in India (2025): Complete Beginner to Advanced Guide

 

 

7. Risk Management Rules

Without strict rules, volatility will wipe you out.

Golden Rules

1. Never risk more than 2% of capital per trade.

2. Always use Stop-Loss (e.g., ₹3–5 on intraday).

3. Don’t average losing trades.

4. Book profits systematically (scale out at +50%, +100%).

5. Keep a trading journal to review mistakes.

8. Case Studies

Case 1: Trader Without Stop-Loss

• Entry: Buy NG @ ₹210.

• Price falls overnight to ₹195.

• Loss = (210 – 195) × 1,250 = ₹18,750.

• Margin = ₹30,000 → lost 62% in 1 trade.

 

Case 2: Disciplined Trader

• Entry: Buy NG @ ₹210.

• Stop-Loss = ₹206.

• Price falls to ₹206 → exit with ₹5,000 loss.

• Capital preserved for next opportunity.

📌 Lesson: Small losses are part of the game. Large losses destroy accounts.

9. Psychology of NG Trading

• NG is called “the widow-maker” by Wall Street due to extreme volatility.

• New traders often:

  • Overtrade (chasing every move).

  • Skip stop-losses.

  • Risk entire margin in one trade.

To succeed:

• Stay calm during spikes.

• Accept small losses.

• Stick to your plan.

 

10. Checklist Before Entering a Trade

✅ Did I check the EIA calendar?
✅ Is my risk per trade <2% of capital?
✅ Did I set a stop-loss?
✅ Am I trading with the trend (not against it)?
✅ Do I have a clear exit plan?

11. Summary of Part 3

• Strategies range from simple indicators (RSI, MAs) to advanced spreads & options.

• The EIA report is the most important weekly event.

• Proper risk management is more important than strategy itself.

• Case studies show why stop-loss and discipline are key.

 

1. Glossary of Key Terms (Beginner’s Dictionary)

To trade confidently, you must understand the language of energy markets. Here’s a simple glossary:

 

2. Frequently Asked Questions (FAQs)

Q1. Is Natural Gas trading profitable in India?

👉 Yes, but it’s high-risk, high-reward. Traders with discipline and risk management can profit consistently, while impulsive traders may lose quickly.

Q2. What is the minimum margin required for 1 lot of NG?

👉 Around ₹25,000–₹30,000, depending on volatility.

Q3. Which is better for beginners: Crude Oil or Natural Gas?

👉 NG is more affordable (lower margin), but more volatile. Beginners may start small with NG but must use strict stop-loss.

Q4. Can I trade NG Options on MCX?

👉 Yes. NG options are available, and they carry limited risk (premium paid), making them safer than futures.

Q5. When is Natural Gas most volatile?

👉 During EIA storage report (Thursday, 8 PM IST) and in winter months (Nov–Feb) when heating demand surges.

Q6. Can I hold NG contracts till expiry?

👉 Yes, but contracts are cash-settled in India (no physical delivery). Most retail traders square off earlier.

Q7. What’s the best time to trade NG on MCX?

👉 Evening to late night (6 PM – 11 PM IST), when U.S. markets are active.

Q8. Do I need a Demat account for NG?

👉 Not always. Many brokers allow commodity futures without Demat. But if you want to trade options or link across segments, Demat may be required.

Q9. What happens if I don’t square off before expiry?

👉 It will be cash-settled automatically at the closing price on expiry day.

Q10. Is paper trading useful before starting?

👉 Absolutely. Beginners should practice in demo accounts to understand NG volatility without risking real money.

3. Beginner Mistakes to Avoid

❌ Over-leveraging (trading 5–10 lots with small capital).
❌ Ignoring EIA report and weather updates.
❌ Trading without stop-loss.
❌ Emotional revenge trading after losses.
❌ Risking entire margin in one trade.

📌 Remember: NG is called “the widow-maker” for a reason — it punishes careless traders.

4. Quick Reference Tables

A. Natural Gas MCX Contract Specs

 

B. Daily Checklist Before Trading NG

✅ Check latest EIA storage report (Thursdays).
✅ Look at weather forecasts (cold/hot waves).
✅ Track crude oil & LNG prices.
✅ Watch USD/INR movement.
✅ Plan entry, stop-loss, and target before entering.

5. Case Study: Safe vs Risky Trading

Case A (Risky Trader)

• Buys NG at ₹210 with no stop-loss.

• Price crashes overnight to ₹195.

• Loss = (210 – 195) × 1,250 = ₹18,750 (62% of margin).

Case B (Disciplined Trader)

• Buys NG at ₹210.

• Stop-loss at ₹206.

• Exits at ₹206 with ₹5,000 loss.

• Capital preserved to trade again.

📌 Takeaway: Survival is more important than big wins.

6. Final Words: Should You Trade Natural Gas?

Natural Gas is:

• ✅ Affordable compared to crude oil.

• ✅ Highly liquid and globally influenced.

• ✅ A great opportunity for short-term traders.

But it is also:

• ❌ Extremely volatile.

• ❌ Data-heavy (EIA, weather, rig counts).

• ❌ Risky without discipline.

👉 If you are a beginner, start with:

• 1 lot only.

• Options instead of futures.

• Paper trading for at least 2–4 weeks.

With patience, study, and risk control, NG can become one of the most rewarding commodities to trade in India.

If you’re looking for a modern, feature-rich, and trader-friendly platform, Dhan is easily one of the best choices available today. From zero account opening charges to advanced tools like native TradingView, options strategy builder, and free API access, Dhan is clearly built with the modern Indian trader in mind.

Whether you’re an intraday trader, an options strategist, or a long-term investor, Dhan offers the perfect blend of speed, simplicity, and smart technology — without burning a hole in your pocket.

Why wait? Open your Dhan account now and take control of your trading journey with confidence.

👉 Click here to get started with Dhan

 

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Here is the list of things as a beginner you should know, if you are thinking for doing intraday trading.

A brief understanding of

How share market works?

How To Invest In Indian Stock Market – Explained With Examples For Beginners

Learn about the basics of candlestick chart patterns and how to use them for intraday trading and investing. You should also learn about the best moving averages to use for better trading result.

Checkout Mastering Intraday Trading: A Beginner’s Guide to Profitable Strategies in the Indian Stock Market

Note: Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only and intended to give information. All investments are subject to risks, which should be considered prior to making any investments.

Disclaimer

This article is for educational purposes only. Commodity trading involves significant risk and may not be suitable for all investors. Past performance is not indicative of future results. Please consult with a SEBI-registered financial advisor before making trading or investment decisions.