Archive for 'Future Trading'

Futures & Commodity Trading

Tuesday, January 20th, 2009 at 3:35 pm

An Introduction

to Futures & Commodity Trading

Know more about futures trading. The article provides information about futures trading, advantages of futures trading, futures trading styles, types of futures contract available and futures trading brokers. Will be beneficial for all those interested in trading futures and commodities.

Futures trading are the trading of contracts called futures contracts, which provides the owner the power to trade the underlying commodity at somewhere in the future for a fixed rate. The rate is usually the price rate of the contract creation. Like stocks and options trading, futures trades are done in precise centralized futures commodity trading markets like Globex and S&P.

Chase O’Leary on Future Trading video below

Futures trading is becoming more and more popular, this may be because of a lot of reasons such as; simplicity in trading enabling virtually any one to trade, more liquidity of the market due to the high volume of trades done each day, the stability of market as a result of high liquidity, price stabilization between markets mostly because of arbitragers, easy in owning underlying commodity product rather than looking for reduced price values, low transfer rates imposed by trading brokers, the easy to go short or long at any time, requirement of comparatively small initial investments, easy to set up an account and trade from home, availability of mini, standard or large futures contracts, and the availability of a variety of underlying products and commodities.

Futures contracts are mainly of two types as commodity futures contracts and financial futures contracts. Commodity futures contracts are contracts which end with a physical delivery. They include agricultural commodity futures like rice, sugar, wheat, oats, soybeans etc; energy commodity futures like heating oil, crude oil, natural gas, etc; metals & stones like gold, silver, diamond etc; and others such as animals, wood etc. Financial futures contracts are contracts which end with a cash settlement. They include futures for treasury notes, mutual funds, bonds etc.

Commodity futures trading involves to steps as ‘short’ and ‘long’. ‘Going long’ means buying a contract and ‘going short’ means selling a contract. Like futures contract, futures traders can also be grouped into two large categories as Hedgers and Speculators. Hedgers are the issuers of futures contracts, doing so to tackle the risk of low price at the actual product delivery time. Speculators are the actual futures traders trading for profit. Speculators include all types of futures traders you see around like futures day traders, futures swing traders, futures position traders etc.

The two basic necessities of futures trading are the money and the trading account from a futures trading broker or Futures Commission Merchant (FCM). The initial capital investment changes according to the type of the contract you are trading, to the method of trading you follows and to the account features of futures trading broker. Simply speaking, a futures trading broker is the mediator between the trader and the futures market, who deposits the margin collected from traders to the trading market to make the trader a qualified one.

The two types of futures trading brokers are full-service brokers and discount futures trading brokers. Irrespective of the type they are responsible for maintaining trader records such as the trader’s margin deposits, money balances, open futures and transaction completed. In return of these services provided the futures trading broker will charge a fee, depending up on the trading frequency, trading volume and account status of the futures trader. In USA all these futures trading process is monitored by the federal agency Commodity Futures Trading Commission (CFTC).

About the Author

Praveen Ortec works for NobleTrading.com, an online day trading broker offering discount online futures trading on 3 different online futures trading systems.

By Praveen Ortec

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How to Build Huge Long Term Gains

Tuesday, January 20th, 2009 at 3:35 pm

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Futures Trading Systems – How to Build Huge Long Term Gains

Futures trading systems allow anyone to build long-term capital gains – quickly, and without incurring high asset manager fees. Systems and can yield annual profits of 50% to 100% – sometimes even more.

You should consider using a futures trading system for the following reasons.

Charles Ward on Future trading video below

1. Diversification – a number of asset classes are covered that are uncorrelated to the stock markets – and they include, currencies, interest rates, stock indices, metals, energies, grains and meats, and food and fibre.

2. Systems generate profits in any market condition – you can make money in both rising, and falling markets – meaning there are constant opportunities for profit.

3. The global economy is expanding fast – and countries such as India and China, are leading a worldwide global economic expansion. The perfect example of this boom is the huge rise in the price of crude oil.

4. Futures trading systems have a technical basis – they follow market momentum. Systems don’t care why prices move – they simply follow market trends, to stack up huge capital gains.

5. Futures trading systems are quick and easy to use – you can manage your own investment in less than 30 minutes a day, and still make huge gains – without paying large fees to fund managers.

The Popularity of Futures Trading Systems

The popularity in futures trading systems is fuelled by the growth of the Internet – and the fall in the price of high-powered computers and software. Now, anyone with a basic computer and an Internet connection can trade for big profits.

Build Your Own System, or Buy One?

It’s down to the individual – but it is easy to build your own system.

If you want the perfect futures trading system, then read articles on breakout systems. Breakout systems are simple to understand and use – and the rules are programmable into many software packages, such as Supercharts and Tradestation.

If you want to buy a futures trading package there are many good ones around, just use this checklist:

1. Make sure you understand the logic – the logic needs to be easy to understand – so you have the confidence to follow it. Avoid the so-called "black box" systems – where the logic not visible to you.

2. Track record – Look for some form of real time track record – not just a hypothetical simulation. Let’s face it – we can all make money – if we know the price history!

3. Check the vendor and his background carefully – so you are comfortable with the support, and backup you may need.

4. Make sure you check the drawdowns – check the worst time to invest and the fall from this level – also, how long does it take to make a new high. This of course could happen again – and you will need to be prepared for short-term losses – and this will give you good guide.

5. Look for a long-term trend following system – as long-term trends make the biggest profits. Avoid day trading systems, as these tend to be less effective.

Buying a futures trading system is really just down to common sense. Find out as much as you can about the system, and logic – until you are comfortable about making a purchase.

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Liam Tomkins on Future Trading video below

Get Ready for Big Profits

We are seeing huge moves in commodity and future contracts – and these moves can yield big profits.

The advantage of a technically based futures trading system, is that you don’t need to decide when to enter – the system will simply lock in, and follow the big trends as they emerge.

A Disciplined Plan for Profits

The advantage of using a futures trading system, is that you are not subject to your emotions – which is the main reason futures traders tend to lose money.

Crude oil has made many people look at trading the markets – but there are always great trends around. For example, currencies are always trending – as are many of the other groups.

In conclusion, futures trading systems are quick and easy to use, save you money on advisor fees, add diversification to your portfolio, and give you the potential for big capital gains.

1,000 Pages Of Wealth Building Material FREE! Including tips, strategies and systems and more on futures trading systems info. Visit our web site at http://www.tradercurrencies.com

By sacha tarkovsky

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