How Do I Start Trading Futures?

 


Visitors: 114

First, read as much as you can about trading. Next, go find a broker who has several years of trading experience along with excellent references. It is highly recommended to do some paper trades before you jump headfirst into this kind of trading. In the beginning start out small. As you learn the ropes you can start putting more money in.

There are some things to bear in mind while picking a broker. The experienced ones charge higher commissions that the online equivalents. But, they are more accessible than an online brokers for guidance in making trades. This information can be helpful in the beginning at the least. If you were to start out on your own with an online broker you have greater chances of losing money due to your inexperience.

Trading futures like most complex skills is difficult to master. The experience you gain in this will come at a price. Of course, the only way you will learn is by jumping in headfirst. In the beginning, you should assess your risk tolerance. Is it too high or too low? You need to keep track of the trades that you make (for your paper trades too). At this point an experienced broker could help ease the learning curve and save you from making bad trades early on. They will give you the necessary advice on maintaining your position or closing it. For example, if you are going on a vacation. They'll make sure you close your positions. Similarly, they will also suggest closing your position before the ‘crop report’ is released. Its their job to stay aware of the weather and crop conditions in the continental U. S. It is in these situations where their advice can save you from making a lot of expensive mistakes.

In contrast, the online brokerage firms will not offer these kind of services. They are minimal service brokerage accounts which go on the premise that you are fairly independent and are aware of what you're doing. For the same reason these are highly recommended for professional investors. In a nutshell - you get what you pay for.

In summary, futures trading can be very lucrative. Where to start in this form of investing? Firstly, get your hands on as much information as you possibly can. You need to be aware of what exactly you will be getting yourself into. Don't let the pictures of luxury cars, expensive vacations sway you just yet. These dreams can definitely be accomplished. But these will take some time. If you really think you are ‘lucky’ enough to make money quickly, you might as well go the nearest casino and play a game of craps. Atleast you'll only lose the money that you go there with.

The world of futures and options trading doesn't have to be this complicated. Learn how to cut through the hype and learn the facts by visiting http://www.e-options.org/articles/ to read more about options trading and eminis futures trading .

(511)

Article Source:


 
Rate this Article: 
 
Commodity Futures and Options Trading- Money Management, Risk and Trading ..
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

Online Futures Trading - Getting Your Start With Paper Trading

by: Stephen Bigalow (May 15, 2007) 
(Finance)

Futures Day Trading - Patterns in The S&P 500 and E-mini Futures Contracts, .

by: Thomas Cathey (March 07, 2007) 
(Finance)

Futures Day Trading - Patterns in The S&P 500 and E-mini Futures Contracts- .

by: Thomas Cathey (March 07, 2007) 
(Finance)

Emini Trading - How to Start Trading Emini Futures

by: Waldemar Puszkarz (September 30, 2008) 
(Investing/Day Trading)

Electricity Futures Trading - 8 "Whys" And "Hows" Of Electricity Futures ..

by: Abhishek Agarwal (April 02, 2008) 
(Investing)

Futures Spread Trading - Increase Your Trading Arsenal Using the Methods of ..

by: Bryan Moffitt (October 21, 2008) 
(Investing/Day Trading)

Trading Commodity Futures - Intuitively Day Trading The S&P 500 And E-Mini .

by: Thomas Cathey (March 22, 2007) 
(Finance)

Commodity Futures & Options Trading - Is This Stuff Blocking Your Way To ..

by: Thomas Cathey (February 22, 2007) 
(Finance)

Commodity Futures and Options Trading- Money Management, Risk and Trading ..

by: Thomas Cathey (May 19, 2007) 
(Finance)

Commodity Futures and Options Trading- Money Management, Risk and Trading ..

by: Thomas Cathey (May 19, 2007) 
(Finance)