Futures Trading...online Commodity Trading
One might say that there has to be some kind of mystical knowledge being used
, considering the price for the commodity doesnt yet exist. Commodities are any physical, tangible goods, such as crops like corn or wheat, to oil, gold, and currency, just to name a few. The futures market has nothing to do with the use of a crystal ball, though there are many traders who wish they had one. A futures contract is a standardized contract to buy or sell a specified commodity of standardized quality at a certain date in the future, at a market determined price (the futures price). The contracts are traded on a futures exchange.Today, with online futures trading, we have instantaneous results which provide greater benefits for the trader. This of course results in worldwide access. Before we address possible methods, we must first recognize the players in this high stakes game of commodities.
Since most individual traders are speculators, here is a list of some of the advantages and disadvantages of the futures market over other investment possibilities.
1. The possibilities exist that a person can make more money faster in the futures market, because the speed of prices tends to change faster than stocks. Conversely, bad judgment can cause one to suffer greater losses than traditional investments.
2. Futures are highly leveraged investments. The trader only puts up about 15-20% as a margin, yet still being able to ride the full amount of the contract. Unlike stocks where at least 50% of its value has to be put up, and the investor pays interest on the difference between the margin and the full contract value.
3. For the most part there is no inside trading. Everyone has the same insiders information on the weather, for example. This is an open outcry market, very public, which insures a fair outcome.
4. Commission charges on futures trades are small compared to other investments, and the investor pays them after the position is liquidated.
5. Most commodity markets are very broad and liquid. Transactions can be completed quickly, lowering the risk of adverse market moves between the time of the decision to trade and the trade's execution.
Most traders that fail, do so because they dont have a realistic plan. Hopefully by the end of this article you will have the knowledge to be able to devise a program that will reap huge profits, by trading futures correctly.
As with anything you pursue, attitude is a key ingredient. Make
sure you understand that although this opportunity is a way to gain great wealth, you must never forget about the risk. Risk is good! Remember if you have knowledge and training you will welcome the risk. Remember too, that this is not for day traders. You will be working the trend not the rush.
The Breakout System
The Breakout System works. It has worked since the beginning of trading. Most novice speculators dont use the breakout system, and thats why 90% of them lose money. The good news for you is that if you learn to use this system you will conquer the futures market. The breakout system is based on human psychology so discipline is vitally important. This is where most traders fail. You must develop the confidence to stick with their system.
You must have some of that river boat gambler in you, and develop guts and staying power. Most beginner speculators want to take as little risk as possible, and they always get stopped out before the trade has a chance to mature. You need to take risks to make big gains! Work your plan and see it through to the end.
Options will give you the best opportunity. You must use options in the right way though, with plenty of time value, buying them at, or close to the money.
Choose the Right Tools
Every Project Needs the Proper Tool
You also need the right tools to go with your knowledge. Any training you receive should be for technical analysis, or you are just wasting time and money. As far as software platforms, the following suggestions I strongly feel are necessary for any software to be useful.
1. It must be able to offer live streaming technical data. (Otherwise the program is merely educational)
2. The platform should defiantly include candlestick charting.
3. Visually it has to be large enough for all the data to be seen easily. (Many of the online brokerages technical data are too small to be useful)
4. It must be cost effective. (Most good systems can be purchased for between one and two hundred dollars)
These are just a few ideas that you can utilize to increase your chances for success. I dont profess to being an expert, but I do know of some. I obviously dont have the time to go into all the details now, but at my site Market Mentalist you will find all you need to know about investing online. There is access to some of the top trading systems available including Forex software, books, newsletters, and Forums. Also you will find the most up to date articles on Online Trading, including additional information on Futures Trading...Online Commodity Trading. Whether you are an inquisitive novice or a seasoned pro Market Mentalist offers the online investment resource you just might be seeking
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