Best Future Trading Strategies
Future trading strategies does not involve making of trading decisions on a day to
day basis about buying or selling your commodities having a managed account, it only requires that you understand the dollars and cents of future trading profits and losses are reached.
This is a basic understanding you need to have if you intend to trade your own account.
Many of different variations and future trading strategies are used by future traders to speculate profits.
The most basic descriptions are illustrated as follows:
Buying goods to profit from an expected gain in the price. You will find that some people will purchase particular items hoping that the item will gain some profits in the future.
If accurate in foretelling direction of the time change, future trader can be sold later for a profitable price thus making profit. Should the price go down rather than an increment in profit, the trader will suffer a loss.
Note that the profits and losses may be larger than the initial margin deposits.
The perfect example to express this would be as follows, assuming its January, and a certain commodity future price is tagged as 20 dollars, and maybe the next coming month it will be expected that the price will have an increment.
You will be required to deposit the initial margin of a certain amount for instance 1000 dollars to buy the futures trade in July.
You can assume that by April the July the commodities future prices will have gained to maybe 24 dollars and you decide by taking your profits by selling the commodity at a profitable margin cost.
Another future trading strategies entails that in case the commodity pricing was inaccurate and the pricing goes down rather than gaining, to avoid the possibility of making further losses, you should chose to sell the contract at the purchased price to cover the transaction costs.
Do note that losses at anytime will affect the losses at the open position that will reduce funds in the margin account bellow its normal maintenance margin level.
To restore your account, you will need to receive a margin call for the amount to maintain the margin account to its initial margin level requirement. Other than buying future trading, you initialize by selling your future trade.
As expected, the price will not go down, the gain can be realized by buying an off setting trade at a reduced price.
by: Rick Lee
Tips You Must Know In Choosing Automated Forex Trading Best Stock Advisory Service Indian Share Market Bse Nse What Are Bond Mutual Funds? Intrust Advisors Using Index Fund Investing To Meet Retirement Savings Goals Things To Consider When Buying A Home In Atlanta Ensure Your Profitability By Learning Day Trading Basics Benefits Of Attending An Option Trading Seminar Making A Stock Option Trading Strategy Ways To Explain Options Trading? Brokers And Trading Accounts Demat Account For Share Trading What You Need To Know About Securities Lawyers Conceptualizing Options Trading Strategy