Futures trading are a calculated investment process and it is widely based on market analysis and trend assessment. A futures exchange is called futures market, and it is a central financial exchange where traders can trade regular futures contracts; a contract is the agreement to buy precise quantities of a commodity or financial instrument at a specific price with delivery set at a particular time in the future.
Futures trading can be profitable; however, you need to run your business on some proven guidelines. If you have decided to start your futures trading, learn these 10 golden clues for sailing smooth in the market.
Plan properly: it will create a roadmap
Every infrastructure needs a planning, so is a business. You need to plan your futures trading before you start in a way so that you can move with pre-calculated way. Your planning should not only be focused on generating profit, also you should curve a niche in the market, which will be your long term profit. This planning should be done in a stoic way, without being biased. In one word, you need to plan in advance.
Plan the Exit: stay safe
Knowing where to stop is a great power. This is very much needed in futures trading. As a futures Trader, you must learn where to stop. It is a high risk market and there is chance of incurring loss. In case you fail to shine here, know your breakeven point, where you need to exit. This will help you to save your fund.
Triggers: identify the triggers
You need to set your own triggers, which will help you to decide your exit point. These triggers are personalized and may not match with other traders. But you should learn to stay alert about the triggers.
Create a focus
There are multiple options available here and some of them may seem instigating. You need to practice restrain and complete focus on a particular direction. You can get it done by being market savvy. Reading charts, following pros, reading market commentary are the ways to track markets. Veteran traders follow 6-8 markets according to their discretion. You can select market according to your personal choice and convenience.
Maintain a balance
The markets are volatile and unpredictable. If you deal with one market, there is high chance that your profit and loss will solely depend on this market. Instead, if you deal with 3-4 potentially strong markets, you will get parallel scopes to square the risk of making loss. It is highly unlikely that all markets will stay down at one point of time.
Slow and steady wins the race
Slow pace may seem boring for you, but as a newbie, you must move slow and alert. You should start with 1-2 safe contracts and gradually develop a methodology to expand by trading in market. Once you will get some command over the market, try to increase your trading volume, investment size to grab better opportunities.
Buy and sell: stay open to both
Market is highly volatile and you may need to play the role of a bear and bull simultaneously. Understanding when to sell and when to buy is one of the biggest skills on futures market. You can consult some senior traders in market, rest you need to move by your logical guess.
Patience is one of the most wanted virtues that will help you stay safe in the market, no matter how volatile it is. You must watch market but do not be overactive on every ups and downs of market and that will bring stability for you. According to experts, day trading is good but it is not recommended for long terms profit.
Look for the margin
You should always be sincere about getting a margin call. This is one of the triggers you cannot overlook for the sake of the continuity of your business. If a trading cannot bring you profit and you are on the verge of loss, it is better to quit the trade. Looking at the margin is always a safe option.
Prepare for the process
Plan your futures trading and try to collect all tools and resources that can facilitate your trading process. Research your tools and resources and get them handy to use when needed.
These are the 10 golden rules for future traders to churn success from market. These rules are especially applicable for newbie to stay safe during their trading business.