Beginner’s guide to Futures Trading. This guide will give you a general overview of the futures market as well as some descriptions of the techniques and instruments common to the market. As we will see, 3 are futures agreements/contracts that cover a lot of different classes of investments (i.e., gold, stock index, orange juice) and it is not possible to go into huge detail on each of these. It is, therefore, recommended that if after reading this fundamental guide you make a decision to start trading futures, you then spend a few times studying the particular market in which you interested in trading. As with any effort, the more effort you put into market research, the better your odds for success will be once you actually start.
Important Note: While future trading can be used to very effectively poundage other investment positions, Future trading can also be used for speculation. Doing so carries the probable for huge rewards due to leverage but also carries outsized risks. Previous to starting to trade futures, you should not only prepare as lots of possible, but also make completely sure that you are comfortable and willing to accept any financial losses you might bring upon yourself.
The Fundamental structure of this guide is as follows: we will start with a general future market overview, including how futures work, how they are vary from other financial instruments, and the benefits of understanding and drawbacks of leverage. In Section 2, we will move on to look at a few considerations previous to trading, such as what brokerage firm or advisory frame you might use, the different types of futures agreements/contracts available and the different kinds of market trades you might employ. Section 3 will be focus on evaluating future market, including depth technical and fundamental analysis techniques as well as packages that might be useful for a trader. Finally, Section 4 of this guide will give an Ex of a futures trade, by taking a step-by-step look at selection, Depth market analysis and execution of market trade. By the end of this guide, you should have a fundamental understanding of what is involved in futures trading, and an excellent foundation from which to start further study if you have determined that trading of futures is for you.