If there’s one word that sums up the flavors in trading, it would have to be, “Futures Trading”. This activity is much safer than trading stocks, as the futures market. Although, trading futures can only yield a return of maybe 7 percent a year (compounded quarterly) nevertheless successful futures traders can graciously show an annual profit of well over 100% in less than 1-year (compounded quarterly). If you would like to get a piece of this pie, then it will be necessary to move from Paper trading to Robot Trading.
Who are Futures traders
Futures traders (in general) are NOT Bot-driven traders, but rather, they evaluate the underlying Futures contract they are trading. Top Futures traders (the guys who go to precisely see the contracts when they are triggered, and who make the buy/sell decisions) are highly specialized. And they have the knowledge and skills to analyze and predict what the price of the underlying future contract will be, over a very short time, such as a few minutes, an hour, or a few hours. Thisrecurringinformation feeding the Futures traders is especially important because of the large sums of money involved (in the futures market). If there is a large discrepancy between the price the Futures traders perceive and the price the broker’s choose to execute your Futures trade, then sometime shortly there will be a discrepancy between price and liquidity (more on that later). Let us discuss briefly how you can establish yourself as a reliable Futures Trader and allow others to profit on your trades.
When you opened your trading account you gave notice to the broker that you wanted to open Futures trading. Your account will show the Futures contract type and some little else that indicates the type of trade that you are taking part in. Let’s say you wanted to trade what is known as an Options Futures contract. In a trading plan that you might have created yourself, (and provided to your account) your platform would read options. So where would the Futures trader (you) draw the line, now that we have defined how you want to trade.
The process of Futures trading
As you can see, when you trade Futures, you are entering a contract with both the buyer (you now) and with the seller (the futures broker or bank). The money that goes into your account represents the money that the buyer would like to purchase a given amount of a future’s contract. If you are using Options trading you would buy an option. Your options’ price would be set by your broker as an “underlying price”. In a very few instances, the price has no intrinsic value, but it is known as a price “of “in the money”. If your transaction is in the money, it represents a very good trade; if you were off-the-beat, it represents a bad transaction. If you went from off-the-beat to on-the-beat, the price of the underlying futures contract may have gone up. If this occurred 2 paced up, it may represent a good trade, if it was one-paced down, it may represent a bad one. You can differentiate between a bull and a bear on two methods, intrinsic value and price. The intrinsic value is determined by the price of the Options contract itself, and the price is determined by the options themselves. Price is determined by time value, experience, genes nearby, and the amount of time the transaction is in the money. While experience in Options will be unknown to future traders, this is no harder than trading a stock like Harvard.
There are more places to take a loss than on money. What you do with your profits depends on Forex trading. Your trading method should encompass on-the-money and in-the-money. Why? Short Term traders should be wary of putting their futures trading on leverage. Leverage is attractive if it lowers the margin of profit that you would normally earn. Most small-time traders expose themselves to LOIs, keeping there’s, money to make more money. This should be avoided if you are a long term trader. Still, trade sparingly, and ager that the margin rate on the money is low. This way, you can make a small trade, have it fill up and be a profit, and take your earnings. When you trade Options, you would not want to expose a large percentage of your capital to a bad trade. Thus the option trade would not be a good idea. With the money that would be put into an Options trade, this would be the time that a “gut feeling” might come into play. This is known as an educated gut feeling. It is never an educated Forex trading decision to put your money into the market. With good advice from your forex trading mentor, this is an intelligent decision with a good outcome.
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