Futures Trading Roadmap For the Newbie – Critical Points to Remember

For many investors, futures trading is perceived to be a complex undertaking that is littered with confusing terms and strategies. Nonetheless, the lure of windfall profits of futures never fails to catch the attention of even the most seasoned traders. With the proper approach, there are enormous profits that await investors in futures markets. This means that you need to familiarize yourself with the dynamics and nuances of futures trading in order to draw in profits on a consistent basis.

How can one be successful in futurestrading? The futures market is the playground of hedgers and speculators. This is where they predict the movements of prices of commodities, currencies and indices. They become winners or losers on the rise and fall of the futures market.

Just like with the traditional markets, the futures market exposes traders to risks. However, the lure of enormous profits is enough to bring in a great number of traders. The potential windfall earnings brought about by the volatility of the market is so hard to resist that even savvy and seasoned traders will grab the opportunity to trade futures. 선물옵션

If you are bent on taking this “bull” by the horn, it is important that you learn about the different types of futures market as well as the different strategies that you can employ in order to increase your chances of generating profit.

Futures Trading of Commodities

The value of commodities is primarily determined by market forces. The futurestrading of commodities happen in a centralized market and involve the prediction of price movements of precious metals, energy, grains, etc. One of the more common strategies used in commodities futures trading is straddle. This involves the holding of the same amount of calls and puts with the same expiration date and strike price.

Futures Trading of Currencies

Just like with commodities, trading of currencies are purely speculative activities where potential earnings are dependent on the rise and fall of a particular currency in the future. One of the strategies used in this kind of futures trading is known as scalping. Scalping involves the deliberate action of taking on short-term profits out of the incremental changes in the value of a particular currency. This is done on a continuing basis, and the generated profit over time becomes significant.

Interest Rates and Indices

There are several strategies that are commonly employed when dealing with interest rates and index futures. For index futures such as S&P 500 index contracts, timing strategies is one of the more popular futures trading strategies. There are two timing-based futures strategies for trading this kind of indices futures. These are the seasonal and the cycle futures trading.