Tips for Being Successful in Online Futures Trading


by Praveen Ortec - Date: 2006-12-29 - Word Count: 506 Share This!

Online futures trading, like all other trading criteria, involve both risks and great profit making opportunities. What an online trader needs is the open mind to find and utilize the opportunities. Strictly following popular futures trading strategies provide can you good profits but following your trading instincts and believes may result in more profits. This article deals with some tips for futures traders to clear their thoughts and to build healthy instincts.

First of all, you must have a futures trading plan; developed in accordance with your financial background and your ability to trade. You must be clear with the amount you can spend on market. Spending lower amounts means minimizing the chance of profit, and also you may be restricted from following appropriate risk management practices. Spending higher amounts can result in high losses in this volatile industry. It is recommended that what ever money you invest as initial capital must not affect your present living standards.

There are 4 "must follow" principles in all type of trading fields. They include trading with the trend, minimizing the losses, letting the profits run and managing the risk. Trading with the trend in a complex process and mostly depends on your style of trading. If you are a day trader or swing trader, you should follow hourly trends, if a long term investor or position trader then weekly or monthly trends. Minimizing the loss mainly involves the stop loss practices, which involves quitting from a trade when market is against you. This is the toughest instinct, as no one want to afford a loss.

Letting the profit run is perhaps the only instinct common to all futures traders. No one wants to quit a trade providing great profits. But remember to quit a trade as soon as you feel a negative trend. The last but the most important principle for beginners is the managing of risk. It is an essential practice for preserving your capital for future profits. Staying away from highly fluctuating markets and trading mini futures and commodities may be useful. Paying attention to surprise reports like natural calamities, crop reports, international relations etc also help. Diversifying trading field may be useful but over doing so will result in greater losses, as you may not control all your investments.

It is always good to begin with simple steps. Trade small future contracts first and then extend your view to others. Monitor national and international trends, experiment little bit, trade on contracts from some selected fields showing study progress and listen to what others are saying. Selecting a brokerage firm and futures trading software are also important as they are the main factors determines your trading ability and profits.

Probably you know that the only principle applicable at the time of Big Bang, the creation of universe, was the Uncertainty principle. The principle is still there and perhaps in trading fields with great power. Remember the world only supports the winners who struggled for their success. It is possible to over come losses of many days with profit of one day.


Related Tags: software, tips, strategies, brokerage, online trading, futures trading, online futures trading

Praveen Ortec works for NobleTrading.com, a leading direct access brokerage firm offering online futures trading and online commodity trading on different platforms.

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