Futures Trading (Part I)
Written by author on Friday, July 31st, 2009 in Money Investing.
Trade Dow Futures and S&P Futures. The first choice for many investors was and is the stock market. Many small investors are looking for new avenues after getting their fingers burnt during the recent stock market crash. Investors have many choices for investing their money today. Learn swing trading.
If you are among those who take a look at their mutual funds portfolios only once a year than futures trading is not for you. Risk and uncertainty goes hand and hand in money making opportunities.
You will have to get out of the buy and hold investment mentality if you want to take on futures trading. Those who can’t shake off the preconceived notions and discover to make money as the market rise and fall are not successful at futures trading. What it means that those who can embrace the inherent volatility of the world and the markets and use it as a wealth building tool are more successful at futures trading.
Futures trading is for the 21st century. Although futures markets began in the United States in around 1850s, futures trading didn’t have global significance until the 1980 when companies and governments embraced futures trading as financial management tools for hedging.
Technological advances especially the internet has transformed the futures trading landscape. Today individuals trading futures are on a level playing filed with professional traders and institutional investors.
Now most futures contracts are electronically traded with online order entry and execution. E-mini products have been created specifically to appeal to the individual investors and are now standard among exchange offerings.
Futures contracts are highly leveraged and marked to the market daily. There are many ways that individuals can use futures for trading and portfolio diversification. Futures industry is well regulated and has superior financial safeguards in place to ensure trading integrity.
The chances for sustainable trend that last for decades like that happened in the stock markets during the 1980s and 1990s are less likely. Good services and basic materials will probably undergo major price swings, up and down during the next two to three decades. The volatility of the markets is only going to increase.
The today’s world calls for a more active and even speculative investor. The new world calls for a trader and futures trading offer one of the best opportunities to make money by trading in volatile times. The past investors could afford the luxury of buying and holding stocks and mutual funds for the long term (this is what Warren Buffet did in building his fortune) but not now.
However, trading futures contracts is a risky business and requires active participation. In order to change from a couch potato to a futures trader, you will have to work at it or you will be out of the game very quickly. You need to know the futures market intimately. Developing a winning futures trading plan can help you achieve success!


































