Futures Trading Blog

westphalia1 asked:


Is it true that the LOWER the maintenance margin requirement on certain commodities (Mini Futures, Corn, Oats) the riskier that commodity is? As opposed to the Higher (priced) maintenance margin futures. True? Not true?

BOLANOS

Kelvin Y asked:


If a Hong Kong resident setups a BVI to trade commodity futures in NYMEX, what tax does he pay? profit tax?

GEBHART

IraEpsteinFutures asked:

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Futures Trading, Online Trading, Metals Review, Sales: 800-284-3010

DIEHL

bnmail asked:


I am getting back into options trading and want a reliable broker, with a 3k minimum or less account funding and real time quotes, less than $22 roundturn. Thanks!

THETFORD

Albert Smith asked:


Futures trading is fast becoming a very popular investment option, because a lot of people have managed to make it big trading futures. If you’re interested in joining that elite group of successful individuals, but have no idea how to take that first step, then read on, because this article will tell you how to learn from simulated futures trading.

The internet has made available countless of online tutorials and lessons on a wide variety of subjects, ranging from designing your own garden to designing your own website. Futures trading is no exception, and if you look hard enough, you’ll be able to find a rare gemstone or two; a website that will impart to you all the knowledge you’ll need to get started.

Sure, you’ve gotten the basics down, and you’ve got the theory etched into the back of your eyelids, but without practical application, the knowledge you’ve gleaned from all that reading and researching won’t mean a thing. Previously you might have read about concepts and theories and strategies in your research; by the end of it you’ll know the rules of the game.

But how do you play the game?

That’s where a simulated futures trading program comes in. At this point, if you’re a beginner, you might be asking yourself: What exactly is a simulated futures trading program anyway?

It’s exactly what it says it is; a program that simulates the futures markets, one that allows you to apply all the theories that you’ve learned into practical application by practicing futures trading, without having to risk any real money. Many futures brokers have made such programs available online for the usage of their prospective clients, usually free for a limited trial period of thirty days, but if you feel the need for more practice, you should be able to continue using the program for a nominal price. Simulated futures program may vary from one futures broker to the next, but they come pretty much standardized in certain aspects.

Normally you would be given a simulation account, with “fake” money to make trades with. You can use this money the way you would use “real” money offline, but of course, because it’s a simulation, any losses you make won’t burn a hole in your pocket. Along with the simulation account, the program would provide you with the same tools and information any real trader would have, and this is why learning through simulation is advantageous for beginners. Since the program is essentially a simulation of the real world futures markets, you would be exposed to the same exact market conditions as you would be if you were trading for real, and the simulation should give you a good measure of how you would fare should you delve into the real world markets. Every decision made in the simulation would be a determinant factor in your potential success or failure in your real trades, so it is imperative that you get the most out of your practice with the simulated futures trading program before embarking on the real deal.

Eventually the hands-on experience prior to your real dealings with the futures markets will prove to be invaluable, because at some point of the simulation you might feel that futures trading might not be for you. So rather than potentially having the bitter experience of losing your money in the futures market, and THEN deciding that trading futures isn’t for you, you can easily back out from any further ventures with futures trading as long as you’re still practicing with the simulated futures trading program.



COUVILLIER

Chris D asked:


I would like to have your opinion on the best online trading site. In the future I would like to have a safe site where I can trade stocks easily and quickly with little experience, and I guess for a good price per trade. Thanks for your help.

GUERECA

IraEpsteinFutures asked:

Futures Trading, Online Trading, Metals Review, Sales: 800-284-3010

BUKOWSKI

skahhh asked:


I see this on CNBC every day! They seem to indicate that this could indicate that the stock market would rise on a positive number and fall on a negative number! Is this an indicator or pre market trading or overseas trading? How are they making the predictions for the day? What are they basing it on?

STROUP

infallible_oracle asked:


If you trade futures, stocks, FX: do you use the same Trading System or a different system for different markets.

Also what is/are the Trading System that you use for each market:
1) one you bought off the shelf;
2) put together yourself from existing indicators techniques (ie MACD, Moving Averages, Chart Patterns, etc);
3) developed entirely by yourself through mathematical programming into a new proprietary system
Not fishing for the secret all infallible holy grail of trading system (if it even exists).

Just want a simple answer like:
I trade using point (2) using candlestick patterns and moving averages as trailing stops. Use it to trade FX.

Dont need to know the time period of your moving averages or secret mathematical formulae you’ve programmed into TradeStation or MetaStock.

CASTENEDA

bing zou asked:


Futures trading is the investment style of buying or selling futures contracts. Futures contracts have been used to manage cash market price risk for more than one century in the world. Unlike a stock, which represents equity in a company and can be held for a long time, if not indefinitely, futures contracts have specific time period. Futures trading allows a market participant to lock in prices and margins in advance and reduces the potential for unanticipated loss.

Futures contracts trade in standardized units in a highly visible, extremely competitive, continuous open auction. In this way, futures lend themselves to widely diverse participation and efficient price discovery, giving an accurate picture of the market.

There are two basic categories of futures participants: hedgers and speculators. In general, hedgers use futures for protection against adverse future price movements in the underlying cash commodity. The rationale of hedging is based upon the demonstrated tendency of cash prices and futures values to move in tandem. Speculators are the second major group of futures players. These participants include independent floor traders and investors. Independent floor traders, also called “locals”, trade for their own accounts. Floor brokers handle trades for their personal clients or brokerage firms.

For speculators, futures trading has important advantages over other investments:

Futures are highly leveraged investments–The trader puts up a small fraction of the value of the underlying contract (usually 5%-15% and sometimes less) as margin;

Commission charges on futures trades are small compared to other investments–the investor pays them after the position is liquidated;

Most commodity markets are very broad and liquid–Transactions can be completed quickly, lowering the risk of the time delay from the decision to the execution.

Most trading objects are familiar to you–from crude oil to gold, from metal to grain, from treasury bonds to stock index.

The basic requirement for beginners on futures trading is a futures trading plan, created according to his or her financial background, trading style and trading ability and so on. The capital you should have depends solely on your trading budget. If you take futures trading as a part-time job, then investing lower amounts for small profits can be the right plan. But if you want to make futures trading for your living, then you should invest much more.

Keep in mind that futures prices are more volatile than stock prices. Remember it is margin trading and expanded more than 10 times as your normal investment. You need to ask yourself how much you can afford to lose. Be extremely honest with yourself about this, in fact, be more than honest so that you are sure to not overextend your budget.

Here are some simple tips that will help you increase your profit potential and prevent you from losing money.

1. Understanding the basics of fundamental analysis and technical analysis

When you do futures trading, it is very important to understand the difference between fundamental analysis and technical analysis. A quick explanation of the difference among the two types of analysis is: fundamental analysis focuses on the relationship of supply and demand while technical analysis focuses on price action and market behavior, especially on chart and technical indicators.

2. Trading with the trend

No matter which futures you are trading, you have to trade with the trend. As you know, the price will be changed when the supply and the demand have been changed. If no further factors occur, the trend used to be going on. However, trading with the trend is a complex principle as it depends on the trading style. A day trader may follow hourly trends as he trade according to minute changes in prices. On the other hand a long term investor or position trader may follow weekly, monthly or even yearly trends.

3. Minimizing the losses and running the profit

Minimizing the losses means quitting the trade quickly when market is against you. As no one want to quit a trade in loss, it is the toughest decision to make.

No one trading futures will want to quite a trade providing great profits. But remember to quit a trade as soon as you feel a negative trend. Meanwhile, running futures contracts when the trend is the same as whcih you wish.

4. Managing the risk

Managing the risk is most important to beginners. It is an essential practice for you to set up a stop order before you trade to evade big loss and move your stop order to preserve profit. Keeping hands off from highly fluctuating markets and investing in mini contracts, paying attention to surprise reports, diversifying trading fields are some of the practices involved.

Always monitor national and international trends, especially pay more attention to relative contracts trends, you will make a success on futures trading. Visit SoloInvest and TradingSolutions to know more.



CHINA