Futures Trading Blog

Lesley Lyon asked:


A contract, which is usually an agreement between two parties to buy and sell an asset at a specified time at a specified price, is known as future trading. Future trading is generally carried out on a futures exchange. A futures contract has a standardized date and month of delivery, price and quantity.

Futures are different from forwards in the sense that margin and delivery requirements are different. The futures exchange gives certain standard features for a contract to facilitate liquidity in futures trading. A futures contract may be set before maturity by having an equal and opposite transaction, which is the way majority of the transactions are held.

Expiration date is the date specified in the options or futures contract. The price at which the futures contract trades in the futures market is the futures price and the expiration date is usually the last Thursday of the respective month. Futures contractors are available in three series, having one month, two months and three months expiry cycles. A new contract of three-month expiry is introduced for trading on the Friday following the last Thursday.

Since many types of players are involved in trading futures, it helps in the process of proper price discovery. Apart from this, futures contracts also help in hedging of price risk commodity. Futures contracts are highly useful for the producer due to the fact that he gets an idea of the price that may prevail, which in turn helps him quote a realistic price.

On line future trading assists people to trade and exchange on the futures market and online futures trading allows the traders to scan the most recent exchange offers. The trader can send an order straight away into the exchange trading engine and also get the feed back or confirmation of the contracts instantaneously through on line futures trading.

In this way the trader is able to view a live market on the screen and interact with it.

On line future trading has a lot of advantages. The prices of the derivatives traded on the futures market are updated immediately and in real time through online future trading. Due to this interactivity the individual trader gets transparency of the market and good trade speed .It is possible to access the futures market from any computer with an Internet connection through online futures trading and trade on the important electronic futures exchange, around the globe.

To ensure smooth functioning of the futures trading done at the exchange there are certain inherent systems like the futures rolling settlement. Under the futures rolling system, all the trades that are unfinished at the end of the day are settled. The buyer has to necessarily make payments for the securities bought by him and the seller has to deliver the securities sold by him.

Another system that is in vogue is the weekly settlement system cycle wherein the transactions done during the week are squared off on the last day of the cycle, which means that a trader gets a longer time to speculate. When it comes to the question of trading futures for a living, trading futures is certainly a better choice than investing in equities.



SHAMBURGER

local_enquirer asked:


which are the best online futures trading platforms?

BRISENO

SMCTrader asked:

http://www.smctrader.com - This video shows you step by ste how simple it is to trade Futures internationally. It also shows you how you can get access to technical analysis and 23 charting studies.

LINDO

Sai Vallejos asked:


For every income there is always an opportunity cost, and this includes online futures trading. This type of business allows online futures trading traders to calculate risk to minimize cost on online futures trading (OFT). True, there are many guidelines in OFT, but they are not risk free common to all types of businesses.

Following rules on OFT, strictly speaking cannot earn you lots in online futures trading, but if you combine with thinking and gut feel, most online future trading traders will agree, that they earn more profits compared to just following the rules of OFT.

To be successful in online futures trading trader, it is important to have a plan. First, it is important how much amount will be put in as a capital for your trading business; second, thr secret is experience. A successful online futures trading trader ought to have experience, it is important to look for a trainer or a mentor who is a seasoned online futures trading trader.

Third, is identification of OFT style; is it short or long term OFT? Risking an amount as a capital for online futures trading should be calculated, to avoid loosing a big sum of money. It can provide higher profits, but it can also make you loose money for online futures trading.

Too little investment in online futures trading, limit your capacity in practicing sound speculation in financial management in an online futures trading environment. It is best to study one’s trading style and the quantity of hours spent in online futures trading. OFT traders require the whole day on line, if trading during the day or swing trade futures are preferred.

There are four important principal ideas about to consider in an OFT, they are: trend trading, diminishing losses, running profits, and risk management. Trend trading is a tactic used by position traders in online futures trading, they follow the market closely, at least yearly but it is advisable to follow the market closely .

The second idea of online futures trading is diminishing losses or minimizing losses, it is the most challenging principle to apply but easy to conceptualize. It is actually knowing when to stop online futures trading when a certain loss is about to occur, after identifying the market trend.

Running profits or “letting the profit to run” is allowing your capital to roll when the profits are good in OFT, it also takes fortitude when the trend is loosing. It takes practice to master this skill of online futures trading, but it is easy to understand.

The last principle in the business of online futures trading is risk management; it requires lots of training and not easy to understand. It’s actually protecting your capital for OFT profitable, if the trend improves, the online futures trading commodity trader trades, this will require skill, practice and experience.

Another secret is to avoid investing in highly volatile markets to minimize risk.



VAILES