The world financial markets have changed a lot and people can now trade for themselves. This means that you are responsible for your own funds. Therefore, you have no choice other than to accept the risks with futures trading. The greatest risk is having no account, having lost it in this market. That is losing your investment.
What that means is you should not worry about the profits, they will take care of themselves but rather protect the capital because you can lose it. If you lose the capital, then there is no way you will be able to earn the profit.
The first thing you must do is use a stop loss order. It is executed after the price which you had put. This is the level which you were willing to lose. One should always have a stop loss. It shields you from holding on a losing trade. You usually place a stop loss below a support.
The second order you should use is the take profit. This will ensure that you once your target is hit, you get out of the market. It is greedy to leave open transactions. Place the take profit at a resistance.
You can use the liquidity to your advantage. The liquidity of a future can be determined through open interest or the volumes traded. That information is free at the papers or from your broker. Take advantage of that. Liquidity calls for trading the futures that are actively traded. They can be bought or sold without people staying out of this market.
Choose a future that is highly liquid. This will give you the chance to offset the future when you want. A liquid future is the one that is actively traded. You should find out the risk appetite of the future that you want through the volumes and through the open interest. Both indicators are usually in the public domain.
Timing is of outer most importance in trading. One has to time when the market is changing in the trend. Anticipating for the best price will serve you the best. This is to avoid the short run losses that may occur. All the successful traders are good timers. A contract should be bought or sold after the confirmation of the change in trend. The spread should also be considered. Remember to trade the futures that investors and traders have high appetite for.
What that means is you should not worry about the profits, they will take care of themselves but rather protect the capital because you can lose it. If you lose the capital, then there is no way you will be able to earn the profit.
The first thing you must do is use a stop loss order. It is executed after the price which you had put. This is the level which you were willing to lose. One should always have a stop loss. It shields you from holding on a losing trade. You usually place a stop loss below a support.
The second order you should use is the take profit. This will ensure that you once your target is hit, you get out of the market. It is greedy to leave open transactions. Place the take profit at a resistance.
You can use the liquidity to your advantage. The liquidity of a future can be determined through open interest or the volumes traded. That information is free at the papers or from your broker. Take advantage of that. Liquidity calls for trading the futures that are actively traded. They can be bought or sold without people staying out of this market.
Choose a future that is highly liquid. This will give you the chance to offset the future when you want. A liquid future is the one that is actively traded. You should find out the risk appetite of the future that you want through the volumes and through the open interest. Both indicators are usually in the public domain.
Timing is of outer most importance in trading. One has to time when the market is changing in the trend. Anticipating for the best price will serve you the best. This is to avoid the short run losses that may occur. All the successful traders are good timers. A contract should be bought or sold after the confirmation of the change in trend. The spread should also be considered. Remember to trade the futures that investors and traders have high appetite for.
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