Planning Ahead Trading Futures

The following was written by Kimberly Pabillon, a Commodity Broker with Cannon Trading since 2009

Trading futures requires research of particular markets (planning ahead and analyzing market behavior), a well thought out strategy when it comes to trading a particular futures market, and finding the right futures trading platform that allows you to execute your trading strategy. There is no Holy Grail or one right answer when it comes to trading futures.  Many new traders think that trading in and out of the market for a one or two tick profit target will make them a large sum of money. And that’s definitely not the case. Futures markets can hold some what unpredictable terms when trading.

Before new and old traders take the dive into futures trading, traders want to make sure that they have done their research about the particular futures markets they are looking to trade. Keeping a daily journal of market behavior of a particular futures market can be very helpful when coming up with a trading strategy. Analyzing how a particular market behaves when certain reports are released and taking note can help a trader see market reaction with particular reports and numbers. You may also see a future trader’s chart littered with many studies. This can be distracting to many traders. Find a few studies that work well with your strategy and stick with those instead of adding studies you hear about from educators or other traders alike. No trader needs the extra noise on their chart if it’s not applicable to their trading strategy.

After a futures trader has planned ahead and has a strategy that works well for him/her, find a futures trading platform that allows you to execute your strategy, but most important find a platform that you are comfortable using as well. Many new futures traders get excited about implementing their futures trading strategies once they have come up with one. But some traders’ mistakes are not knowing how to use the trading platform properly or don’t feel comfortable placing trades on the futures platform. Please keep in mind if you are not comfortable with the futures trading platform you are using, it may be best to take a few days to place a few demo trades and learn all the features and functionalities the platform has to offer before trading live.

Trading futures is an ongoing learning process and there should never be any rush to trade with your real money if you do not have a strong grip on the fundamentals of futures trading. Make sure to plan ahead, take your time your strategy, and keep learning because the futures markets are constantly changing.

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.