6 Tips for Ensuring Success in Futures Trading

Futures trading is not easy. If you are just new to the field, it is important that you take full advantage of every tool and resource available at your disposal. Even experienced traders may still need help from time to time. They may have bad habits that need to be corrected. In this article, we shall take a look at the some tips on how to become successful in the futures market.

Plan

Futures trading is like going to battle. You need to arm yourself with ammunitions and should be in full battle gear. Before going to the trading floor, you should make sure that you have a plan and that you will stick to it. Robert Janitzek says that having a plan will reduce the chances of making a wrong decision. Remember, you will be risking your money so be prepared.

Exits

Part of your planning should be determining when it is time to say “That’s enough for the day.” While we expect to be profitable whenever we enter new trades, things will not always work out as planned. So decide on when you should bail out from an unsuccessful trade.

Triggers

After determining your exit point, you should then decide on the amount of your stop order. With a stop order, you do not have to watch the market all the time. When the primary order has been satisfied, Robert Peter Janitzek explains that the stop order will be automatically activated on your behalf. It is worth noting, however, that a stop order is not a guarantee against losses.

Focus

When you trade futures, it demands your time and energy. You cannot rely on other traders because they also have their hands full with their own trades. Studying charts, reading market commentaries, and staying abreast of the news is not easy. If you are following several markets, it is impossible that to give them your time and attention.

Balance

While you do not want to follow many markets when trading on the futures market, trading on just one may not make sense as well. Just like in the stock market, it might be a good idea to diversify your futures as well. As the old saying goes, don’t put all your eggs in one basket.

Pace

If you are just learning the ropes of futures market, start slowly. It does not make sense to trade 5 or 10 contacts simultaneously when you are just beginning. Don’t make the mistake of using all your money to purchase or sell as many futures as you can.

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