The idea of futures day trading is extremely lucrative for investors. This form of investing has been around for decades, but only recently has it become so accessible to everyday investors. In fact, day trading on the futures market has become so popular that many major financial institutions are starting to trade futures on their own. This means that nearly every financial firm has some type of futures business. In turn, this opens up a massive market for people with an interest in investing to make a profit.
Unfortunately, many new futures traders are unfamiliar with how to read the market. Consequently, they wind up losing money in day trades. Therefore, with only a small $15,000 account and a good futures day trading system, you could make about: About a 18% return per month or about a thousand dollars a year.
Obviously, the type of futures trading that I am referring to is day trading. In short, day traders buy and sell futures contracts. As the name suggests, there are very high fluctuations in price during day trades. Volatility is one of the main considerations that a day trader needs to take into account when investing.
Volatility can be measured by two measures: price and risk/reward. Each measure is an attempt to quantify how much money can be made on a trade. For instance, a stock that trades at a price of two dollars per share would have very little volatility. However, if that stock was to be sold at four dollars per share, it would have a much larger volatility. Obviously, it would be much easier to make money on these trades if they were fewer in number.
There are many types of futures for day trading. Commodities contracts for specific quantities of a given commodity. Examples of common futures contracts are petroleum, gold, silver, wheat, corn, and so on. Futures contracts are usually made by oil companies, mining companies, and other industries that need to rely on a steady supply of raw materials. Usually, commodity futures are much harder to determine and monitor than stocks since the supply and demand of a commodity is unpredictable.
Stock market futures refer to an agreement between a seller and a buyer. The idea is that a buyer will make a purchase of a predetermined number of shares from the market maker. The market maker is obligated to deliver the requested amount at a certain price on or before a certain date. Typically, a day trade futures contract will give day traders the opportunity to speculate on the movements of the market maker.
In general, day trading futures offers day traders more flexibility in determining their trades and profits than stocks do. In addition, futures allow for intra-day trading, which means the trader can enter and exit trades during the same trading day. These trades are not covered by standard short term insurance plans, such as stock options, which are often used for intra-day trades. However, because day trading futures involve higher risks, day traders should take care to carefully select their online broker.
Once a trader enters the futures world, he or she should familiarize themselves with the terminology of the market. To do this, the trader should read about the types of markets, including commodities, indices, currency pairs, and futures markets. A good online futures trading platform will allow the trader to enter the markets as an amateur. Before placing any trades, the trader should ensure that the platform that they will be using offers excellent customer support and money management systems. Also, the trader should ensure that they understand the terms and conditions of the trading platform.