A lot is going on in the futures markets. So far this year, stock index futures have soured and recovered, amounting to billions of dollars worth of market activity on each and every trading day.
And for energy market futures, contracts have soared by 20% to near 50% for major markets. For metals markets, futures have seen even greater price movements amounting to over 60% for the year to date.
For agricultural contracts, there is more of the same, meaning massive gains in price and value in these markets.
But before you enter these markets, including others such as for digital currencies, you need to know exactly how these markets work.
And today, I’m providing an introduction with some follow-on links to help you do just that.
Futures Contracts 101
Futures contracts are just that… Contracts for buying and selling a commodity at a future date. The futures market allows us to trade the value of those contracts without actually dealing with the commodity itself.
There’s a lot of money in futures contracts. Traders transfer millions of dollars worth of future contracts every day.
So, it stands to reason that getting as much information about futures as possible will help you learn how to navigate such a popular marketplace.
Now, let’s look at how we can work toward building a solid futures portfolio while managing our risk…
What Are Futures Contracts?
Futures, as the name would denote, are contracts executed at a future time. It is a contract that two entities agree upon.
Many things can happen before the transaction is completed, even if the contract continues to run at a constant pace until the execution date.
Futures trading takes place throughout the period of time between execution and settlement.
During this period, both parties might sell their halves of the contract to get additional money.
You buy and sell contracts through a broker. These brokers have online platforms that allow you to place trades. This platform will have a chart of the futures contract.
You have the option to buy or sell with a simple press of a button. Their platform makes it easier to navigate and monitor your trades.
There are a lot of things you need to learn about before diving into futures trading.
Recognizing market trading patterns is one of the most important things you need to understand before becoming a successful futures contract trader.
If you can’t spot the winning opportunities in the market, you’ll risk losing a lot of money.
Using time frame charts to plot your entry into a market is also crucial to making money with futures trading.
And these are just a handful of the things I can teach you if you take the time to follow my strategy!
The Next Step
Futures trading can seem intimidating. And it’s totally understandable why so many people get nervous with futures contract trading.
But there are ways to approach the market that allow us to make trading less complicated.
Of course, my strategy will only work if you use it! It’s won a lot of trades over the years.
Now it’s time that you leverage my knowledge of the market to your advantage. So, be sure to check out my free resources to learn more.
Then, look for the next edition of Josh’s Daily Direction in your email inbox each and every trading day for more of my futures contract trading tutorials as well as some additional trading ideas!
And if you know someone who’d love to make this a part of their daily trading routine, send them over to joshsdailydirection.com to get signed up!
Keep On Trading,