Beginner's Guide To Trading Futures
  1. Beginner's Guide To Trading Futures: Introduction
  2. Beginner's Guide To Trading Futures: The Basic Structure of the Futures Market
  3. Beginner's Guide To Trading Futures: Considerations Prior to Trading Futures
  4. Beginner's Guide To Trading Futures: Evaluating Futures
  5. Beginner's Guide To Trading Futures: A Real-World Example
  6. Beginner's Guide To Trading Futures: Conclusion

Beginner's Guide To Trading Futures: Introduction

Welcome to the Beginner's Guide to Trading Futures. This guide will provide a general overview of the futures market as well as descriptions of some of the instruments and techniques common to the market. As we will see, there are futures contracts that cover many different classes of investments (i.e., stock index, gold, orange juice) and it is impossible to go into great detail on each of these. It is, therefore, suggested that if after reading this guide you decide to begin trading futures, you then spend some time studying the specific market in which you interested in trading. As with any endeavor, the more effort you put into preparation, the greater your odds for success will be once you actually begin.

Important Note: While futures can be used to effectively hedge other investment positions, they can also be used for speculation. Doing so carries the potential for large rewards due to leverage (which will be discussed in greater detail later) but also carries commensurately outsized risks. Before beginning to trade futures, you should not only prepare as much as possible, but also make absolutely certain that you are able and willing to accept any financial losses you might incur.

The basic structure of this guide is as follows: we will begin with a general overview of the futures market, including a discussion of how futures work, how they differ from other financial instruments, and understanding the benefits and drawbacks of leverage. In Section Two, we will move on to look at some considerations prior to trading, such as what brokerage firm you might use, the different types of futures contracts available and the different kinds of trades you might employ. Section Three will then focus on evaluating futures, including fundamental and technical analysis techniques as well as software packages that might be useful. Finally, Section Four of this guide will provide an example of a futures trade, by taking a step-by-step look at instrument selection, market analysis and trade execution. By the end of this guide, you should have a basic understanding of what is involved in trading futures, and a good foundation from which to begin further study if you have decided that futures trading is for you.

Beginner's Guide To Trading Futures: The Basic Structure of the Futures Market

  1. Beginner's Guide To Trading Futures: Introduction
  2. Beginner's Guide To Trading Futures: The Basic Structure of the Futures Market
  3. Beginner's Guide To Trading Futures: Considerations Prior to Trading Futures
  4. Beginner's Guide To Trading Futures: Evaluating Futures
  5. Beginner's Guide To Trading Futures: A Real-World Example
  6. Beginner's Guide To Trading Futures: Conclusion
RELATED TERMS
  1. Futures Exchange

    Traditionally, a term referring to a central marketplace where ...
  2. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  3. Managed Futures Account

    An account that is like a mutual fund, except that positions ...
  4. Interest Rate Future

    A futures contract with an underlying instrument that pays interest. ...
  5. Forwardation

    A term used in pricing futures contracts. Forwardation is a ...
  6. Wide Basis

    A condition found in futures markets in which the spot price ...
RELATED FAQS
  1. What types of items can you buy futures for?

    Learn what items futures may be purchased for, what a futures contract is and discover how the futures markets have greatly ... Read Answer >>
  2. What do the S&P, Dow and Nasdaq futures contracts represent?

    Every morning before North American stock exchanges begin trading, TV programs and websites providing financial information ... Read Answer >>
  3. What types of futures contracts are typically sold on an exchange?

    Explore the wide variety of available futures contracts traded on exchanges, which range from agricultural commodities to ... Read Answer >>
  4. How have futures performed historically?

    See how futures products have historically performed and why they tend to perform best at specific times during a normal ... Read Answer >>
  5. What are managed futures?

    Managed futures are futures positions entered into by professional money managers, known as commodity trading advisors, on ... Read Answer >>
  6. How risky are futures?

    Understand how futures contracts are trading and learn what aspect of futures trading poses potentially greater risk than ... Read Answer >>

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