Online Futures Trading For Novices
Futures trading, like any lucrative earning opportunity, involves high risks. Online futures trading is no different – its convenience tempts many people to treat trading like a Vegas casino instead of a legitimate investing opportunity. With this in mind, following are some pointers on succeeding in the online futures trading jungle:
Are you a long-term investor or a day trader? If you decide you’re a day trader, then keep up with your trading account on an hourly basis. If you decide you’re a long-term investor, then it is important that you resist the urge to check your account every hour or even every day, because short-term trends that are useless for your purposes may tempt you to trade when it is unnecessary or even harmful to your long-term interests.
Don’t gamble with grocery money. Decide how much money you are willing to put on the table in advance, and stick with this budget no matter how fast you lose it. If you don’t, online futures trading will become a vice that will put you on the street in no time. And if you’re a beginner, stay away from highly fluctuating markets – you might want to consider starting with mini-futures.
Quit while you’re still ahead. Nobody likes to sell after a good run, but in this game you should sell off a good run as soon as you spy a negative trend. If you don’t then your new trading profits can grow wings and fly like a bird. Of course you run the risk of the “left behind blues” if your former acquisitions continue to appreciate. Getting out while you’re still ahead is particularly important for day traders. The long-term investor needs to be concerned with weekly and monthly trends, not short-term peaks and valleys (unless, for example, you’re trading coffee futures and there’s a coup d’etat in Brazil).
Keep a good attitude. If you’re a beginner, you will probably lose the futures trading game at first. Think of it as tuition.