So let us say that today is the day that you have decided to
become a commodity futures trader. Trading can be an exciting and sometimes frustrating avenue to make money. The daily swings of the markets can be an exciting part of a trader’s day, but it can also be the most frustrating part of the day. In the days of trading before the internet, there was a great deal of misunderstanding regarding commodity trading. Futures trading was considered a rich man’s game, but today you can obtain information nearly instantly online with a trading platform data-feed, and you can know exactly where your trades stand at any given minute. However, to assist you in becoming a successful trader you may want to follow some of the helpful tips to keep you going.
Plan
You need to have a strategy to be successful. Even the worst of plans will potentially work better than no plan at all. You can start with a short-term plan that can get you going. That plan will give you a starting place and a chance to learn some of the basics of
being a futures trader. As you learn more about making trades you will gain more confidence, and then you can start making trades that are more sophisticated. Although it can be exhilarating to make trades that are exotic, you should start your trading with a plan.
Research
To be a trader you have to do a great deal of research. The type of research that you need to do is not just discovering which types of trades to make day to day, but you need to research websites that contain information on commodities trading.
Finding a website that you feel comfortable with is vital to your success. You also have to do research to know when to buy and sell contracts. You will also need to know the different types of trades that are available for you to make. Some of them are not easy to understand, and you will want to make sure you know how different contracts work.
Practice
Many websites offer you a chance to practice your strategy. You can make real-time demo trades without spending any money. You will not make any real money, but you can work your plans and discover how your strategy holds up in a demo environment. You can also learn about different types of futures contracts you can trade. You may find that you are successful with trading certain commodities and not so successful with others. You may also find out that you are good with different types of contracts, but you may not find out which futures contracts are best suited for you without demo practice trading.
Change up
Do not be afraid to change things that you are doing. Sometimes you can get into a rut as a trader. It happens to people in all kinds of professions.
For a futures trader it is no different. Sometimes a change means to take a step away from the game. This could mean not reading about futures or anything associated with trading for a while. When you are refreshed, you can look at things with a completely new perspective, and hopefully you can see where you are strongest and take advantage of that knowledge.
Do not sweat the small stuff
Sometimes things do not go the way you expected them to go. That is how things work in life. As a trader, you have to keep your head about you. Sometimes the market fluctuates faster than you expected. In addition, sometimes the market moves more slowly than you planned, but you cannot let that bother you. Allowing the trends to stay with you mentally may cause you to make poor decisions that are detrimental to your bottom line. You have to always keep the bigger picture in mind, and by keeping the bigger picture in front of you, the smaller day-to-day stuff will be exactly what they are supposed to be, minor challenges that are like small bumps on a long road.
Trading commodity futures can be an exciting endeavor. It is nothing that you can take lightly, because you can lose a lot of money very quickly. New traders must keep a few things in mind. The biggest thing is to build a plan and stick with that plan. Sometimes the plan may not work, but if you remember the bigger picture, you may figure out a way to succeed as a trader. It is not an easy process, but futures trading can be profitable, and more importantly, you may be able to enjoy trading futures.
Disclaimer - Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.