Futures Trading Systems

Written by BK Shaw
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There are several futures trading systems out there. I have been known to laugh at some of them. I recommend keeping systems to a minimum and keeping them as simple as possible. Most people lose money trading in these markets, and so the best system to have is one which has a sense of humor!

The bottom line is you must be able to cut your losses short. Know how much you are willing to risk at all times, and just as importantly know how much you want to make. It is common knowledge that most trades in these markets will lose, and so if you are to be able to trade for any length of time, it is essential that your winners make up for your losers. Having said that, don't get greedy, because you know that pigs will go to the slaughter house eventually!

If you are using options in the commodity markets to bet on price, I think it's imperative to not hold onto the option too long. If you buy options, then a good strategy is to hold the option for only half its life expectancy. You will want to see the price movement you're looking for by that point, otherwise time decay will set in, and even if you see the price movement you thought you might see, it may not be enough on the last day of trading to give you a decent profit. I don't recommend using complicated futures trading systems with options on the commodity markets.

Choosing your Futures Trading Systems

Find a broker you trust, or you will have a lot of reading to do. There are so many ways to trade these markets and plenty of futures trading systems to try out. I think keeping it simple is a lot of the fun, but it's your money at stake!


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