Online Futures Trading -cfd And Forex

Written by BK Shaw
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If you have guts and money, there are few pursuits more exciting than online futures trading. You can make or lose a lot of money in these markets in a short amount of time. When you trade in the futures markets, one thinks primarily of trading commodities. The futures markets were set up originally to help farmers and other commodity producers protect themselves against price fluctuations.

As the speculator, you inherit the risk or the other side of the trade. The holder of the cash commodity is of course concerned that prices will drop. If you are a farmer with acres of corn, the last thing you want to see is a drop in price before you take your crop to market. So the farmer bets on corn prices dropping to hedge his risk; the small speculator bets on prices going up. If corn prices drop, the farmer offsets his losses in the futures market, and if prices go up, he makes up for it with his cash crop.

Naturally, you don't always have to bet on the price of a commodity like gold, or corn, or oil to go up. You can bet on prices going up, down, or even sideways. If you are right you can make money, and if you are wrong you will lose money. With the advances in technology, having an online futures trading account is a most viable method to trade.

Before Starting Online Futures Trading

I recommend trading through a brokerage firm especially if you are new to the commodity markets and online futures trading. Even if you want to trade your own account, it's useful to get a newsletter, or at the very least some type of trading tips. When you're trading in these markets information is everything. If you're anything like me, you will become a news junkie, and you will become addicted to your online futures trading account.

When you sit down to choose your commodity brokerage, make sure you do a background check on the firm. You can check out a commodity brokerage firm at the National Futures Association and they have a website. If the firm has been sued, there will be a mark of that on the company's record. Additionally, brokerage firms are audited every year and can be penalized as the result of an audit.

Always try to go with a brokerage firm which has been around for a few years. I would want my brokerage firm to have been around for at least three years. You want to know they can handle the ups and downs of trading in these very fun, volatile markets. A long series of losing trades can be enough to put anyone out of business!

Benefits of Online Futures Trading

You can trade in your pajamas! I had to show up at an office in a suit every day, and I would have been much more comfortable trading from home with an online futures trading account. Technology has advanced so far, it's possible to get live streaming quotes right to your laptop. You can also subscribe to a decent news service like Bloomberg and have that on your desktop as well.

Many commodity brokerage firms will set up an account for you and then allow you to trade through their platform. You can subscribe to a service which will allow you to have access to a broker in case of emergency. I recommend using the services of a broker if there are times you will not be able to watch the markets. I most certainly recommend using a broker if you have never traded in these markets before, so that you can make the most of your online futures trading!

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