FUTURES TRADING
A short introduction to Futures Trading at Pro Trading Course.
What is futures trading? Futures Trading is a form of investment which involves speculating on the price of a commodity going up or down in the future.
What is a commodity? Most commodities you see and use every day of your life:
- the corn in your morning cereal which you have for breakfast
- the lumber that makes your breakfast-table and chairs
- the gold on your watch and jewellery
- the cotton that makes your clothes
- the steel which makes your motor car and the crude oil which runs it and takes you to work
- the wheat that makes the bread in your lunchtime sandwiches
- the beef and potatoes you eat for lunch
- the currency you use to buy all these things
All these commodities (and dozens more) are traded between hundreds-of-thousands of investors, every day, all over the world. They are all trying to make a profit by buying a commodity at a low price and selling at a higher price.
Futures trading is mainly speculative 'paper' investing, i.e. it is rare for the investors to actually hold the physical commodity, just a piece of paper known as a futures contract.
Will I make more money with forex or futures trading?
Trading is all about strategies and picking the correct entry and exit points in a trade. All markets move in different ways everyday and as you can go long or short on any market there is always the opportunity to make money no matter what the markets are.
Trading futures does give you more options/ markets to trade so if the volatility in the currency trading is low then there may be opportunities in other futures markets that may be volatile. However, this does also give you the option to potentially over trade which can actually result in losing more money and as such making less. There is no real answer to this, great amounts of money can be made in both markets with the correct strategy being executed in the correct way.
