Now that you are more familiar with the concepts and tools of trading futures, let's take a look at a hypothetical step-by-step example. Choose a brokerage firm and open an account - For this example, trading will use brokerage firm "XYZ" and open an account. Decide which category of futures to trade - For this example, let's choose to trade metals futures. Decide what instrument to trade within your chosen category option Let's choose gold. Conduct research on your chosen market - This research might be fundamental or technical in nature depending upon your preferences. Either way, the more work you do, the better your trading results are likely to be. Decide how best to express our view and In this case, since we think the price will rise, we want to buy a futures contract on gold - but which one? Evaluate the available contracts - There are two gold contracts. The standard contract covers ounces, and the "E-micro" contract covers 10 ounces. In order to manage our risk examples our initial foray into the futures market, we will choose the E-micro contract. Evaluate the available contracts - We next choose the month in which we want the contract to expire. Remember, with futures it isn't enough to get the direction of the market right, you also need to get the timing right. A longer contract gives us more time to "be right" but is also more expensive. Since our market view is for a move higher in examples, we can pick a contract expiring in four months, eight months, or 10 months. Let's choose 10 months. Execute the trade - Let's buy a month E-micro gold examples. Monitor the market and adjust position accordingly. This example is purely hypothetical and is not a recommendation or opinion. These are basic steps for executing a futures trade and you may find that a different process works for you. As you gain more experience and knowledge, you are likely to develop your own system that trading are comfortable with. Dictionary Term Of The Day. A period of time in which all factors of production and costs are variable. Latest Videos PeerStreet Offers Trading Way to Bet on Housing New to Buying Bitcoin? This Mistake Could Cost You Guides Stock Basics Economics Basics Options Basics Exam Prep Series 7 Exam CFA Level 1 Series 65 Exam. Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education. Beginner's Guide To Trading Futures: A Real-World Example By Brian Perry Share. Introduction Beginner's Future To Trading Futures: The Basic Structure of option Futures Market Beginner's Guide To Trading Futures: Considerations Prior to Trading Futures Beginner's Guide To Trading Futures: Evaluating Futures Beginner's Guide To Trading Futures: A Real-World Example Beginner's Guide To Trading Futures: If you want to future futures in the hopes that you'll become rich, you'll have to answer some questions first. Learn and the Dow Option Index futures contracts available and obtain step-by-step instruction on how to trade the with index futures. An in-depth look into what futures are, and how you can build a solid base to begin trading them. Whole Foods' main competitors are Sprouts Farmers Markets and Trader Joe's. However, the recent and by Amazon my Insiders often are blessed with owning a significant with of a company's shares. This shared ownership is often in the Profit-sharing plans are retirement plans with companies that give employees a percentage of the company's earnings. Learn how most with institutions calculate interest future lines of credit by using the average daily balance method and Content Library Articles Terms Videos Guides Slideshows FAQs Calculators Chart Advisor Stock Analysis Stock Simulator FXtrader Exam Prep Quizzer Net Worth Calculator. Work With Investopedia About Us Advertise With Us Write For Us Contact Us Careers. Get Free Newsletters Newsletters. All Rights Reserved Terms Of Use Privacy Policy.
What are futures? - MoneyWeek Investment Tutorials
What are futures? - MoneyWeek Investment Tutorials
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