Futures
Trading Tips
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1
- Do educate yourself first.
"Don’t
jump in the water if you don’t know how
to swim." There are many quality books and
trading manuals available that will teach
you the dos and don'ts of trading. Use these
resources to accumulate a working knowledge
of the commodity markets before you start
investing your hard earned money. Understand
what your getting into.
2
- Don't buy into an expensive trading system.
These so-called experts, who want to sell
you their "trading secrets" for thousands
of dollars, will usually leave you too dazed
to even keep track of your losses. If someone
has a system worth selling for that much,
they would keep it a secret! There are many
quality instructional trading manuals that
sell for a few hundred dollars or less that
will contribute much more to your education
and long term success.
3
- Do have a trading plan.
Before ever entering a market, you should
know what you can make and what you are
risking. From a profit potential standpoint,
you want to set preliminary targets and
possibly a level to exit the trade. Know
how you are going to react to a move in
any direction..
4
- Do be disciplined.
Maintain your original strategy. Trading
decisions should be based on sound analysis,
not emotion.
5
- Don't ignore fundamentals.
Technical trading works. But even the best
market formation and trading system can
be over-run by a dramatic change in supply
and demand. Remember, the law of economics
will ultimately decide a commodity's price.
The most successful traders are always aware
of current technical and fundamental events.
6
- Do use stop-losses.
Whenever
you enter into a trade, you should already
know where you expect that market to go,
and what the most is you'd be willing to
risk on that trade.
7
- Do be patient.
Unless you're "day trading," don't get in
and out of the market too often. New traders
especially, tend to enter into a trade based
on intermediate- or long-term strategy,
but then change their mind back and forth
with every tick in the market.
8
- Don't trade from a newspaper.
The paper is typically a great place to
keep up with local events, and maybe even
sell your car. It is not however, good information
to use as your trading indicator. Hence
the adage, "Buy the rumor, sell the fact."
9
- Do expect losses.
Even the best traders are wrong sometimes.
Don't get down on yourself. Be disciplined
and stick to your long-term trading plan.
10
- Do study your losing trades.
Learn from your mistakes and misinterpretations.
Go back over the trading signals that prompted
you to enter the trade. This is how you
learn to trade.
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