How can you make Hard Earned Easy Money through Trading Futures

Futures trading denote that the stocks are to be traded in the near future in a certain amount that has been decided earlier. A futures contract or futures trading is an agreement to buy or sell an asset at a future date at an agreed-upon price. These are standardized agreements that typically trade on an exchange. The agreement depends on buying the securities or commodities on a given date and time.

How will futures trading fare in the future?

Futures are regarded as the stocks that have the potential to fetch a high selling and reselling value. In general hedges and hedge funds use futures for protection against adverse future price movements in the underlying cash commodity.    Hedgers are the business houses or the individuals who deal in the underlying cash commodity. The trading depends on the trader’s judgment as he can make a faster judgment on future prices as these prices tend to change up fast as compared to real estate stock prices.

Futures being highly leveraged financial instruments for investments. The margin is a security that the investor has to keep with the exchange in case the market moves opposite to the position that has been taken and the losses that have been incurred. This may be more than the margin amount, in which case the investor has to pay more to bring the margin to the maintenance level.

Due to the markets being liquid the contracts are traded in huge numbers. The presence of buyers and sellers in the future markets ensures market orders can be placed. The near maturity contracts do not fluctuate easily and hence the contracts are the best buy option.

Commission costs on future trades are very low and are charged when the position is closed. The total brokerage is around 0.5%of the contract value. However, it depends on the level of the service provided by the broker.

Make faster money because the amount that the speculators speculate can earn you enough and quick money the trading is done with 10 times the exposure than the normal stocks.

Futures are great for diversification or hedging: These are very important vehicles for hedging or managing different kinds of risk. Companies engaged in foreign trade use futures to manage foreign exchange risk, interest rate risk by locking in an interest rate in anticipation of a drop in rates if they have a sizeable investment to make.

Benefits of Online Trading System

Online trading is the new age process where technology meets trading. Money making us much easier in this version of trading and requires no middlemen to complete the job. Though equipped with so much there is still some amount of risk involved and if that risk is carefully handled it leads to huge amount of profit. Let’s take a look at the benefits of online trading system:

Eliminating the middleman – It is absolutely true that share or stock trading requires a middleman or a broker. But online trading is one of the options where the middleman or the broker is not allowed. It completely eradicates the term middleman from the business.

Great Investment Control – One of the major advantages that online traders avail is trading anytime they want. Online traders have the facility to invest anytime and withdraw anytime. It allows instantaneous transactions. They can review any of their options instead of depending upon their broker.

Monitor your investments in real time –It allows you to keep a track on your investments on a real time basis. You can login from anywhere and get the information of your stocks. Synchronizing your mail id with the respective stock index you can get the information at any instant.

Access to online tools – Online tools allows trader to keep a track on their trading methods. These tools give ready and immediate access to valuable information, including investment performance charts.

Rate Cuts – This particular form of trading is the direct form of trading and the price for the whole process is absolute that means, the amount involved in trading stocks online does not require middleman so the price of the stock or share is absolute and no extra amount is to be paid. That predominantly means that the price of the stock is absolute. The commission of the stock broker in case of online trading is nil. You won’t get a middleman to quote his/her price.

Trading is a great form of investment but can be quite intimidating if we think about its various prospective. Getting good returns within the few investments can turn you into an addictive trader and you can land into trouble with some bad trading options. So, it is always advisable to trade on a professional’s advice.

Online Trading System – The New Age Business Formula

Online trading system is the trading system which involves internet rather than physical transaction of funds. It is the act of buying/selling orders for financial securities/currencies with the use of brokerage’s internet based proprietary trading platforms. The use of it increased dramatically in the late 90’s when people got to know about computers and various electronic devices. High speed computers and internet connections gave the concept of online trading. The platform for online trading system is provided by internet based brokers and available to everyone who wishes to make money from the market.

Benefits of online trading –

Lower Fees – One of the best advantages of online trading is the reduction in transaction costs and high fees associated with the traditional brick and mortar brokerage firms. If we take a closer look at shares and stocks price, online trading platforms offer cheaper rates as compared to brokerage firms which are physical in form.

More Control and Flexibility – As time is a major factor in the trading system so speed plays an integral role in carrying out the transaction. This is why the online platform is used to trade stocks and derivatives.

Ability to avoid Brokerage Bias – Breaking the brokerage bias by trading online is a simplified way of avoiding brokerage bias.

Accesses to online tools – If we ever look at the stock prices then we will find out that trading online has a cheaper price attached to it.

Monitoring Investments Real Time – The platform gives us an outlook of the daily making and losing of money through real time monitoring. It can make us aware of the stock prices and bonds through email or a call.

Disadvantages of Online Trading –

Easier to invest and in hefty volume – Large volume of stocks are invested through online platform as it is easy to buy and sell shares even while in bed. There is always a risk in investing in poor stocks as this will hamper the investment choice.

No personal relationships with the brokers – Trading on your own would be deterrent as this will lead to making bad investment choices. Brokers help in making the right decision in buying the right share.

Internet Dependent – Risk of losing out on a profit enabled share is really high. It is equivalent to living at the mercy of internet. If the internet is too slow then a worthy share may lose out in price.

Addictive in Nature – Termed as gambling trading, stock trading can be fatal if not supervised properly. A man making a profit at the start may find it substantial and materialistic but at the end of the day might have invested in shares that have zero value attached to them. So professional guidance is utmost required while trading online. 

The Importance of Having a Reliable Online Trading System

It cannot be stressed enough of how important it is to have a reliable and potent online trading system because it is an extension of your investing mind. Having a bad system is like having a bad car or a car with a bad engine. You will always break down and you will never get to your destination on time. Many people who do decide to trade online, in whatever commodities, make the common mistake that they do not insist on finding the best trading systems available. Some of them accept at face value the systems that come when they sign up with certain brokerages or financial companies.

There are also cases of financial companies recommending affiliate software to their clients because of the percentage in profits they get from the sale of the platform. All in all, these are not the most genuine and optimal ways for you to judge whether online trading software is reliable or not. Reliability comes from testing the software and reading about it and in fact, there are many circulars and websites that actually do review the popular trading software out there. Some of them even allow you to submit the details of the software, including the URL and they will let you know if it is worth the money or not. Firstly, a reliable trading platform will ensure that you maintain the right sort of communication matrix with the market of your choice.

This means that all the information will be displayed in a cohesive and easy to understand manner. Most of the good programmers out there also 'decode' the language of the market for the end user. There is a lot of compartmentalization and there is a lot of translation involved, crunching the raw data into easy to manage information. Good Online Trading Systems are also able to crunch numbers, profit projections, market movement, currency shifts, and percentage in points increase, price feeds, stock prices, and blue chip tags - all within its mainframe and present it to the investor. This is extremely important because content and information is king when it comes to making a good investment decision. 

A Detailed Overview & Explanation on Futures Trading

Futures trading or commodity trading first started in Japan and in Holland, somewhere in 18th century. In US, commodity trading started by establishing a commodity market place in 1840s century. The market offered both sport delivery and futures contracts. Futures trading differ from spot trading in different aspects. Spot trades are done for actual (and real-time) cash/product deliveries but futures are traded for hedging possible price uncertainties. Spot trades are done usually with a two-day cash delivery method where futures trades are done for usually 3 months durations. The futures trades for contracts which expire by next month or less is also often called spot trades.

The first products available for futures trading include meat, grains and live stocks. Later futures contracts for a variety of products were implemented including those for energy products, metals, currencies and currency indexes, stocks and stock indexes, and private and government interest rates. The CME (Chicago Mercantile Exchange) is responsible for the introduction financial features in 1970s, which very soon became the most traded futures type.

All futures have unchangeable contract specifications that are guaranteed by the clearing houses and margined to minimize counterparty credit risks. They are traded by open outcry of screen in public domain. Futures Trading contracts are almost similar to forward contracts, and often the names are used interchangeably, but forward contracts are typically traded OTC (over-the-counter) through issuer-client or broker-dealer interactions where futures are traded through centralized markets.

Commodity futures are the most common form of futures and are traded all over the world. With the passing of time new and new agricultural, livestock and metal/natural commodities are becoming available for futures trading. Futures options are, like stock options, the right to buy or sell futures contract on a certain price at a specific time. A call futures option is the right to buy a futures contract and put futures option is the right to sell a futures contract.

Stock features or single-stock features are futures contracts for owning an underlying stock. Stock features usually have greater leverage and the holders of futures do not receive/pay any dividends. Stock index futures are meant for multiple purposes like hedging, trading and investing. Hedgers for owning stocks or index options, traders for benefiting from price volatility, and investors for achieving certain goals by not directly owning the stock. 

Will the Best Online Trading Systems and Strategies Make You Successful?

If you want to be successful with trading on the internet you will probably naturally want to know what the best Online Trading System and strategies are. What you may not realize is that searching for these things may hold you back more than help you. Although a good strategy is important, any given strategy is not going to be the key to your success. Often the search for the best trading techniques ends up being a distraction that keeps traders from learning the skills that will lead to their success.

Trading is considered by many to be more of an art than a science. The strategies and techniques are just the tools like a paintbrush is to an artist. A great artist doesn't become a master at painting because he bought the best paint brush. A painter becomes great at his craft from practice and learning the skills of being a great painter. Too many traders spend their whole trading careers searching for that one technique that will make them a success instead of working on their inner game and refining their own personal trading skills. To master trading you must develop good trading habits and discipline and to keep your emotions out of your trading decisions.

This may sound easy but most traders avoid doing it thinking they will work on that stuff after they find that perfect strategy. But that never happens because without those skills no trading strategy will be likely to work. It's the same with a painter who never learned or practiced the art of paining but thinks he can be a master painter because he found the perfect brush. The only known way to get these skills is through practice. A great way to get that practice is with a forex demo account. The Forex is a great place to practice Online Trading System since the markets are always moving 24 hours a day. With a demo account you can practice with play money without any risk. You can focus on trading consistently and with discipline without worrying about whether you are losing money. It can take months or for some even years of practice to get these skills. Many traders don't have that kind of patience to practice that long but for those who do the rewards can be well worth it. 

Various Futures Trading Strategies and Tips for Effective Use of Futures

Every investment calls for caution, good understanding of the various options, market conditions and tips and strategies to be implemented to gain maximum benefit out of the investment. Trading in derivatives like futures requires extra vigilance and insight into its trading strategies. Let's look at specific Futures Trading Strategies that are proven to be beneficial. Futures are standardized contracts either to buy or sell a particular asset at a future date for an agreed price. The underlying asset can either be a commodity or in case of financial futures assets can be securities, bonds, currencies, stock indexes etc.

Strategies:

Position- Taking a position, either long (to buy) or short (to sell) on a futures contract is one of the most frequently used strategies. Going long entails buying a futures contract to hold till the price reaches the target and selling it in future for a profit.

Margin- Trading futures on margin is advisable. Usually a percentage of the contract value, as decided by the exchange, is paid as margin amount and price variations are adjusted to that margin.

Spread- This common strategy involves a trader buying and selling Russell 2000 Futures contracts for the same commodity. The main goal of the strategy is to take advantage of the difference in the cash and futures market. Spreads can also be used for different commodities.

Tips to Effectively Use Futures for Hedging:

·         As expiry date approaches, difference between the prices in futures market and cash market diminish and thereby hedging ability also lessens.

·         In case of contracts for physical settlement- delivery of the underlying asset, it is advisable to hold the position till maturity.

·         One must incorporate additional caution in case of hedging a position further than the expiry date in longest time to expiry contracts.

·         While taking out of a position, one must analyze the effect on margin.

Each kind of future contracts requires a unique Futures Trading Strategies, hence a comprehensive knowledge of futures trading is recommended.