Having clear trading goals can help a new futures trader guide his or her investments and measure their success. A commodities broker can assist them in defining their goals and creating a plan to achieve it.
What are my goals in trading commodity futures?
How much do I really know about the behavior of the futures markets?
What am I looking for in a futures broker?
Do they have competitive commission rates?
A commodities broker should specialize in trading U.S. treasury bonds, stock indices, foreign currencies, precious metals, crude oil, agriculture, and other products on the futures and commodity exchange, including futures options. A seasoned broker create and tailor strategies to fit every future trader’s style of trading and risk tolerance. Whether you are new to the commodity futures markets or have been trading for a while, you are probably using the Internet to gather information, compare commission rates, and eventually to choose a commodity broker.
A general objective for futures trading, such as income generation, is nice to read but unhelpful. Simply earning an extra cent is enough to fulfill this goal, which can lead to extreme conservatism in investments. On the other hand, new traders may make risky plays in the quest for more income. And even if they did make money, they are unable to appreciate it because they “lost” potential income, if they mistimed their sell order.
Concrete goals can help the rookie futures trader avoid these pitfalls. However, it’s very difficult to formulate these goals when he has very little basis for his expectations. He can’t tell whether $10k in a few months is reasonable or even achievable.
A commodities broker has considerable knowledge and expertise about trading in futures. He can give the new futures investor advice about his trading goals and how to obtain them. The broker can correlate the investment capital with the desired income and the timeframe, while accounting for the fickleness of the market. Additionally, he can recommend a trading style, such as Scalp, Swing, or Trend trading, and an investment strategy to achieve this objective.
For example, the trader can adopt the goal of earning twice the initial investment within three years using a simple trend trading style, where the investor attempts to keep the commodities when they are on an upward trend and sell when it reverses.
Once the goals are set, the new investor can easily make trading decisions that will help him achieve his goals and not worry about the short-term upsets if the road to his goal is still visible.
Futures Trading can be overwhelming for newcomers who are just venturing into the field, but with the help of a professional futures broker, traders might have a better chance of achieving success in the field of commodities trading.
There is a substantial risk of loss in trading commodity futures, options, and off-exchange foreign currency products.