Online Forex Trading

Beginners Guide to Futures Trading Platforms

State of the art futures trading platform is a prerequisite for success in commodity forex trading. A future trading platform or online trading software is the most essential tool for any trader for carrying out plethora of functions. Efficient order management, live charts, real time market quotes, commodity forex news and analysis – these are few of the necessary elements required by a trader for commodity forex trading.

Futures Trading Platforms

Majority of the commodity forex brokers provide fully integrated and customizable futures trading platforms without levying any additional charges or license fees. Some of the brokers may grant free access only for web based or browser based trading software but for java application based software they impose one time license fees or insist on minimum commitment on brokerage business.

What should you expect from futures trading platforms?

Look out for a state of the art futures trading platform that works on application based software and that offers:

  • Multi segment platform that can allow trading across various exchanges and markets such as E-Minis, Globex commodities and forex, pit traded commodities and many other global futures markets.
  • Live streaming quotes, market depth, multiple market windows, fast, reliable and efficient order management.
  • Facilities to trade directly from the charts.
  • Surfeit of technical analysis, charting and other analytical tools like options calculator and currency converter to develop trading strategies.
  • Real time access to global news, fundamental research and technical analysis.
  • Demo version with a demo user id and password. It helps you get a complete idea about various features and functionalities of the futures trading platform.

A Brief Outline on Futures Trading Strategies

All the futures market work on the fundamental tenet “Buy Low Sell High”. Speculators, Arbitrageurs and Hedgers are the main participants of futures markets. There are various types of trading approaches employed by market participants depending upon the ultimate goal. Speculators are the most important participant of the futures markets who look to profit from speculative trades. In order to generate profitable trades, speculators use various futures trading strategies.

What is meant by futures trading strategy? Essentially, it means a stratagem or a line of action or a plan to take positions in single or multiple trades with an ultimate objective of profit. Technically speaking, futures trading strategy is a set of rules and plans used to identify and trade in potentially profitable position.

What are the various futures trading strategies? Well, there are dozens of strategies that have evolved over a period of time. Depending upon the course and direction of the markets, different types of futures trading strategies are applied by the futures traders. Futures trading strategies can be categorized into two types – Basic and Advanced or Aggressive.

Basic strategies include the simplest tactics of futures trading. Go Long – Buy in anticipation of rise in the price and sell when the price increases to earn the profit. Go Short – Sell in anticipation of drop in the price and buy when the price falls to earn the profit.

Advanced strategies comprise of multitudes of approaches wherein a trader takes position in combinations of futures and options. Spreads, bull spread, bear spread, calendar spread, covered call, strangle, straddle are few of the commonly employed trading strategies.

Futures trading strategies have to be decided based upon individual trading style and goal, risk capital, market trend, trading platform and trader psychology. You should never stick to one trading strategy. You must change your strategy if you are not consistently making profit from it. Depending upon your expertise and experience you can try basic or aggressive futures trading strategies.