Think in Trading » Futures Trading

Coffee Futures Trading

Max — Fri, 26 Oct 2007 05:05:04 +0000

Coffee is one of the world's most popular beverages and is considered among the globe's most important of the commodities that are traded internationally. Today, the prime market for trading coffee, cocoa and sugar futures and options is the CSCE at the Commodity Exchange Center in New York. It has been in operation since 1993.

As an exchange, the CSCE is not responsible for the price coffee trades are set. However, what it does is supply a free-market and tangible venue wherein traders are able to make options and futures transactions under the laws and regulations stipulated by the Exchange.

All of the options and futures traded under the CSCE are uniform and that grade, delivery times, locations and quantities are constant factors.

The only item that is negotiable is price. With the environment espoused by the exchange, coffee prices and the prices of other participating commodities are allowed to hit their natural levels — a move that is often referred to as 'price discovery'.

Trading coffee futures has a strong demand because its supply is relatively abundant, depending mostly on weather conditions, that's why coffee is grown primarily in areas with subtropical climate.

Weather is one of the greatest influences in determining the world supply of coffee. Aside from the weather, the price of coffee in the trading market is also subject to consumer tastes and demands.

At times when price variations are at normal levels, coffee demand is deemed inelastic. What this entails is that when the price of coffee rises, people do not necessarily reduce their intake of coffee, and that even when the price of coffee declines, consumers also do not react much differently. However, if the increase is significantly great, there is a likelihood that demand would drop commensurately, as what happened in 1977 and 1976.

The price of coffee is thereby determined by a public consensus on the Exchange floor. This is called the 'open outcry', where traders bid vocally, to give an assurance that every trade is transparent and competitively completed. Within the 'open outcry', all participants are given the chance to either sell or buy at the best price available. After which, the Exchange will distribute the prices determined to different parts of the world.

Basically, there are two kinds of market participants on the trading floor: the investors and the hedgers. The investors are those people who seek gains based on changing prices. Their orders are usually coursed via brokerage firms, or futures commission merchants, or via commodity funds managed by CTAs, or commodity trading advisors.

On the other hand, hedgers are the commercial companies that trade in the futures and options market in the hope of reducing their risk against unfavorable pricing shifts in the actual market. What hedgers do is lock in rates for futures buys or sales. Some of the pioneering hedgers included coffee makers, importers and roasters.

There is still a lot more to be learned about coffee futures trading. However, if you've already had experience dealing with commodity trades, this should be easier for you. Coffee is a product that can be easily tracked and for which a lot of information is available. In fact, it is considered one of the safest commodities to trade in.

Trading Forex Futures

Max — Fri, 12 Oct 2007 15:03:43 +0000

Foreign exchange and futures trading are becoming more and more popular all over the world mainly because of the promise of the great rewards that go with it.

In the past, only major corporations and government institutions were able to cope with it due to the huge volume of trades that take place. Individual and small investors had been unable to participate because it was too overwhelming.

However, with the arrival of the Internet and the advancement of various tools of communication and correspondence, foreign exchange and futures trading have become within arms reach of many private movers and small timers. The Internet has allowed greater access to financial information that enables even individuals to make speculative investments, often without having to pay a single cent.

Forex trading, no matter what Web sites tell you about the behavior of currencies and futures, is not free from risks. As with anything in this world, particularly those that involve the exchange of value and money, there are certain pitfalls.

For instance, because currencies rise and fall nearly every second, what may be of maximum value at one time might suddenly transform into something nearly worthless at another.

Currency values in the foreign exchange market are highly volatile, so you must always be on your toes by keeping yourself updated with the changes every minute of the day. And since the forex market operates 24 hours a day, the monitoring could take quite an effort on your part.

You must also note that whenever one currency falls, another one surely goes up, because that's how it goes. Currencies trade against each other.

Therefore, in order for you to be on the safer side (note that we said 'safer', but not 'safe'), trade currencies that belong to the list of 'majors', such as the US dollar, the Japanese yen or the British pound. These monies are less likely to move too drastically because they are the most heavily traded currencies in the market.

A word of caution: do not engage in currency trading unless you're truly prepared to do so. The lures of high returns might cause you to want to jump into the industry without so much as a bat of an eyelash, but you have to get yourself in-the-know first before you proceed.

Failure to adequately understand how the system works will cost you a lot of energy and mountains of money, if you're not careful.

You can avoid getting into currency trading traps by keeping yourself up to date with the latest industry news and movements at all times. You can do this yourself, or you can hire an expert to do it for you (which, of course, entails an additional cost on your part).

Once you've already mastered how the foreign exchange and futures markets operate, you will also be able to prevent yourself from being duped into buying or selling currencies at inappropriate times. Knowledge allows you to make speculations and forecasts about what happens with currency values next.

Electricity Futures Trading on Nymex

Max — Wed, 26 Sep 2007 22:52:29 +0000

The New York Mercantile Exchange is a US-based futures exchange that deals with energy futures, as well as options in gasoline, crude oil, propane, natural gas, electricity and heating oil, and even base and precious metals.

It is the largest physical commodity futures exchange in the world and is considered the premier forum for precious metals and energy trades. Traders who are looking for liquidity alternatives that can counter their bond and stock investments normally flock to the Nymex.

To start trading electricity futures on the Nymex, you have to first open an account with a Nymex accredited, series 3, commodity futures broker. This broker will be your point of entry into the electricity market, so you have to make sure that you make the right choice.

By 'right broker', it is meant that your representative should have ample experience and background in the electricity futures trading environment. He should have a considerable level of expertise in the market and, preferrably, operates in just the electricity market, in order to avoid potential conflicts of interest.

There are brokers that prefer to deal only with companies and institutional investors, but there are also some that cater to smaller units and individuals.

Once you have chosen your broker, you must then assess your current financial standing, your knowledge of the options and futures trading methods, find out how much you are willing to risk and the purpose and objective of your investment.

No two commodity trading accounts are alike, because each is tailored to fit your needs, so you can't really accurately compare with others. However, doing so with an investment that falls within your range will give you an idea on how to go about the process.

The largest electricity market in the world is administered by PJM Interconnection LLC, which is a Nymex affiliate. To date, over 44 million clients participate in PJM from all over the world. Power firms that are members of PJM normally hold over 1,000 generating units, or around 137,000 megawatts of capacity.

Electricity is fit for futures trading because of the following reasons:

- it has a large spread of buyers and sellers

- electricity rates are forever changing and volatile

- it is fungible

The best time to trade electricity futures is during its peak hours, which usually run from 7AM to 11PM. However, you may also trade during off-peak hours, which go from midnight to 7AM. For more information about trading electricity futures, visit the Nymex web site.

Are you Set to Trade Futures Online?

Max — Thu, 20 Sep 2007 10:35:24 +0000

Majority of investors would agree that that the futures market is a key economic center. A hub for intense competition among buyers and sellers and also a means to stabilize prices. The futures market is particularly precarious and intricate by nature. If that does not scare you, then you have the heart for online futures trading

But first things first, it is very important for you to know that when trading futures online or not, you never actually buy or sell anything physical; you are merely entering into an agreement to do so at a future date.

While you will perform the role of either buyer or seller or both, in trading futures, you are just a speculator, expecting to profit from increasing or decreasing prices.

You do not intend to make or take the actual delivery of the goods you are trading, your goal is to buy at a minimum and sell at the highest possible price or vice versa, therefore making your purchase earn you a profit. Prior to the expiry of your contract you will need to sell your contractual obligation to take or make delivery.

A futures contract therefore, is a type of investment instrument, in which two investors agree to negotiate on a set of financial instruments or physical commodities for delivery at some future date, usually three months, at a set price.

If you invest on a futures contract, you are agreeing to buy something that is not physically there yet at a fixed price. But participating in online futures trading does not necessarily mean that a buyer or a seller will be accountable for receiving or delivering huge inventories of physical goods.

Participants in the futures market primarily enter into futures contracts to minimize risk or speculate rather than to exchange physical goods with a goal of earning a profit.

As market prices are highly volatile and susceptible to economic movement, the futures market is a game of both chance and wit, therefore, definitely not for the risk averse.

Basically, futures exchanges offer two venues for trading: the conventional floor-trading venue and electronic or online trading.

Note that regardless of venue, trading is essentially the same in either format: Customers submit orders to be carried out by other traders who take equal but opposite positions, trading at costs which other customers buy or purchasing at prices which other customers sell. This matching of buyers and sellers occur in both floor and online trading.

The main difference is that in floor trading, orders are relayed to brokers in a trading pit, via phone calls from customers or through computers. Customer bids and offers are presented by brokers to other brokers standing in the pit, and matches are made.

Results of the trade are relayed to customers, then sent to clearing house and brokerages, and prices are spread instantly throughout the world. The order is time-stamped at the opening and closing of the trade.

For online trading, customers send buy or sell orders directly from their computers to an electronic marketplace offered by the exchange. Brokers are no longer needed to submit and execute orders for the customers as brokerage approval to trade as well as notice of activity to brokerages are instantly carried out by the computer. Notice the absence of the brokers in online futures trading?

The exchange online system notes all trading activity, and pinpoints matches of bids and offers. Trade information is then sent to the brokerage and clearing house, therefore prices are faster relayed to the public.

Trading Commodity Futures Via The Internet

Max — Sun, 16 Sep 2007 06:04:56 +0000

Before online commodities and future trading became the high-rolling, high-stake investment ground that it is today, its early proprietors were farmers of the 1800's.

These farmers would grow their crops and bring these to the market come harvest time in the hope of selling them. But the main concern then was that without an indicator, they could not efficiently gauge how much of their goods are needed therefore resulting either to shortages or excesses, both causing losses for the farmer.

With shortages causing loss of the opportunity to earn more and excesses causing meats and crops to rot and dairy products to spoil. Also, when a certain produce is out of season any product made from them would be priced so high due to its scarcity.

A central marketplace was subsequently created for farmers to take their harvests and sell them either for immediate or forward delivery. Immediate delivery is what is known now as the spot or cash market and forward delivery is now called futures market.

This concept helped stabilize prices for commodities that were out of season as well as served as an effective indicator of supply and demand therefore saving farmers thousands of dollars that would otherwise go to spoilage.

From forward contracts evolved commodities and futures contracts. Forward contracts are effectively agreements to buy now for payment and delivery at a specified date in the future, which is usually three months from the date of the contract.

These were originally only for food and agricultural products but now they have expanded to include financial instruments. Forward contracts have evolved and have been standardized into what we know today as futures contracts.

Basically, when dealing in online commodities or futures trading, a contract must have a seller (the producer) and a buyer (the consumer). If you purchase a futures contract, you are agreeing to buy a commodity that is not there yet for a specific price.

Although most futures contracts are based on an actual commodity, some futures contracts also are sold based on its future value based on stock market indices.

Unless you are a businessman who is into the trade of the actual commodity you purchased, you won't actually use the goods (if you're the buyer) or actually provide the commodity (if you're the seller) for which you're trading a futures contract.

Remember, buyers and sellers in the futures market primarily enter into futures contracts to minimize risk or speculate rather than to exchange physical goods.

On the other hand, online commodities differ from futures trading in that commodities trading may involve the physical delivery of the goods. In which case a receipt is issued in the favor of the buyer. This receipt enables the buyer to take the commodity from the warehouse.

Traders in online commodities and futures market can use different strategies to take advantage of rising and declining prices. The most common are known as going long, going short and spreads.

When an investor enters a contract by agreeing to buy and receive delivery of the commodity at a set price – it means that he or she is trying to earn from an anticipated future price increase, he or she is going long.

When he or she is looking to make a profit from declining price levels, this is going short. The speculator sells high now so he or she can repurchase the contract in the future at a lower price.

When one makes a spread, however, he or she is trying to benefit from the price difference between two separate contracts of the same commodity.

As an online commodities or futures trader, therefore, you should be armed with a firm grasp of how the market and contracts function.

Reading Trading Trends Based on Futures Charts

Max — Thu, 30 Aug 2007 19:34:09 +0000

The idea of having to look at and interpret charts could any beginner to the futures trading market scampering to the door and swearing the industry altogether.

The blur of numbers and little facts on the charts can seem intimidating at first, especially you're not into numbers, but when you really get down to the basics, it's really not as difficult as it looks.

To be able to distinguish a trend in futures trading chart correctly, you have to have a firm grasp on the basic concepts surrounding foreign exchange trade. Without this knowledge, you will not be able to pass interpretations and assessments on the lines and figures that are showcased in forex charts.

When trying to learn the ins and outs of the futures trading market, you basically have to look at three kinds of charts: The hourly chart, which contains information for the past twelve days, the fifteen-minute forex futures trading chart, which contains data for the past three days, and the five-minute chart, which holds 24-hours worth of financial information and updates.

Note the time

When studying trends in futures trading charts, it is imperative that you take note of the time posted. If you have a world clock, coordinate it with the time posted on the chart so you will have a better idea of where your investments are at a particular time frame.

In addition, you should also remember that the bid price is different from the ask price. The bid price is the quoted rate, while the ask price is the set rate. In forex trading, you sell a currency based on the bid price and buy based on the ask price. These two numbers will be present on the forex futures trading charts you will be studying.

Suggested chart-reading sequence

Experts suggest that you first take a look at hourly forex charts to have a general idea of how the market has performed for the past several days. This will give you a chance to track trends and resistance levels of every opening day.

Once you have done so, take a look at the fifteen-minute futures trading charts to be able to assess what trends are mostly likely to continue for today or the next days.

Studying the five-minute chart last will then allow you to find out the prevailing buy and ask prices, as well as other details you might want to figure out, like the market's behavior at the start of today's trade. From the five minute chart you can also weed out minor trends based on present occurences.

Of course, the above only scratches the surface as to what you should look for in futures charts. But, at least, they will give you an idea what to watch out for to make sure that the rest of your interpreting session goes on smoothly. Read up more literature on the subject to gain more information.

Risks Involved in Futures Trading

Max — Tue, 21 Aug 2007 01:01:02 +0000

Futures trading is a risky business and anybody who will tell you otherwise, that it is 100% risk-free, is daft or is trying to sell you something. The fact of the matter is, futures trading is a financial gamble. And, like a gamble, you will never know when you will win and when you will lose. The key is simply to play the game based on the cards you are dealt with and hope for the best.

A lot of traders are lured into futures trading because of the great rewards it can potentially bring. However, you must keep in mind the rule of opposites, in that with great rewards, also come great downfalls. Futures trading, because you're gambling with something that is yet to happen, is nowhere near accurate.

There are basically four main risks associated with futures trading. We will discuss each of them in brief here. If you want to know more, it is suggested that you consult an expert on the matter, because how the futures trading works and pitfalls involved cannot be simply summed up in a short article.

1. It is speculative.

By this, it is meant that no matter what experts say or predict will happen to the market months or years from now, nobody will be able to make perfect forecasts. Therefore, if you're planning to invest your hard-earned money into financial trades, do not put all your eggs in one basket.

While it is possible that you will make a fortune out of this risk, it is also likely that it will be the one that will send you to the poorhouse. Tread carefully.

2. To be able to trade in your personal account, you must have pure risk capital of at least USD10,000.

Yes, futures trading involves a lot of money at the onset and is definitely not for the faint of heart and the weak pocketed. Thus, if you are looking to earn sums of money in futures trading in order to be able to pay your piling bills, then you could be in for a major financial crisis. Ideally, any person who wants to enter futures trading should have a net worth of around USD100,000 before he decides to take the plunge.

3. It requires ample know-how.

Note that futures trading involves 4 investment categories: namely, speculation, growth, inflation hedges and income. Without adequate knowledge of these four, you won't be able to move freely in the trading market and might even cause yourself to lose.

Do not simply rely on somebody else to do the research and understanding for you. Being able to make intelligent decisions, no matter how inaccurate, will sometimes make the difference between a win and a loss.

4. Do not put in more than 10% of your net on futures.

This backs item number two. Indeed, futures trading should not be your first foray into financial trading. You should only do it when you're confident that you have enough knowledge and that your other investments are working out for you.

Again, futures trading exists in a very high-risk environment and it is not advisable that you splurge, no matter how attractive the possible returns are.

The above is not meant to discourage you from engaging in futures trading. What it seeks to achieve is clarity on your part, so that you won't merely dive in without knowing what risks it entails. Again, banking on futures is a huge gamble. Thus, you must do it only when you're sure you're ready. Good luck!

Training In Futures Trading

Max — Wed, 08 Aug 2007 15:45:08 +0000

If you want to enter the futures trading market but don't have enough time to attend seminars and workshops offered by trading companies. You can seek training and education from the comforts of your home by accessing the World wide web for information.

There is a plethora of data and articles on the ins and outs of futures trading, as well as tips on how to get ahead and make the most out of your investment, on the Internet. All you have to do is conduct a search and you will be faced with thousands of sites offering what you need.

Indeed, with modes communication increasing leaning toward the Internet, more and more people are able to get information on a variety of subjects, especially on financial trading, where the population of loyal patrons increases significantly by the month.

Perhaps people are lured to futures trading because of the potential rewards that it promises to bring to those who play their cards right. And playing YOUR cards right means getting the right training, not just to be able to make sound financial decisions, but also training for discipline, because, as we all know it, engaging in stock trading requires a lot perseverance and patience.

There are various twists and turns recommended by futures trading experts to help you maximize your investment. However, professionals will almost always have these four tips in mind when asked what the four basic principles traders should keep in mind.

1. Make a simple and timely research of the commodity you want to trade in.

It is imperative that these research material be constantly updated and monitored so slight and even negligible movements can be pointed out and paid particular attention.

2. Talk to your broker for advice.

Usually, brokerage houses and analysts have sound and practical insights and guidance about a particular futures item that should be taken well noted.

3. Spread your investment across all lucrative and promising sectors.

This measure can also sometimes be dangerous, but just be beware and analytic when making important and pertinent decisions about your capital and investments.

4. Read analysts' recommendation every now and then.

Take heed, buy when the recommendation about a stock is 'buy' and 'sell' when other wise. Do not take risky chances and bets.

Most importantly, practice discipline and learn to reel in your emotions. Futures trading, while relatively predictable compared to other instruments, cannot guarantee wins every time, even if you've really researched the commodity you banked on because, well, the market changes all the time. It is therefore wise to not place all your eggs in one basket and learn to spread your risks.

Waddling Through Day Trading And Futures

Max — Mon, 06 Aug 2007 06:30:10 +0000

Before we proceed, let us first clarify that day trading means the regular session during the day where most investment trades are conducted. Day trading usually ends at four PM, after which it is called the after-hours trading. Now, on to the discussion on futures.

The common denominator why people choose to invest in futures is the lure of money. However, day-trading futures is not a fool-proof business. There are risks involved and it would be wise to first find out what you're ready to face before you get into it.

Statistics show that more and more people are becoming interested in investing into futures trading accounts because of the strong likelihood of collecting robust gains.

One of the common mistakes in day futures trading is overshooting. When you make a financial plan, stick to it until the end and don't keep changing along the way. This will only cause confusion and result in you losing a lot more money in the end.

Here are some tips traders should keep in mind every time they engage in day futures trading.

The market is highly unpredictable and volatile.

Just because you're trading futures and have some form of control over the outcome of your transaction, you can never be fully sure that you'll be banking a win. A lot of experts will give out forecasts about where the futures market is going, but none are extremely accurate. Trading is basically a gamble, so it's best not to put all your eggs in one basket.

To be successful in day futures trading, you must first determine what your key goal is. Are you trading to generate profits, or are you doing it because it's exciting? Also, you must have a realistic aim, one that you can truly work with based on the resources you have.

You must determine how much you're prepared to risk

All traders seek to prevent huge losses on their futures accounts and not even the most seasoned of traders are spared when the tides turn against them. However, what separates professionals from the novices is that the former have greater emotional control when the heat turns up.

It is inevitable that markets fall, because that's their nature. If you think you can't handle too much risk, then don't invest too grandly. Put out only what you can comfortably work with.

What futures trading can guarantee is that at some point you win a lot and at some point you will lose. Thus, traders are expected to exercise an ample degree of patience and prudence when they make their financial decisions. That is, hope for the best and expect the worst. If you're not prepared to face a major downfall, then maybe futures trading is not for you.

Remember, the market is unpredictable and no matter how much of an expert you say you are at it, there is no 100% fool-proof strategy to ensuring a win.

Should You Get Into Day Futures Trading?

Max — Mon, 23 Jul 2007 01:45:07 +0000

Statistics show that more and more people are becoming interested in investing into futures trading accounts because of the strong likelihood of collecting robust gains. The reasons why they choose futures vary:

- They have gotten a little bored with investing in other financial instruments, like mutual funds, bonds and stocks and want to dabble in something new.

- They have been successful with stock, bond and mutual fund investing and are hoping to widen their earnings even more.

- They have not had much success with bonds, stocks or mutual funds and would like to try their hand at day futures trading in the hopes of finally raking in a win

- Someone they know has had good experiences with day futures trading that they want to obtain a piece of the sumptuous money pie.

The common denominator why people choose to invest in futures is the lure of money. However, day futures trading is not a fool-proof business. There are risks involved and it would be wise to first find out what you're ready to face before you get into it.

The market is unpredictable

You must determine how much you intend to risk

It is inevitable that markets fall, because that's their nature. If you think you can't handle too much risk, then don't invest too grandly. Put out only what you can comfortably work with.

Overshooting is one of the common mistakes in day futures trading. When you make a financial plan, stick to it until the end and don't keep changing along the way. This will only cause confusion and result in you losing a lot more money in the end.

The main thing day futures trading can guarantee you is that you will lose at some point. This advice isn't really encouraging but it's a realistic look at the industry. That's why those who are just starting out in futures trading are being told to expect the worst, but hope for the best. If you win, then good for you. If you lose, take defeat like a professional, see where you went wrong and then trade again.

All About The Commodity Futures Trading Commission (CFTC)

Max — Wed, 11 Jul 2007 12:15:06 +0000

The Commmodity Futures Trading Commission is a US government sponsored independent body that is tasked to monitor and record futures contracts trading activities that occur on futures exchanges in the United States. It was formed by the US Congress in 1974, and has the power to suspend, fine and impose legal sanctions on an individual or a firm in the event of fraud, misconduct or other cases of rule violations.

The agency is also responsible for publishing weekly updates on the holdings of the over twenty market segments in existence today.

These reports, called the 'commitments of traders report' or the COTR are handed out at the end of each week, usually every Friday. They contain information on open interest splits by non-reportable and reportable open interest and non-commercial and commercial open interest.

To make things short, the aim of the Commodity Futures Trading Commission is to protect the public and market participants from abusive and manipulative practices related to the sale of financial futures, options and commodities, and to make sure that all transactions are conducted in a transparent, financially viable and competitive manner.

During its inception, the CFTC was merely tasked to regulated options and commodity futures markets in the US. However, with the introduction of the Commodity Futures Modernization Act of 2000, or CFMA, the CFTC's duties have been expanded.

Via effective oversight, the agency makes sure that the futures market is able to provide market participants a means toward offsetting pricing risks and price discovery.

The CFTC has five commissioners, each of whom is appointed the president and serve in five-year intervals. One of the five commissioners is named chairman, with the approval of the senate, with rules stipulating that not more than three commissioners should be sourced from the same political party, to provide fairness.

The agency is headquartered in Washington, but it also holds offices in key cities that have futures exchanges, like Chicago, New York, Minneapolis and Kansas.

The CFTC has six key operating units: The Division of Clearing and Intermediary Oversight, the Division of Market Oversight, the Division of Enforcement, the Office of Chief Economist, the Office of the General Counsel and the Office of the Executive Director.

Each unit has a specific function, all of which sharing the goal of making sure that all transactions conducted under it satisfy regulations and are in the best interests of market participants.

There is a wealth of information about how to properly trade futures in the CFTC website, which can be found at www.cftc.gov. Check the site for further details.

Trading Soybean Futures

Max — Tue, 03 Jul 2007 08:15:12 +0000

Soybeans are one of the most traded commodities on the Chicago Board of Trade because they are easily grown and serve a number a uses.

Initially, George Washington Carver saw that soybeans may be used as a substitute to cotton as the sole profit maker in the South, after which he discovered that they may be utilized to make plastic, paints, inks, varnishes, linoleum and even fuel. And you thought soybeans were only for making tofu and soy milk!

The increasing price of fuel products has made soybeans and their use as a fuel product more attractive to many investors. The potential for growth in the soybean futures and options industry is vast, especially with the discovery of new ways to make them useful complements to everyday things.

Bio diesel fuels are primarily made from soybean oils, and because more consumers are turning to alternative sources of energy nowadays, it won't be surprise when soybeans finally make it to list of the most-coveted commodities in the world.

Businesses that depend on soybeans for their manufacturing needs are wary of price fluctuations in the soybean industry. Because global supply is greatly determined by production decisions made during springtime, as well as erratic weather conditions, there really is no guarantee that soybean supplies are always at their all-time highs.

However, it is important to note that while supplies rise and fall, demand does not typically falter and, in fact, even rises, thus influencing soybeans' market price.

Soybean trading

Anyone can enter the soybean options and futures trading market, as long as there is interest in the commodity itself. If you're a businessman whose venture is related to soybean production or acquisition, then engaging in soybean futures trading is right up your alley.

Contracts on soybean futures and options will help you better manage your trading tools and boost profitability. Even people who do not have direct participation in the agri business can profit by trading soybean options and futures.

Advantages

The Chicago Board of Trade bases its futures contracts on the South American soybean sector, where the most soybeans are produced. The advantages to trading soybean futures and options contracts include enhanced hedging efficiency, greater liquidity, transparency, the presence of a global benchmark, arbitrage opportunities and financial integrity (because it is backed by the CBOT).

In addition, trading soybean futures and options can also happen both in the traditional trading floor and online, for greater convenience.

For a more detailed look into the world of soybean trading, you might want to check out Tkfutures.com/soybeans.htm. Here you will find all the answers to questions on how soybeans are traded, their trading schedules, as well as the different kinds of contracts that are involved.

Futures Trading Software s

Max — Sat, 23 Jun 2007 06:45:07 +0000

With the Internet emerging as a key communication venue for many individuals and businesses all over the world, not only has it broadened links between entities but also widened the scope of investment opportunities for both professionals and non-professionals.

Futures trading software are important tools for many traders, brokers and financial investors who wish to organize and develop their investment options. It keeps them on track with day to day trading activities and allows them to monitor every move and save past transactions for future reference.

Having a reliable futures trading software program in handy helps boost a trader's understanding of the industry he is in and allows him to buy and sell stocks with greater ease.

Futures trading software's basic features

Currency converter

Because cross-border investments or foreign investments can now be possible, there are a number of futures trading software that include currency converter.

Case in point, US-based investors can place in investments at the Tokyo Stock Exchange. By using a software, the US dollar is converted into Japanese yen. Thus, the investor would know how his money is worth when converted into a specific currency or denomination.

Stock predictor

Since there are tickers, futures prices are recorded in the archives. Thus, analysis of everyday and every hour movements of options prices would help infer and predict a particular stock's future and possible stock price movements.

Chart tools

A chart tool makes use of the stock price data. These information are then converted into charts so the viewer, analyst or investor can easily track and monitor the movement of a particular stock. This makes life easier for such trading people.

Ticker

When you are watching business news channels, you would see tickers. Tickers are the bar that is placed at the lower part of the screen.

A ticker contains company names and the equivalent stock price that goes with the stock at current time. Tickers are very helpful to investors and brokers because they indicate whether an option is declining or is rising.

There are more than enough reasons why technology firms and developers have come up with futures trading software or special computer programs that are aimed at fully equipping the modern and bury stock market trader and investor. Choose the best one.

The Important of Setting Futures Trading Systems

Max — Sun, 10 Jun 2007 23:45:09 +0000

As with any industry and field of study, the person who has the most expertise is the one who will most likely thrive the longest and reap the greatest benefits. This is the same with futures trading.

The trader or investor with the most experience and know-how is the one who is better positioned to take home serious wins, as opposed to the novice trader who banks all his cards on luck.

Start-up traders who just rush into the business without ample knowledge and foresight will not just lose their investment, but will also lose the money spent for initially getting into the trade. Any professional on the futures trading field will say that all will be futile without a systematic plan.

Chances are, without a trading system, the individual who opts to trade might buckle under pressure and end up losing so much more than he should have. As with any business, you must consider not just the resources you hold and how much you are willing to risk, but also the timing of the investment and when each move should be carried out.

Futures trading, therefore, should be met with a business-like approach and with a professional system, and should not be treated as a mere hobby.

To start with, your futures trading system should include answers to the following:

What markets will you be trading in? What are the requirements needs to enter a trade? What are needed to exit a trade with profits? How do you exit a trade with losses? How much money can you afford to risk in the transaction? and What are your capital limits?

Those who start trading without clear answers to the above questions are not likely to succeed in the long term. The absence of a set goal and defined trading system will only make you jump from one market to another, and prevent you from taking up expertise in a certain financial instrument.

In addition, the presence of a system will also protect you from unforeseen events, because you are likely to have already thought of a backup plan in case unfavorable instances occur. To know if the trading system you have mapped out is effective, ask yourself whether most of the decisions you have to make under the plan are based on subjective feelings. If they are so, then it's time you make a change. To avoid getting too emotionally attached to your investment, you must plan your moves objectively and realistically.

Once you have a system in place, you must commit to follow your plan all the way through. Even with a solid system, you are still likely to fold if you don't have the proper discipline to carry it through.

Of course, while we can never discount the contribution of luck to trading wins, you should not bank all your hopes on fate. A good system is what will keep you sane and protected when you're engaging in futures trading.

Remember, while market conditions change sporadically and nobody can really accurately predict where economies go, there are ways to make informed guesses and intelligent forecasts. And because you're dealing with your hard-earned money here, it's better to be safe than sorry.

As a futures trader, you are responsible for own success or failure. Make the journey worthwhile by having a solid system.

The Truth Behind Futures Trading

Max — Thu, 07 Jun 2007 08:00:09 +0000

More and more traders are opting to enter the futures trading market because of the possibility of high rewards. And this is true, because futures trading does have a lot to offer compared to other trading schemes.

However, the lure of big returns often overshadows the risks and realities linked with this type of trade. It is for this reason that a lot of traders fall into major losses — because they focused too much on the good to try to overcome and get around the bad.

There are two basic truths to futures trading. One is that market movements are very difficult to predict and monitor and the other is that losing is a natural part of the game. If you don't get these two into your head at the onset of your trading frenzy, then you might encounter shock when twists of fate happen.

Realize that trading futures is not a set and perfect deal. There ARE risks involved, as well as pitfalls. Getting yourself prepped from the very start will make the pain of losing money easier to bear and will allow you to make intelligent guesses as to where the market is headed next.

Market turns are sporadic and impossible to accurately forecast

There are many analysts and experts in the financial market that offer guidances or outlooks based on different market movements. This practice has become so prevalent that traders often mistake these forecasts as truths and anchor their decisions on them.

This is where the problem lies. The truth is that markets' future actions can never be predicted, because something, somewhere is bound to happen at the very last minute and turn everything around and upside down.

Some traders trade futures carefully, fully knowing that a problem could arise at intermittent times. However, there are some that move on hope. They 'hope' that what the 'experts' predict will become reality and force themselves to hold on, even when alarm bells are already ringing in their ear.

When you really think about it, has there ever been a time in person's life, not just his financial business, where a future occurence has been predicted with ease and accuracy? There has been none. And this goes out also to futures trading.

Losing is part of the game

While futures trading holds the promise of a massive win, it can also spiral you down to a major loss. As with any risky business, there are winners and there are losers.

Sometimes you're up and sometimes you're down. This is a reality that you have to deal with before you step into the world of futures trading. If you come in expecting to win all the time, then you're in the wrong system.

Futures trading is a gamble. While you will be able to make intelligent guesses as to whether the market will be moving in your favor or not, you will most definitely not be able to see what happens until it actually happens.

Once you are able to accept this fact, you will be able to concentrate on making trends depending on the trends you've noticed in the market. Because over the long haul, your knowledge of market movements, no matter how inaccurate, will still lord over having to depend on other people's predictions to determine your next move.

Online Futures Trading

Max — Thu, 24 May 2007 03:14:53 +0000

Online futures trading has emerged into a moneymaking powerhouse thanks mostly to technological improvements and innovations.

Now you can kick back at the comforts of your home and dabble in mercantile markets, buying and selling futures as often as you want depending on how much to plan to reap from your investment.

A number of brokerage firms provide online trading services and information on futures trading, and you can open accounts and utilize the trading platforms they offer for a certain fee, or, sometimes, even free of charge.

Not only that, online futures trading firms also provide real time and updated information and market research so that you will be able to make better financial decisions with regard to your investment. You will also be able to stock goods in advance, so an oversupply or a shortage problem will not be part of your list of trading headaches.

This is not to say, however, that online futures trading is the better way to go compared to the classic trading-floor system. Online futures trading is simply more convenient because it can be done from home or from anywhere there is an Internet connection.

Their ability to turn in gains are the same, as, ultimately, how an investment profits rests entirely on your shoulders, because it is you who make the financial judgments. Therefore, how you should manage futures trading online is no different from how you tackle trading-floor transacted futures.

In fact, when you really think about it, doing business via the online futures trading 'floor' is actually more risky because you do business directly to the online venue provided by the futures exchange. Orders and submissions are all done electronically so, depending on the speed of your connection and the reliability of your Internet service provider at that particular time, you are not assured if you've transacted in time or not.

With online futures trading, you are at the mercy of technology, no matter how keen your investment foresight is or how much of an expert you are in mapping market trends.

But don't despair just yet, because advances in the field of communications have made the Internet highly reliable tools for those transacting trading business online. This isn't the 90s when the Internet was at its slowest and constantly bogs down. The glitches are not common occurences now and are actually very rare.

What we are saying here is that with any trade you get into, there are risks. Therefore, you should not anchor all your money and hopes in a single instrument. Futures trading, whether done online or via traditional means, should still be approached with careful judgment and caution.

While futures trading promises to deliver impressive gains for you, it also promises to hit you with painful losses from time to time. It's a cycle. Thus, you must have enough patience and prudence to know when to continue plodding forward and when to take a breather and assess where you currently stand.

The difference between online futures trading and classic trading is just the location. How you deal with your investment should be the same for both venues.

Appreciating Simulation in Futures Trading Software

Max — Sat, 12 May 2007 21:30:10 +0000

Having a reliable futures trading software program in handy helps boost a trader's understanding of the industry he is in and allows him to buy and sell stocks with greater ease.

Trading Simulations

Perhaps the best thing about futures trading software is that it allows you to simulate trading environments and get you in a position where you are experiencing the thrill of trading itself. This simulated environment enables you to practice the basic skills you learned about futures trading and apply them at a venue that is risk-free.

Simulated futures trading software allows you to conduct experiments and apply strategies without having to lose so much in the process — except your time and patience. Simulated trades also enable you to practice patience and grace under pressure, to prepare you for the rigors of the actual trading floor itself.

Basic Tools

To best appreciate the feel of simulation in futures trading software, look for the following basic features in your application.

Stock predictor

Chart tools

Ticker

When you are watching business news channels, you would see tickers. Tickers are the bar that is placed at the lower part of the screen.

Currency converter

Because cross-border investments or foreign investments can now be possible, there are a number of futures trading software that include currency converter.

The better equipped with the right tools your futures trading software is, the better you will be able to simulate the trading environment you will eventually work with when the time comes that you're ready to face the actual music. Choose a software that all the above features and more.

What Is Index Futures Trading?

Max — Tue, 08 May 2007 00:45:09 +0000

Futures trading is often misconceived as a complex, high stakes and risky venture. This is far from the truth. The misconception springs from the lack of the proper financial know-how about the subject and a clear understanding of what it is for.

What is index futures trading?

Index or stock futures trading is the buying or selling of a set quantity and quality of a financial instrument, which will then be delivered and settled at a predetermined time in the future at a price set during the time of purchase.

Institutional investors typically make use of stock index futures to hedge positions of the underlying stocks in their portfolio.

If you invest on a index futures, you are agreeing to buy something that is not physically there yet at a fixed price. But participating in online futures trading does not necessarily mean that a buyer or a seller will be accountable for receiving or delivering huge inventories of physical goods.

Participants in the index futures market primarily enter into futures contracts to minimize risk or speculate rather than to exchange physical goods with a goal of earning a profit.

As market prices are highly volatile and susceptible to economic movement, the futures market is a game of both chance and wit, therefore, definitely not for the risk averse.

Basically, index futures exchanges offer two venues for trading: the conventional floor-trading venue and online trading.

Regardless of venue, trading is essentially the same in either format: Customers submit orders to be carried out by other traders who take equal but opposite positions, trading at costs which other customers buy or purchasing at prices which other customers sell. This matching of buyers and sellers occur in both floor and online trading.

Basics to Reading Futures Trading Charts

Max — Wed, 25 Apr 2007 08:45:13 +0000

To the uninitiated in the world of foreign exchange trading, the thought of having to look at and interpret charts could send you flying to the door and swearing the industry altogether. The mix of numbers and factoids on the charts can seem intimidating at first, especially you're not into numbers, but when you really get down to the basics, it's really not as difficult as it looks.

Of course, to be able to read a futures trading chart correctly, you have to have a firm grasp on the basic concepts surrounding foreign exchange trade. Without this knowledge, you will not be able to pass interpretations and assessments on the lines and figures that are showcased in forex charts.

But, for the sake of discussion, let us assume that you already know how the foreign exchange market basically works and just want to know how charts are monitored.

There are three basic charts to track when studying the futures market: The hourly chart, which contains information for the past twelve days, the fifteen-minute forex futures trading chart, which contains data for the past three days, and the five-minute chart, which holds 24-hours worth of financial information and updates.

Once you have done so, take a look at the fifteen-minute futures trading charts to be able to assess what trends are mostly likely to continue for today or the next days.

When studying futures trading charts, it is imperative that you take note of the time posted. If you have a world clock, coordinate it with the time posted on the chart so you will have a better idea of where your investments are at a particular time frame.

Some charts are better updated than others, and it will do well if you access charts that are changed in real time, because, as you may well know, seconds of delays in trading can sometimes spell major wins or losses.

These are just a few basics to the proper reading of futures trading charts. Of course, it gets more complicated than that, especially when it comes to the assessment part. However, the above tips will help you start out smoothly and will tell you what items to check at the onset of every tracking session to make sure your forex monitoring activities go on without a hitch.

What You Need To Know about Trading Futures And Options

Max — Wed, 11 Apr 2007 01:00:17 +0000

Futures trading is a risky business. It is a financial gamble. And, like any gamble, you will never know when you will win and when you will lose. The key is simply to play the game based on the cards you are dealt with, what you know about the market so far and hope for the best.

Many traders are lured into futures trading because of the great rewards it can potentially bring. However, you must keep in mind the rule of opposites, in that with great rewards, also come great downfalls. Futures trading, because you're gambling with something that is yet to happen, is nowhere near accurate.

This can also happen when you're dealing with options, because, the value of underlying options are basically placed against futures contracts. When you acquire options, more likely than not you will get them at a discounted rate based on the price of the product at the time they were issued.

Many find stock options trading attractive because it allows people to acquire stock at a discounted price. With this procedure, holders of stock options hope that the shares' value will increase within the period of time given so that they could sell at a higher price and generate a profit.

Options may be exercised at a given time in the future and at the rate at which they were issued, but the holders stand to gain or lose depending on the value of the options at the given future date. Thus, when you really look into the nature of futures and options, they are very similar and related.

Trading Options and Futures: Some Tips

Trading options and futures requires research on your part

Futures trading involves 4 investment categories: namely, speculation, growth, inflation hedges and income. Without adequate knowledge of these four, you won't be able to move freely in the trading market and might even cause yourself to lose.

You should invest no more than 10% of your net on futures.

Futures trading should not be your first foray into financial trading because it involves a considerable investment. You should only do it when you're confident that you have enough knowledge and that your other investments are working out for you.

The market is unpredictable.

No matter what experts say or predict will happen to the market months or years from now, nobody will be able to make perfect forecasts. Therefore, if you're planning to invest your hard-earned money into financial trades, do not put all your eggs in one basket.

While it is possible that you will make a fortune out of this risk, it is also likely that it will be the one that will send you to the poorhouse. Tread carefully.