Dec 15, 2016
I have been asked many times about the reality and success of trading futures. Is it dangerous? Is it profitable? Is it hard? My answer is yes to all three questions. Anything is dangerous if you don’t know what you are doing, anything is profitable if you know what you are doing and anything is hard if you make it that way.
Futures trading is a profitable business, but like anything else it may not be for everyone. Before you decide you need to ask yourself a few questions, and make sure you answer definitively and honestly. You would be surprised how many people lie to themselves and act on timid information instead of definitive answers.
Do you have the time to trade futures? Futures require your presence to make money. You are not a big hedge fund and you are not pursuing the big methods and trades the big boys are making in futures. You and I do not have that kind of money and information to pursue those kinds of trades. You will be trading futures by waiting for the big boys to put things in motion and then you will swoop in and take your share and get out. You want the strategies that minimize risk and that give you the best risk to reward ratio.
If you do not have time to show up to trade then you are better off moving on to something else. Unlike options or stocks, futures require your presence. When I say time to trade I don’t mean all day. If you can show up for the first hour of the market open (9:30AM-10:30AM EST), then you can trade futures. By the way, some people will argue that you can practically trade futures around the clock. Although the futures market is open most of the 24 hours of the day, there are good times and not so good times to trade. You want to reduce risk and have the best risk to reward ratio, and that time is at market open and in some cases at market close (3:00 PM-4:00PM EST). Although there are other sporadic times where profits may be made, you should concentrate on the best times to get in, make a profit and get out.
Are you willing to learn patience and to learn how to follow a written well thought out trading plan? One of the main reasons for losing money in any business is to “rush in where wise men dare not go.” Learning how to trade futures only takes a few days and then you must dedicate a consistent daily approach to practice until the strategies and other lessons have sunk in. How many days of practice? It varies. Some people will need a couple of weeks before making their first trade while others may need a couple of months. The key to trading any strategy or concept is to become comfortable with it, mold it to your personality and make it second nature in your daily decision making.
A key to understanding and profiting with futures is to pick a couple of commodities to trade and concentrate on those commodities and do not have illusions of being a one person large hedge fund. There are opportunities every day in the futures market, if those opportunities do not present themselves in your commodities for that day, then you must learn patience and wait until the opportunities appear and the indicators give you a confirmation for entering a trade. Believe me you will make more money and exceed your goals if only you follow what I just said above. Losses are usually realized when a person tries to force a trade which does not exist.
Can you handle and understand that you will suffer some losses? This is a very difficult fact for many people to accept; and it causes more losses as a result of fighting the fact that losses will happen. So long as you stick to the plan and apply the proper money management system you can actually lose 7 of 10 trades and still be profitable. Knowledge of how to do that and the discipline to follow that plan is the key.
I know that most programs only highlight the winning aspect of their programs, but if they are not making sure that you understand the fact of losses and how to accept them then you better stay away. The big boys on Wall Street only succeed about 35% of the time and they still make money. Since we are not taking the huge risks of the big boys, but waiting until the risk has been tremendously decreased by them, our winning percentage should be much better than 35%, so long as we stick to the plan.
Do not be afraid of trading Futures. It is not a difficult thing to do, but it does require that you learn and show up to earn. Pursue your prosperity and your future financial freedom by learning how to properly manage your own money to exponentially generate wealth.
The best way to make money in any environment is to follow the CARDINAL RULE and make your money work for you.
God Bless and remember…
Prosperity is the name of the game…
Get started…Create Your Own Economy
MAKE IT AND KEEP IT!!!!
By: Louis Monsour
