Futures trading is a complex, volatile, and challenging form of trading. It can be a great way to add value to your portfolio if you have the right mindset and approach. In the right hands, futures can be a profitable trading tool with high risk-adjusted returns over time.

Learning to trade futures takes time, effort, and perseverance. Even the best traders have been losing trades from time to time, but that doesn’t stop them from coming back stronger than ever. To succeed in this field, you need resilience, tenacity, patience and above all belief in yourself. Fortunately, there are many helpful tips and tricks when getting into futures trading.

Have A Trading Plan Before Entering A Position

One of the most important aspects of this kind of trading is having a plan. Having a plan can help to reduce stress and improve your decision-making process. It sets you up to achieve your trading goals and helps to remove the impulsive nature of trading.

A trading plan should include your trading style, risk tolerance, time horizon, profit goals, money management, and the type of futures you want to trade. A good rule of thumb is to only trade futures contracts that you can afford to lose. If you’re trading with borrowed money, make sure you are aware of the risks and that you fully understand margin requirements.

Trade Small And Be Patient

Starting out in this kind of trading, you may think that bigger, more high-volume contracts lead to better returns. However, that is not the case. Smaller contracts tend to have less volatility, which equates to less risk and is more suitable for a beginner.

Being patient is another important aspect when getting into this kind of trading. Successful traders have learned to wait for the right entry points in the market. When you’re first starting out, you will make mistakes. You won’t always get things right, so don’t be too hard on yourself.

Allow yourself time to learn from your mistakes and build your knowledge base from there. Let your trading strategy and indicators guide you, not your emotions.

Keep Up To Date On Market Trends

Market trends are what fuel volatility and create opportunities in this kind of trading. Trends also help set the mood for future price movements. An important part of getting into it is keeping up to date on market trends. This can be done via research and reading the news.

Gaining a deeper knowledge of macroeconomic factors that influence commodity prices will help you to understand what drives the market. This will enable you to make more informed decisions which can ultimately help you succeed.

Use The Right Trading Tools

Lastly, a growing number of futures traders use automated trading platforms that are programmed to execute buy and sell orders as certain conditions are met. These platforms have made trading more accessible to more people.

Automated trading is riskier than traditional manual trading. Therefore, it is important to weigh up the advantages and disadvantages when getting into this kind of trading. Automated platforms are helpful in terms of managing risk, executing orders in real-time and simplifying trading.