Futures Trading Like The Turtles Can Make You Rich!

By Ahmad Hassam

Financial markets are huge. Daily billions of dollars change hands in these markets when different financial instruments change hands. You can trade stocks. You can trade bonds. Ever heard of the futures market and futures trading? Well, futures are a security just like stocks and bonds. Stocks give you the ownership in part of a company while bonds are issued by governments and companies to borrow money from the investors. Futures are somewhat different than stocks and bonds!

A futures contract is a legally binding contract between two parties with a set of conditions for the delivery of the underlying asset such as a commodity or a financial instrument at some specific date in the near future.

Futures market is a very important financial market that sets the prices in the retail and wholesale markets of commodities like wheat, corn,heating oil, oil, gasoline, gold, silver, cattle, soybeans, meat, hogs, coffee and many other foodstuff. Futures market was primarily developed for helping farmers hedge their risk while growing agricultural commodities. Agricultural commodities are a very important part of the futures market. Over the decades, futures contracts become popular on a host of other commodities and contracts.

Futures contracts are by design meant to limit the amount of time and risk exposure experienced by hedgers and speculators. What this means is that all futures contracts are time bound and at some point in the future they expire.

In the last decades, electronic trading has become highly popular among the traders. This includes futures as well. So, now you can easily trade these contracts by opening an account with a FCM brokerage and deposit an amount to start trading these contracts on margin. The minimum amount with most of the brokers is something like $5,000 but it can less too! Brokers allow leverage upto 10:1 when you trade on margin. Compare this to the leverage of 2:1 allowed by stock brokers.

In US, open outcry trading still takes place during the official hours at the different futures exchanges. However, most of these futures contracts also get traded electronically. GLOBEX allows electronic trading of most of these futures contracts 23 hours each day. Electronic trading provides a more level playing field, more price transparency and lower transaction costs.

CME, NYMEX and CBOT are the three most important Futures Exchanges. GLOBEX allows you to trade most of the contracts that get traded on these exchanges. The popular contracts that get traded on GLOBEX are the E-minis like the S&P 500, NASDAQ 100 and Dow. You can also trade E-mini gold futures as well as crude oil futures on GLOBEX.

GLOBEX trading overnight tends to be thin and more volatile than during the official trading hours that are from 8:30 AM EST to 4:15 PM EST. If you trade financial news on Bloomberg or CNBC before the stock market opens officially, you will find quotes on S&P 500 futures and other taken from GLOBEX.

These quotes are real time. There are many contracts that you can trade and the possibilities of making money in futures trading are immense. Imagine the prices of crude oil going up again just like what happened in the summer of 2008! Futures trading can be highly profitable but risky as well. Before you dabble in them, you should paper trade these contracts for at least a month just to get a feel of how to do it. - 31869

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The Future of Futures

By Nelson Pellew

When one acquires a certain amount of stocks, based upon the market price, one is entitled to an equivalent amount of certificates entitling one to the aforementioned investment. When the market value of these stocks increases, you can sell your stocks for the market value, entitling you to the difference. Hence, when yours stocks "go up" you make a profit. But, when your stocks lose value, you quite clearly lose value as well.

Now, rather than deal with hard market of stocks, you could opt for the softer market of futures. To begin your career as a futurist, you need only pony up to the margins set by each commodity on the market. So, for instance, you like that the margin (think of margins as ante in a poker game) for wheat -- or let's say sugar. The margin for a commodity may be $5,000 or so.

Once you have invested the initial margin amount you may begin to wheel and deal using smaller increments known as e-minis. Now, it may help you to think of this margin in term of your own home. Imagine putting down 20% of your home's value in order to steer its potential open market value. Heady stuff, indeed. But be wary and stay focused or you will suffer the fate of many a day trader in the 1990s.

Courtesy of the Online Trading Academy, let's indulge in a brief, but informative example. Let us presume that a given e-mini trading price is valued at $980. The market value is computed by taking the dollar value per e-mini point ($50) and multiplying it by the last trading price. Thus, $980 multiplied by $50 equals $49,000. Now, say the initial margin value is $5,625. This means for $5,625 you can determine a futures contract worth $49,000. This represents a 9:1 leverage ratio.

The leveraging power of futures and e-minis is significant, but futures trading will require easy access to a great amount of liquid capital. Your IRA or trust fund will do you no good. If the market moves against your futures, you will be responsible for meeting your margins should they fall below market value. Failure to do so will handicap your ability to trade as quickly and lucratively as you might like. - 31869

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What Are Trend Following Indicators?

By Gery Lermann

Looking into trend following indicators which is a way that people will use to invest in the stock market. This strategy will be used to compare how stocks have done in the past, the trend of ways they have moved on the stock market.

Using this method will be a way that people will know how and when to invest in the right stocks. Which will offer the best chance at profits, and how well they have done in the past will be figured into that strategy.

When traders do this type of method they will not be forecasting the stocks and what is going to happen. Instead they are simply following a trend that has been shown in the past. Looking to the current prices of the stock, equity levels and what the market's current volatility. Those are the main components that will be used by the trader when using this method.

Not a method that will be used on new stock that hasn't yet established any trend, but on those old standbys that have been around for a while. Price is always a top consideration when using trend following indicators. When a trader is using this method they will try and use indicators to figure ups and downs in the market.

It will need to be decided how much will be traded during the trend and how long it lasts. When the market is at a higher volatility level size of trading will be reduced in order to cut losses. With trend following indicators, time and price will always be of highest importance.

Using trend following indicators will allow you to answer the questions that follow. How to enter the market and at what time, the amount of shares you going to trade at each time. Money you will spend on each trade, cutting losses when it's not profitable, and how to handle a profitable trade. - 31869

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The Falling Dollar Continues To Fall

By Brian Gosur

What if you were the only one who knew that the American dollar was going to drop to zero? Would you tell anyone? Would it change the way you live? Would you see your economic future in a totally different way?Stop and think about it... Don't go crazy and start running around yelling, "It's the end of the world!" But let's stop and take a look mat this.

Back in 1971, Richard Nixon talked the world into putting gold and silver aside as money and just continue to print the paper as money. Whenever that happens the economy goes up and down. This goes back to the Greeks and the Romans. Whenever a new Caesar would make his own money against using the gold and silver as money, the economic pendulum began to swing.

Well known men, like Robert Kiyosaki and Peter Shiff say you can predict the future. You don't need some magical window either. Just look at what's in front of you. Open your eyes. Don't stick your head in the sand.

The Federal government and Europe are printing paper faster then you can blink an eye. The faster they print the faster the value drops because there is nothing backing it up. It will continue to fall until it hits the bottom. What happens then? What happens to your savings?

That is why gold, silver, oil, real estate continues and will continue to go up in value because the cash that we print is trash. Exchanging your green paper money for commodities such as these is a very smart investment right now. If you continue to work and save all your money, putting it into a bank or 401k, you will lose in the long run.

Take silver for example. There is less silver then there is gold in the world. Silver is used far more in manufacturing then gold. It's used to make cell phones, computers, and electronics. Yet I can buy 60 ounces of silver for every one ounce of gold you buy. Silver is an incredible buy right now.

Where will the price of silver be in five, ten years from now? No one knows. Some think it could go into the thousands per ounce. But one thing we do know, gold and silver prices are continuing to rise, and the dollar is falling...the dollar is falling! - 31869

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