Novice investors generally shy away from future trading, because of the undeserved bad
reputation that this type of trading has. While it is true that people have been wiped out in the Future market,
many have become very wealthy as well. In reality, it is only as risky as you let it be.
If you approach futures as a gambling game, like roulette, or craps, your odds of coming out a winner will be as
bad, or worse, as casino odds. However, if you arm yourself with education, avoid fear and greed, and
approach managed futures as a serious investment opportunity, then the probability of success is
The process of trading future is also known as commodities trading. Unlike buying stocks, when you trade future
you do not actually own anything. All you are doing is speculating on the future direction of the price of the
commodity. In other words you are betting that the price will either go up (if you are a buyer), or it will go down
(if you are a seller).
No one really has to take, or make, delivery of the underlying product that the contract represents. In fact,
most of the time, the trader merely offsets his position at some time before the date that the contract is due.
The 3 types of Futures Traders
There are basically three types of people who trade in futures: Hedgers, Speculators, and Floor Traders. Here is
an look into each of their individual roles.
Hedgers are individuals or companies that trade in the futures market so they can establish a known price level
to satisfy a future need to buy or sell the underlying commodity. They do this in an effort to protect themselves
against the risk of an unfavorable price change when it is time to fulfill their need. Some hedgers also use
futures to guarantee a minimum profit margin in some transaction.
Speculators are more like stock traders. They are individuals or companies that try to make a profit from the
price fluctuations of the underlying commodity. Whenever someone speculates in a futures trade, there is always
someone who is taking the opposite position, or betting against the speculator. This may be another speculator, or
a hedger, or a floor trader.
The third type is the floor trader or "local". These are people who buy and sell for their own accounts directly
on the trading floors of the exchanges. These are a very elite group of traders, not unlike Day Traders in the
equities market. They are credited with giving the futures market the liquidity that it needs in order to
The chances are that you are most likely to fall under the speculator category if you are reading this article.
This is extremely risky... you need to arm yourself with the right knowledge.
Quality Futures Resources - Let's Play, Work and Live Freely!
Selecting the quality resources can be a daunting task. Doing thorough research, we have selected a few of the
best futures trading courses. Once you arm yourself with the knowledge and tools required, you could be very
Recommended Futures Trading Resources
MarketClub is an online charting system that is constantly scanning 230,000 symbols with buy or
sell signals deigned to help traders research, get in and out of trades as quickly and efficiently
Researching and planning trades can take hours, and let's face it, traders don't have hours to
waste. What you need is a tool to give you an edge on the markets and to help you make educated
decisions based on the technicals and not your emotion. MarketClub puts all of your research tools
in one easy to use package that together gives you the edge you need to build and manage your
60 Minute Trader
This is a totally comprehensive and detailed futures trading system; a complete
A to Z, yet is one of the most ludicrously simple trading systems available... the in-depth
knowledge contained within will give you confidence and enhance your profitability. Our research
has shown that people look for two main things from a trading system.
Firstly, they want to spend as little time trading as possible.
Secondly, people want to take the guesswork out trading.