Futures Exchanges – Knowing Where To Do Business
Good for you! You’ve been reading, you’ve put together a trading rules to lay the foundation for your futures trading plan and you’ve even been paper trading to prove your trading plan. Now you are ready to learn more about where you will be doing your business; it’s time to talk about the futures exchanges.
General Futures Exchange Information
As you know at this point, you will not actually do business with the futures exchanges listed below. You will work with your broker who will take your futures orders to the exchange floor for you. Since you have been paper trading, you probably have already established an account for commodities trading so we won’t go over that again. While there are futures exchanges throughout the world, we will focus on the ones in the US. The markets we will outline are in Minneapolis, Kansas City, New York and Chicago.
History of Futures Exchanges in the US
The modern futures trading began in Chicago, IL in the early 1800s. Chicago, with its location at the base of the Great Lakes, is close to the farm of the U.S. Midwest which made it a natural center for transportation, distribution and trading of agricultural produce. Gluts and shortages of these products caused extreme changes in price. An exchange was needed that would bring together a market to find potential buyers and sellers of a commodity instead of making people bear the burden of finding a buyer or seller. In 1848, the Chicago Board of Trade (CBOT), the world’s first futures market, or futures exchange, was formed. Trading was originally in futures and the first contract was written on March 13, 1851.
Futures Exchanges
Different futures exchanges trade different commodities. In addition, each future exchange accepts different futures orders. Since not every exchange allows every order it is necessary to talk with you broker about which orders are permitted in the markets you trade. The following is a list of the major commodity exchanges, their commodities, and the orders that they accept:
Chicago Board of Trade
Location: Chicago, IL
Commodities
o Corn
o Oats
o Soybeans
o Soybean Oil
o Soybean Meal
o T-Bonds
o T-Notes
o Muni Bonds
o 5 Year Notes
o 2 Year Notes
o DJIA Index
Acceptable orders: Market, Market on Close, Limit, Stop, and Fill or Kill Orders
Chicago Mercantile Exchange
Location: Chicago, IL
Commodities
o Live Cattle
o Lean Hogs
o Lumber
o Feeder Cattle
o Pork Bellies
Acceptable orders: All futures orders are acceptable.
Index and Option Market
Commodities
o S&P 500
o Mid-cap 400
o NASDAQ 100
Acceptable orders: All futures orders are acceptable.
International Monetary Exchange
Location: Chicago, IL
Commodities
o T-Bills
o Euro Dollars
o Canadian Dollar
o Euro Currency
o Australian Dollar
o Mexican Peso
o Euro Yen
o Japanese Yen
o British Pound
o Swiss Franc
Acceptable orders: All futures orders are acceptable.
New York Comex
Location: New York, NY
Commodities
o Copper
Acceptable orders: For Copper only, acceptable are Market, Market on Close, Limit, Stop, and Fill or Kill.
Commodities
o Gold
o Silver
Acceptable orders: For Gold and Silver, acceptable are Market, Market on Close, Limit, Stop, and Fill or Kill. Stop Limits are acceptable only on a not-held basis.
New York Cotton Exchange
Location: New York, NY
Commodities
o Cotton
o Orange Juice
o Dollar Index
Acceptable orders: Market, Market on Close, Limit, Stop, and Fill or Kill.
New York Coffee, Sugar & Cocoa Exchange
Location: New York, NY
Commodities
o Coffee
o Sugar
o Cocoa
Acceptable orders: All futures orders are acceptable.
New York Mercantile Exchange
Location: New York, NY
Commodities
o Unleaded Gasoline
o Platinum
o Palladium
o Heating Oil
o Crude Oil Natural Gas
Acceptable orders: All futures orders are acceptable.
New York Futures Exchange
Location: New York, NY
Commodities
o New York Stock Exchange Index
o CRB Index
Acceptable orders: All futures orders are acceptable.
Kansas City Board of Trade
Location: Kansas City, MO
Commodities
o Kansas City Value Line
o Kansas City Mini Value Line
Acceptable orders: All futures orders are acceptable.
o Kansas City Wheat
Acceptable orders: Market, Market on Close, Limit, Stop and Fill or Kill.
Minneapolis Board of Trade
Location: Minneapolis, MN
Commodities
o Minneapolis Wheat
o Minneapolis White Wheat
Acceptable orders: All futures orders are acceptable.
Author: Stephen Bigalow
Article Source: EzineArticles.com
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Copper Futures
Copper may be one of the original members of the commodity trading world. Copper was first worked about 7,000 years ago and its softness, color and abundance made it a widely desired commodity. Today, this metal is a perfect indicator of the world’s economy. The third most widely used after iron and aluminum, copper is found in such industrial applications as construction, industrial machine manufacturing and electronics. Because of its demand, trading copper futures has become an important part of futures trading.
Because of the high demand in a wide variety of applications, commodity investing in copper futures can be very profitable. It is likely that demand will only continue to increase as more applications for this versatile metal are found. As supplies become more difficult to locate, the value of this metal will continue to climb, creating additional investment options for traders in this unique metal.
Reasons To Invest In Copper Futures
Futures trading can be a solid way to profit from investing in copper. As with any other commodity, copper futures provide investors with the ability to buy and sell this metal; a fact which is true for any commodity when trading futures. Futures is the investment strategy where you can purchase the right to buy or sell a commodity at a later date; in addition, you are able to leverage your investments, allowing you to control large sums of a particular commodity for a small price. Copper futures allow you to do this with one of the most versatile assets in the world.
Contract Details For Copper Futures
o Basic Trading Unit – 25,000 pounds
o Units of Price – Dollars and cents per troy ounce
o Tick (Basic Unit Of Change) – $0.0005 per pound or $12.50 per contract. A one cent movement in price creates a $250 movement per contract
o Trading Periods – Options contracts are traded beginning with the current month and typically the following twenty-three months
o Options Trading – Options trading includes market orders such as stop limits, buy straddles and buy strangles, among others
o Margin Requirements – Margins are required for open futures and short options positions. The margin requirement for an options purchaser will never exceed the premium paid
Who Handles The Copper Futures Trading?
Many futures markets exist throughout the world for trading copper futures. One of the most important locations for trading is the COMEX in New York City. This market was formed by a merger between New York Mercantile Exchange and the Commodity Exchange in 1994 and is now the world’s largest commodity futures exchange. By trading copper futures at an exchange, you received several distinct advantages:
o Contracts Are Standardized – This ensures that the agreement is consistent with accepted business practices
o Contracts Are Secure – Exchanges are able to offer commodities trading that is affordable and has well-established risk management opportunities
o Contract Prices Are Real-Time – Prices are instantly available to traders
o Contract Parties Are Unknown – Since trades are made through commodity brokers, trades are made anonymously
o Contracts Can Be Delivered Safely – Although futures contracts are rarely ever filled and delivered, futures exchanges offer solutions for safe delivery
o Futures Exchanges Are Ethical – Exchanges offer safe, fair, and orderly markets that are protected by its strict financial standards and surveillance procedures
o Insurance Is Available – Exchanges offer futures options and hedging insurance for additional investment opportunities
Is Investing In Copper Futures Right For You?
Deciding to include copper futures in your investment strategy is a very personal choice. Your trading plan, your investment objectives and your financial situation should all be first considered. Since you are trading on the margin, copper futures are allow you to contract large sums of money and it is even possible to lose more that your original investment while futures commodity trading. You should make sure that you understand copper futures trading and the related conditions before you enter.
Conclusion
Copper is a highly desirable commodity and its futures market can be very profitable. With an ever-increasing demand and increased pressure to mine it, copper futures will continue to be a profitable investment commodity well into the future. If you understand the process and learn the conditions involved, you can be a successful trader in one of the world’s oldest commodities.
Author: Stephen Bigalow
Article Source: EzineArticles.com
Provided by: Canada duty tariff
Futures Options – Opening New Markets
Futures options are similar to futures themselves in that both give the holder the right to buy or sell the underlying commodity for a specific price on a specific day. Beyond this there are some significant difference between the two and how they are traded.
Rights and Requirements
The main difference between futures options and futures has to do with rights and requirements. Futures options give the holder the right to buy or sell (depending on the option) the underlying commodity for a specific price on a specific date while futures obligate the purchase or sale. While there are investment strategies for futures that eliminate the need for an investor to accept delivery of 10 tons of pork bellies, the basic concept is the same; futures require the buyer to take delivery (in one form or another) of the commodity in question.
Futures Options Contracts
Futures options markets trade options contracts, which specify the underlying asset, the expiration date, and the strike price. Those involved in day trading can trade options contracts to make a profit on the difference between the buying price and the selling price when the options are sold before expiration, or to make a profit from the underlying asset when they are exercised.
As with futures contracts, futures options contracts are traded by day traders and longer term traders in futures markets, and also by non traders with an interest in the underlying commodity. When traded for the underlying commodity, options contracts work the same way as futures contracts, but only give the right to buy or sell the underlying commodity rather than the obligation. For example, a farmer will sell options on his cattle if he thinks prices are going to drop before he takes them to market; conversely, a meat processing company will buy futures on cattle if they believe that prices will rise. Both are non-traders but they have interests in the commodity. The final part of the equation is the investor who attempts to make a profit by successfully trading these commodities.
Futures or Cash Settlement
Futures options are settled in either cash or a futures contract in the underlying security when they are exercised. In-the-money, cash-settled futures options are valued using the trading price of the underlying security at expiration, and the profit is placed into the trader’s account. In-the-money, futures settled options are converted into the appropriate futures contract, which the trader can then buy or sell to realize the profit or hold the purchase and simply continue commodity trading.
Because futures options contracts only give the holder the right to purchase, successful traders don’t have to purchase losing positions. If an investor is holding a position that has not prospered according to the contract, he or she can just walk away from the agreement and let it expire. This is the benefit of futures options over standard futures contracts; the ability to walk away from a losing position leaves the investor with a reduced exposure. Conversely, an investor that is holding a contract when the buyer does not exercise his or her position has profited by receiving the premium for selling that position. Such a strategy is helpful during negative periods in the market because it allows for profit taking in a less risky manner.
Conclusion
Futures options, although they are quite similar to standard futures contracts, still possess features that make them very desirable for successful trading. This type of trading can open new markets for investors looking to make money.
Author: Stephen Bigalow
Article Source: EzineArticles.com
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Paper Trading Futures – Getting Your Thoughts Down on Paper
Dont you love just throwing away money? Oh, not one of your favorite things? Well, most people feel the same way so jumping into something like futures trading is pretty scary. The good news is that you can learn by throwing away some virtual money and not the real stuff with something called paper trading futures. Thanks to the wonderful world of the Internet, paper trading futures is an easy, free way to simulate futures trading without the financial risk. Before we go deeper into paper trading futures, lets talk about futures trading in general.
Futures trading is different from investing in the stock market or bonds since you dont actually own anything; in futures trading, you are speculating on the future direction of the price in the commodity you are trading. This is like a bet on future price direction. The terms “buy” and “sell” merely indicate the direction you expect future prices will take. He or she must only deposit sufficient capital with a brokerage firm to insure that he will be able to pay the losses if his trades lose money. (Notice the words pay the losses. When paper trading futures, you can ignore those nasty words!)
Futures trading is a sort of insurance plan for those who are trading and investing. A farmer may sell futures on his wheat crop if he thinks the price will go down before the harvest; conversely, a bread manufacturer may buy futures if they think the price of wheat is going to rise before the harvest. Regardless of the price movement, both are guaranteed their price. The final component of the equation is the investor in futures trading who looks for changes in the futures markets and seeks to gain advantages by buying or selling at a profit.
The Potential of Futures Trading
Trading futures is an excellent way to make money. It is said that Richard Dennis, a famed commodities trader, was able to parlay $1,600 of borrowed money into $200 million over ten years. Futures trading has a bad reputation as being filled with risk and while there is risk; the truth is that futures trading is only as risky as a trader makes it. This is not the lottery or a trip to the casino; if you take a conservative approach, look for a reasonable return and make this a business then the probability of success in commodity trading is very good. The downside of paper trading futures is that even if you amass a $200 million fortune, you cant collect it. Remember were just learning while paper trading futuresyou can spend real money when you open a commodities account!
Getting Started Paper Trading Futures
There are a large number of companies on the Internet that offer free paper trading; a simple Google search will give you more choices that you can imagine. These companies offer this service in hopes that after you get comfortable paper trading futures, you will open a commodity account with them. In the meantime, once you have registered simply follow the directions of the commodity trading software and you are ready to begin.
What You Might Notice
If you put the cart before the horse and try to implement positions before you understand futures trading, you will be in for a surprise. The language of futures trading is different; there is terminology you need to learn, strategies that you wont understand and even the trading software will probably be confusing. So before you try to begin commodities trading, go back to school and learn the terms, learn the techniques and learn the software where you are paper trading futures.
Is Paper Trading Futures Important?
In and of itself, paper trading futures is not important; it is merely a simulation of the things required to trade futures in the real world. What is important while paper trading futures is the approach you take; if you treat this like a game or dont understand the importance of learning futures trading, you should seriously reconsider attempting to trade futures. This is a skill and the consequence is losing your money so dont take paper trading futures lightly.
Conclusion
It is difficult to find another business opportunity where you can practice and learn for free. Take advantage of this unique opportunity and start paper trading futures today.
Author: Stephen Bigalow
Article Source: EzineArticles.com
Provided by: Excise Tax
Futures Trading for Beginners – Getting Started
They say a journey of a thousand miles begins with the first step. This is true of futures trading for beginners as well. Even if you have investment experience you might not know the difference between stock trading and futures; dont get worried because that is the reason for this discussion. What is going to happen is that we will look at futures trading for beginners and give you some of the basics to get you started. If you have never been exposed to futures trading, its ok; the journey may be a thousand miles but we will take the first step together.
What are futures?
Futures trading is different from investing in the stock market or bonds since you dont actually own anything. In futures trading, you are speculating on the future direction of the price in the commodity you are trading. This is different for beginners in futures trading; it is like a bet on the future price direction. The terms “buy” and “sell” merely indicate the direction you expect future prices will take. He or she must only deposit sufficient capital with a brokerage firm to insure that he will be able to pay the losses if his trades lose money.
Futures trading is a sort of insurance plan for those who are trading and investing. A farmer may sell futures on his wheat crop if he thinks the price will go down before the harvest; conversely, a bread manufacturer may buy futures if they think the price of wheat is going to rise before the harvest. Regardless of the price movement, both are guaranteed their price. The final component of the equation is the investor in futures trading who looks for changes in the futures markets and seeks to gain advantages by buying or selling at a profit.
The is the potential of futures trading?
Trading futures has the potential to be an incredible profit maker. It is said that Richard Dennis, a famed commodities trader, was able to parlay $1,600 of borrowed money into $200 million over ten years. While his results are truly extraordinary, not everyone can expect the level of successful trading he achieved, there is good news for every investor; you can make money in futures trading. You may only be a beginner trading futures, but you are savvy enough to recognize the potential in futures trading.
What are futures markets?
The beginner in futures trading needs to understand that futures are not trading on the stock market. Some of the locations are well known like the Chicago Board of Trade, the New York Mercantile, the New York Cotton Exchange and the Chicago Mercantile Exchange. Some of the better known futures markets are:
Agriculture This is a broad, commonly traded futures which includes such things as wheat, soybean and corn futures.
Currency Trading Currency trading, also known as FOREX (foreign exchange) trading, involves buying and selling currency from many different countries such as the US dollar, the British pound and the Japanese yen.
Interest Rate Futures This market focuses on financial transactions, interest rates and bonds.
Energy Futures This market centers its attention on gas and oil futures.
Foods This sector includes items such as coffee, sugar and orange juice.
Metals This is one of the more popular and better known sectors. The typical commodities in metals are gold and silver.
What do you need to do to get started?
There are several things you need to do as a beginner in futures trading:
1. Start learning There is no substitute for education. Read books about futures trading, talk with others that trade futures and search the Internet for information about futures trading. Once you start investing your own money, you will be glad to understand futures trading.
2. Create a commodities trading plan This is crucial. You need to outline your goals and objectives as well as your strategies in an unemotional manner. This way, when greed and fear interferes with your decision making process, you will have already decided your course of action.
3. Select a broker This is a personal, but important part of the process. You can implement your own trades but you need someone to actually place the orders. Some full-service brokers offer more services and most Internet brokers offer lower commissions. Even though youre a beginner in futures trading, define what you want from your broker and find someone who meets your needs.
4. Use Japanese Candlesticks This powerful commodity trading and charting system will help not only the beginner in futures trading but is valuable to the expert as well. Candlesticks will help you to find the trends in the market that most others miss.
Conclusion
Futures trading for beginners is nothing more than learning, defining your processes and sticking to your trading plan. This journey is no longer a thousand miles for you; youve already taken the first step so keep moving toward you goal!
Author: Stephen Bigalow
Article Source: EzineArticles.com
Provided by: Canada duty
Futures Trading – Balancing Risk and Reward
There is a paradox in futures trading; get-rich trading usually leads to poverty. While it is true there are many people that do get rich in futures trading, the norm is to lose. Because most investors dont do the things necessary to be successful, they find failure is the only other alternative. This is a practice that requires training, experience and plenty of technical analysis; but then doesnt all successful investing?
The Risks of Futures Trading
First, lets back things up a bit; while futures trading can be very risky, the rewards can be very nice as well. Richard Dennis, a famed commodities trader, was able to parlay $1,600 of borrowed money into $200 million over ten years. While his results are truly extraordinary not everyone can expect the level of successful trading he achieved, there is good news for every investor; you can make money in futures trading. Now that we have made this statement, we can talk about futures trading.
Futures trading has a bad reputation as being filled with risk and, while there is risk, the truth is that futures trading is only as risky as a trader makes it. This is not the lottery or a trip to the casino; if you take a conservative approach, look for a reasonable return and make this a business, then the probability of success in commodity trading is very good.
What is Futures Trading?
Futures trading is different that investing in the stock market or bonds since you dont actually own anything; in futures trading, you are speculating on the future direction of the price in the commodity you are trading. This is like a bet on future price direction. The terms “buy” and “sell” merely indicate the direction you expect future prices will take. He or she must only deposit sufficient capital with a brokerage firm to insure that he will be able to pay the losses if his trades lose money.
Futures trading is a sort of insurance plan for those who are trading and investing. A farmer may sell futures on his wheat crop if he thinks the price will go down before the harvest; conversely, a bread manufacturer may buy futures if they think the price of wheat is going to rise before the harvest. Regardless of the price movement, both are guaranteed their price. The final component of the equation is the investor in futures trading who looks for changes in the futures markets and seeks to gain advantages by buying or selling at a profit.
What are Futures Markets?
In addition to agriculture, there are a number of different futures markets. Among these markets are:
Currency trading such as the US dollar, the British pound and the Japanese yen
Interest rate futures on financial transactions and bonds
Energy Futures on oil and gas
Food sector on items such as coffee, sugar and orange juice
Metals such as gold and silver
Each futures market has producers and consumers who need to hedge their risk from future price changes. The speculators, who do not actually deal in the physical commodities, are there to provide liquidity. This maintains an orderly market where price changes from one trade to the next are small.
Is Substantial Risk Inevitable in Futures Trading?
Minimizing risk in futures trading is easy; instead of taking delivery or making delivery, the speculator merely offsets his position at some time before the date set for future delivery. If price has moved in the right direction, he will profit. If not, he will lose. Greed and fear are the enemies of futures trading and the cause of most big losses.
Futures trading is not for everyone; it possesses risks that are limitless to an uninformed, undisciplined investor. With solid trading rules and an understanding of the markets and techniques required, futures trading can be a very rewarding endeavor.
Author: Stephen Bigalow
Article Source: EzineArticles.com
Provided by: Excise Tax
Online Futures Trading – Getting Your Start With Paper Trading
Online Futures Trading – Getting Your Start With Paper Trading
In sports the saying is that you only play as good as you practice. In other words, if you dont work hard learning to do something well you will never do it well when the game begins. The same is true when it comes to investing; if you dont learn the concepts of successful trading before you start investing, you are in danger of losing a lot of money very fast. Thanks to the wonderful world of computers, you can prepare for online futures trading by paper trading.
What is Paper Trading?
At this moment you probably understand online futures trading, but paper trading may be strange to you. Paper trading is a method of online futures trading where you can practice investing in the stock market with a hypothetical brokerage account. Everything about this type of online futures trading is the same as the real thing but with paper trading, you lose nothing. If you make a bad purchase when you are paper trading, it is recorded in your account but since you didnt actually do any online futures trading, you didnt lose any real money.
What is Online Futures Trading?
Online futures trading is different from trading common stocks or bonds since you dont actually take possession of anything. In online futures trading, you are speculating on the future direction of a commoditys price that you are trading on the Internet. It is kind of like placing a bet on which way a price will move. Buy” and “sell” are terms that indicate the direction you expect future prices will take. You only need to deposit enough money with a brokerage firm to insure that you will be able to pay the losses if your trades lose money; take a good look at the words pay the losses. When paper trading futures, you are immune from those dirty words!
Online futures trading offers a form of price protection for those who are trading and investing. A farmer may sell corn futures on his crop if he thinks the price will go down before the harvest; conversely, a cereal manufacturer may buy futures if they think the price of wheat is going to rise before the harvest. Regardless of the price movement, both are guaranteed their price. The other person in the deal is the investor who never sees the trading floor, but is doing online futures trading and looking to gain advantages by buying or selling futures at a profit.
Getting Started with Online Futures Trading
There are quite a few companies on the Internet that offer free paper trading; a simple Google search will give you more choices that you can imagine. These companies offer this service in hopes that after you get comfortable with online futures trading, you will open a commodity account with them. In the meantime, once you have registered, simply follow the directions of the commodity trading software and you are ready to begin.
What You Might Notice
If you decide to get started without learning anything about online futures trading, you will be in for a surprise. The language of futures trading is different. There is terminology you need to learn, strategies that you wont understand and even the trading software will probably be confusing. It’s kind of like assembling a childs bike; before you start, read the directions. Before you try to start commodities trading, learn the terms, learning the techniques and learn the software where you are doing online futures trading.
Is Paper Trading Futures Important?
By itself, paper trading futures is not important; it just simulates the things required for online futures trading. What is important while paper trading futures is the approach you take. If you take this lightly or dont understand the importance of learning futures trading, you should seriously reconsider ever entering the futures markets. This is a skill to learn and not doing so means losing your money, so dont take your paper trading or your online futures trading lightly.
Conclusion
Online futures trading is a unique business opportunity where you can practice and learn for free. A successful trader will use the opportunity to practice investing before trying online futures investing.
Author: Stephen Bigalow
Article Source: EzineArticles.com
Provided by: Excise Tax
Learning To Trade Futures
It has been said that success in this life is made up of equal parts of learning and yearning. For nearly everyone, it’s possible to accomplish your goals if you have sufficient desire and education. If your desire is to trade futures, you already have a direction; next, you need to couple a relentless pursuit of education with a strong desire to succeed at something very interesting and potentially rewarding. Commodity trading can be complex and frustrating but it is also well worth the effort.
Necessary Traits to Trade Futures
What are the four things necessary to trade futures? They are:
1. You need to have the desire to succeed as a trader There is a certain air that is needed to trade futurespart student, part bulldog, part daredevil. Desire to succeed will push you to learn more and trade futures smarter.
2. Persistence and motivation This is a by-product of your desire. Once you have the desire to succeed, you will be willing to put in the time to learn to trade futures and the motivation to make your new business a success.
3. Discipline, discipline, discipline Discipline to learn the nuances of how to trade futures, discipline to do technical analysis, and the discipline to make smart futures trades. If you trade futures like it is a business you will acquire the discipline to be successful.
4. Someone to help you get started Whether you learn from someone you know, from going to seminars, or reading books, you will need some help when you start to trade futures. It is important to learn the terminology, techniques and practices that make a successful trader and that knowledge is best passed down from person to person.
An Overview of Futures Trading
Futures trading is different that investing in the stock market or bonds since you dont actually own anything; in futures trading, you are speculating on the future direction of the price in the commodity you are trading. This is like a bet on future price direction. The terms “buy” and “sell” merely indicate the direction you expect future prices will take. He or she must only deposit sufficient capital with a brokerage firm to insure that he will be able to pay the losses if his trades lose money.
Futures trading is a sort of insurance plan for those who are trading and investing. A farmer may sell futures on his wheat crop if he thinks the price will go down before the harvest; conversely, a bread manufacturer may buy futures if they think the price of wheat is going to rise before the harvest. Regardless of the price movement, both are guaranteed their price. The final component of the equation is the investor in futures trading who looks for changes in the futures markets and seeks to gain advantages by buying or selling at a profit.
The Potential of Futures Trading
Trading futures is an excellent way to make money. It is said that Richard Dennis, a famed commodities trader, was able to parlay $1,600 of borrowed money into $200 million over ten years. Futures trading has a bad reputation as being filled with risk and while there is risk, the truth is that futures trading is only as risky as a trader makes it. This is not the lottery or a trip to the casino; if you take a conservative approach, look for a reasonable return and make this a business then the probability of success in commodity trading is very good.
Some of the better known futures markets are:
Agriculture This is a broad, commonly traded futures which includes such things as wheat, soybean and corn futures.
Currency Trading Currency trading, also known as FOREX (foreign exchange) trading, this involves buying and selling currency from many different countries such as the US dollar, the British pound and the Japanese yen.
Interest Rate Futures This market focuses on financial transactions, interest rates and bonds.
Energy Futures This market centers its attention on gas and oil futures.
Foods This sector includes items such as coffee, sugar and orange juice.
Metals This is one of the more popular and better known sectors. The typical commodities in metals are gold and silver.
Trade Anywhere
One of the real advantages when you trade futures is that you can literally do it anywhere. Since market data can be delivered easily via the Internet, you are free from any geographic restrictions, allowing you to implement trades from almost any location in the world.
Getting Started
In order to get started, you need to equip yourself with a good understanding of how to trade futures, which markets you will target, and above all, you need a trading plan. The trading rules in your plan will help you to understanding yourself and your responses to the things you see on the charts. You need an unemotional approach, backed up by the confidence that you can do it. This confidence comes from proving to yourself that you can win more often than you lose when you trade futures.
Author: Stephen Bigalow
Article Source: EzineArticles.com
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Futures Exchanges – A Wealth Of Opportunities
Futures trading has the potential to be both exciting and profitable. The key to success is learning the details involved. A basis for understanding futures is to knowing the futures exchanges or places where futures are traded. The futures exchanges are located in various locations throughout the country; they have different commodities trading options at each location and the rules vary as well.
General Futures Exchange Information
As you may know, you will not actually do business with the futures exchanges listed below. You will place trades with your broker who will take your orders to the futures exchange floor for you. If you have been paper trading options or futures, you likely already have an account for commodities trading so you are ready to start. If not, you should select a broker and even consider paper trading for a while. Paper trading is the act of creating a fictitious account that trades just like a real one; this is an excellent way to learn about commodity trading. There are futures exchanges throughout the world but lets focus on the ones in the US. The futures exchanges below are in Minneapolis, Kansas City, New York and Chicago.
Futures Exchanges
Like the stock market, different futures exchanges trade different commodities. In addition, each futures exchange accepts different market orders. Since not every futures exchange permits every type of order it is necessary to talk with your broker about which orders are permitted where you are trading. The following is a list of the major futures exchanges, their commodities, and the orders that they accept:
Kansas City Board of Trade
The Kansas City Board of Trade is located in Kansas City, MO. This market accepts the following commodities: Kansas City Value Line and Kansas City Mini Value Line. The Mercantile accepts all types of futures orders. In addition, the Board of Trade accepts Kansas City Wheat with market, market on close, limit, stop and fill or kill trades.
Minneapolis Board of Trade
Located in Minneapolis, MN, the Minneapolis Board of Trade accepts the following commodities: Minneapolis Wheat and Minneapolis White Wheat. All futures orders are acceptable at this exchange.
Chicago Board of Trade
Located in Chicago, IL, the Chicago Board of Trade deals with these commodities: wheat, corn futures, oats, soybeans, soybean oil, soybean meal, T-Bonds, T-Notes, municipal bonds, 5-year Notes, 2-year Notes and DJIA Index. Acceptable orders here are: market, market on close, limit, stop, and fill or kill orders.
Chicago Mercantile Exchange
Also located Chicago, IL, the Chicago Mercantile Exchange trades live cattle, lean hogs, lumber, feeder cattle and pork bellies. The Mercantile accepts all types of futures orders.
International Monetary Exchange
Located in Chicago, IL, the Monetary Exchange trades T-Bills as well as trading FOREX; Euro dollars, Canadian dollars, Euro currency, Australian dollars, Mexican pesos, Euro yen, Japanese yen, British pounds and Swiss francs. The Monetary Exchanges accepts all futures orders.
New York Comex
Located in New York, NY, Comex accepts market, market on close, limit, stop and fill or kill orders for copper trading. In addition, Comex accepts market, market on close, limit, stop and fill or kill orders for gold and silver trading. Stop limits are only allowed on a not-held basis.
New York Cotton Exchange
Located in New York, NY, the New York Cotton Exchange trades cotton, orange juice, dollar index. The Exchange accepts market, market on close, limit, stop and fill or kill orders.
New York Coffee, Sugar & Cocoa Exchange
This market is located in New York, NY and trades coffee, sugar and cocoa. All types of futures and options contracts are accepted here.
New York Mercantile Exchange
The New York Mercantile Exchange is located in New York, NY. This market accepts the following commodities: unleaded gasoline, platinum, palladium, heating oil, crude oil futures and natural gas. The Mercantile accepts all types of futures orders.
New York Futures Exchange
The New York Mercantile Exchange is located in New York, NY. This futures market accepts the following commodities: New York Stock Exchange Index and the CRB Index. The Mercantile accepts all types of futures orders.
Conclusion
For those wanting to become involved in futures trading, there is a wealth of opportunities. Whether you want to start trading FOREX or coffee futures, you can find the correct futures market to do your business. It is wise to discuss your investment philosophy with your broker first and then use your knowledge, your trading plan and a system like Japanese Candlesticks to help you be successful when you head for the futures exchanges.
Author: Stephen Bigalow
Article Source: EzineArticles.com
Provided by: Guest blogger
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