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The Futures Market Investment Strategies

Tue Oct 27 2020 11:20
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If you don't have futures market investment strategies then hold on. Wait a bit before you enter the market. Because there is no meaning if you invest your money in the futures market. 

What do we mean by saying investing blindly? It means that going without any futures market strategy. There are a few basic rules of trading markets.  

If you are in the forex market, stock trading or you are trading investment instruments. Like futures contracts, securities, commodities, equities, more. There are many top trading strategies available for traders to use in the market.  

New traders don't know how to make a strategy for you. We are not here to sell any investment strategy to you. We are trying to help you know some popular futures trading strategies. Those are the strategies used by top traders for their futures market investment. 

Most Popular Futures Investing Strategies 

We are listing popular trading strategies used in futures market investment by traders. But along with these popular strategies, we will also get you to know about some less used methods. Why are these less popular strategies on our list? The reason is its profitability. 

A profitability ratio states how good a trading strategy is for traders. Based on profitability, we have also included a few trading strategies on this list. Before we tell you anything about these strategies, share this post with your fellows.  

#1. Going Opposite To Trends 

The very common strategy for futures market traders is to go opposite to the market trend. This strategy is not only applicable to futures traders but also you can use it in different financial markets. 

This strategy is used by global traders in various global markets. In this strategy, the traders have to invest opposite to the trend. If the market sentiment is bearish and everyone is selling their futures contract, then you have to buy. 

If the market is bullish, and everyone is buying more futures market investment. Then you have to sell assets from your trading portfolio to make some profits. 

#2. Follow The Trend 

If you want to trade the futures contract with the simplest and easiest strategy in this market. Then the best strategy is opposite to the first one. This strategy is all about following the market trend. 

No need to go opposite to the market trends. Buy or sell price action of the trader in the future market must be decided according to the trend. By doing this you can control the risk of commodity futures. 

#3. Fundamental Strategy 

Is there any fundamental strategy in futures market investment? Yes, you can trade futures according to fundamental strategies. For this, you have to rely on fundamental analysis rather than relying on technical analysis.  

Modern online trading promotes technical analytical reports more than fundamental rules. But you can make huge profits in the futures trading market if you are following fundamental strategy also. 

Many 'modern' traders will oppose you making trading decisions based upon fundamental strategies. 

#4. Pullback Strategy 

You may have listened to advisors that appeal to traders to go for a pullback strategy in futures market investment. This kind of strategy will work in any market and it is one of the top popular futures strategies. We assume that you know the basics of pullbacks and the time frame when it occurs.  

The pullback is a price breakout above or below a support and resistance level. This strategy can be applied during any of the two market sentiments. Whether it is bearish or bullish. 

As a futures trader, you have to react like an intraday trader. You have to make short term profits while buying or selling a futures contract during a pullback. 

#5. Breakout Trading Strategy 

Have a look at the charting, chart patterns, technical analysis? Or various trading indicators on your trading account or trading platform? If the futures options or any commodity futures trading instrument is breaking out. 

Then it is the right time to apply the breakout strategy. This strategy is popular in day-trading. You can trade futures with this strategy in futures market investment. 

#6. Depth Of Market Strategy 

What is the depth of the market in the future market? DOM which stands for the depth of the market window is an important tool. It calculates the number of open buy and sell orders in the market. 

But you can use this DOM window to make a new futures market investment strategy for you. In this strategy, you have to trade derivative products based on buy and sell order volume. 

Strategies To Avoid While Trading Futures 

The above strategies are those which you must follow when you are trading in the futures market. But there are some futures market investment strategies, those are not good for your trading portfolio. So you must avoid these kinds of strategies.  

We are also listing these strategies here because they seem very profitable to the new traders. But later most of the new traders lose their money using these trading plans.

 It doesn't mean that these strategies are not useful. They are useful for many traders, but to apply them to your trading routine, you must have knowledge.  

So without knowing more about futures trading & these strategies, never try these strategies. Only following trading courses and learning about futures market investment is not enough. You need to use these strategies to gain experience. 

Holding It For Long 

The first common trading mistake that new traders make is improper holding. They hold commodities, securities, equities, and other futures contracts for a long time. 

They believe that the top traders in the world are applying the same strategy. And they will get more return on investment if they do the same. But it is not going to make you rich with such a trading method in futures market investment. 

Going Without Liquidity 

Liquid markets are always useful for newcomers. But if you are trading in some stocks or any other instrument, which is not liquid in the market. Then you are going to lose your money. 

We are not claiming that you will lose, but the probability is that you will lose. Experts in futures market investment have stated this fact. 

Scalping Trap 

Scalping strategies are useful and many experts. Many of the top traders in the world use this technique. But is it good for you too? This is a big question because you don't have that knowledge in futures market investment.  

When you want to apply this strategy, you have to make quick and right decisions. But new traders fail to make such perfect decisions in a short time frame. So they lose money trading futures with this strategy. That is why it is known as the scalping trap for new traders. 

Conclusion 

You can get new, modern, and advanced trading strategies from various sources. Many trading books, guides, videos, and handbooks are there in the market. But before you adopt any trading strategy in your trading journey. You must get more knowledge about the whole trading system.  

Yes, you can try free trading to get familiar with various trading techniques. Know more about strategies first before you start applying any. Being careful while choosing strategies is very important. So always choose the perfect trading strategy for your futures market investment. 
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