How To Be a Better Futures Trader

By | November 24, 2014

A good futures trader is someone who can profit in any type of market condition. Traders come from many different backgrounds and lifestyles, but most good futures traders are:

Independent Thinkers

Great futures traders think for themselves. They follow what is happening with world-related events, the markets and other factors to make their trading decisions. In times of collapsing prices, they avoid panic and seek out paths to profit by using bearish strategies. Conversely, they do not get caught up in greed when others are feeling like prices will continue to rise with no inevitable correction. Avoiding this kind of crowd mentality allows the best futures traders to position themselves and profit at the right time. (Check out World’s Greatest Investors to learn more.)

Strong Analysts

To be a good futures trader, you must understand technical and fundamental analysis. The more you are able to apply your understanding, the better you will be at spotting trading opportunities. To do this you want to learn as much as you can about all the different forms of analysis. This will help you gain the knowledge and the experience necessary to make better trades. While this may seem like an enormous task, in reality it’s not. It can be done during your leisure time by reading different books, magazines, visiting futures-related websites, watching the news and by paper (practice) trading. (Read our related article Blending Technical And Fundamental Analysis to learn more about doing this.)

Active Learners

To continue learning new ways of trading, consider going to seminars or other events where you can interact with other traders and learn to accept and use new ideas. This allows you to learn from other traders’ mistakes, meaning that your odds of having more successful trades increase.

Handy with the Tools of Their Trade

When you are trading futures information is key. You want to make sure that you have the ability to place trades 24 hours a day, have real time quotes, software to help you analyze the markets quickly and be able to receive fast executions. With these tools you will be able to react quickly to the changing market conditions.

The Bottom Line

Being a good futures trader means staying informed. Inform yourself about different forms of analysis, different strategies and learn from the mistakes of others. Trust in your well-researched strategy and your diligence will pay off. By following these simple tenets, you are increasing your odds of seeing more profits and fewer losses in these challenging yet rewarding markets. (For additional tips on become a great trader, read our related article Patience Is A Trader’s Virtue.)

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