Is it worth it to trade futures in forex?

A few tips for beginners who are going to hit in trading futures and make this their first capital. You know that you have to do for this, and perhaps decide for themselves whether or not you do to address this. Do you generally deal with this

Every year thousands of people who have the courage to opt for trading in futures as the main method of strengthening their own financial situation. And if you're one of them, the reason for this, as a rule, is as follows:

- You've already nazhili a condition for the shares, mutual funds or bonds, and now want to try their luck with futures;

- You have something to work, selling stocks or bonds or investing in mutual funds, but you are tired and you want to do something else;

- Equities, bonds and mutual funds have brought you a little profit, or not brought at all, and you want to change the type of activity;

- Have you heard about someone who is not a very good understanding of commercial matters, but managed to get into condition for the pork, cotton or any other product, and finally someone decided to himself: "Maybe I try? .

Whatever the main reason most people come to the futures market for the money. And they are not mistaken. Few areas of investment can promise such a profit as futures. Unfortunately, many are so concerned about "the promised profit, forgetting that the risk of, forget about the complexities that can waylay them, and therefore the transaction fail.

The first question to be asked if you intend to enter into a futures transaction, it is not "how to conclude?" But "whether it conclude?". New to traders should not rush to answer, but better to consider the advantages and disadvantages of transactions of this kind.

Investment Objectives

The more you risk, to make a deal
In entering into commodity futures, a newcomer is faced with the risk twofold. The first, material risks, and secondly - the psychological risk.

Want to succeed? If yes, then you must decide at the outset than you would market futures - a casino or a serious business?

Material risk
1 Futures - this is purely speculative type of investment. Sign futures - is willing to gamble the entire capital. It may be that you nazhivete a fortune in futures, but the great and the likelihood that you will lose all that is invested. You can even lose more. If you invested $ 10,000 in the deal that brought $ 15,000 loss, brokerage firm then you would require $ 5000.

2 In general, you should not invest more than 10% of net capital in speculative investments. Futures should not be your first transaction. Ideally, an individual should save money for a rainy day, to make long-term investment in equities, bonds and mutual funds, and only obzavedyas own home, you can deal with speculative investments, such as futures.

3 If you are going to conclude their own futures, you must be at least $ 10000, that you're willing to risk. In other words, your way of life should not be greatly affected if you lose that money. If you have little money to the cause, you need to pay interest on the loan or pay for utilities, you risk splurging.

In summary, paragraphs 2 and 3, we can assert that in order to enter into futures, an individual must have a net capital of not less than $ 100000. If you decide on the futures, not with such a sum, it can deprive you of their livelihood. This explains the high percentage of failures at the beginning traders.

Psychological risk
1 Do not forget about leverage or leverage. The use of leverage when entering into futures transactions could be as enormous profits and huge losses. To purchase shares in the amount of $ 100,000, you must pay $ 100000. Even if you pay part of the sum through a loan, you must lay out $ 50000. In this case, financial leverage is 2 to 1. However, to sell futures at 30-year bonds worth $ 100,000, you may have only $ 3000, and in this case, leverage would be 33 to 1. Many traders attracted by the fact that it is not necessary to have a large amount to start trading in futures. However, the amount they have invested, or the rapidly rising or falling dramatically. If the value of portfolio shares to rise by only 3%, you get a profit of 100% or lose your $ 3000 as requested by the margin, depending on whether to increase or decrease you have played.

2 to assess whether you are willing to take risks. Remember that any trader will sooner or later fall into a situation when the market turns sharply against him and forced to bear heavy losses. However, the professionals, in contrast to the novice traders are not so upset because of the failure, and always have in stock the necessary tools to survive the difficult period. So it should not be va-bank.

Few newcomers can cope with emotional distress, lost in a short time the lion's share of their investment or profit earned by hard work. Very often, after a series of failures of the trader ceases its activities, and misses the opportunity to conclude a bargain, which would be compensated for all his previous losses. If you are inclined to lead themselves in the same way, the futures - not for you. How to teach an old adage, nothing to fear - nothing have.

Bank Deposit

Mechanism
Bank deposit belongs to the category of financial instruments with fixed income (fixed income), ie you know the exact amount of their income, regardless of how well your funds will be used. In fact, the bank acts as an intermediary between you as a creditor, and those who ultimately use your money.

Risk
However, if you are dealing with a bank deposit in the United States, in the event of financial insolvency of your bank of its obligation to assume the state, represented by the Federal Deposit Insurance Corporation (Federal Deposit Insurance Corporation). Size responsibility FDIC - to $ 100000.

Yield
The average yield on bank deposits was 6.35% per annum, with variability from 5.98% to 6.73%.

For and Against
High reliability, which is achieved professional management of your funds and insurance contributions at the federal level. Low profitability and the inability to use as collateral to obtain credit in the brokerage firm.

Government treasury bills

Mechanism
Your debtor becomes a state, such as the U.S. government. In walking the three major types of U.S. Treasury bonds:
T-Bill T-Note T-Bond
Term (years) to 1 1-10 10-30

Interest payments to holders of T-Notes and T-Bonds is produced twice a year. Upon termination of the holders are paid in accordance with the nominal value.

For short-term T-Bills, no interest is paid. Selling them is carried out at a discount, upon expiration of the holder shall be paid in accordance with the nominal value.

Risk
To lose money invested in Treasuries, is possible only in case of a default on the obligations of the United States of America. That's why Treasuries are often seen as a benchmark of reliability.

Yield
The average yield on Treasuries at 6% per annum.

For and Against
Extremely high reliability. Can be used as collateral for loans. Low compared to most financial instruments, yield.

Some features of the market
It is impossible to predict every turn in prices. In the market dominated by two feelings - fear and greed. In contrast to the rational motives, to hide that there is no need, greed is often masked by hope. And hope that a better trader than the belief that he will know in advance that it expects the market? But Judge for yourself - whether people can predict the future?

To enter into a profitable futures, you should not rely on predictions. Of course, it is possible that any person or organization may make a forecast, which will come true. However, no individual and no organization is unable to consistently and accurately predict all the ups and downs of market capital.

If you already have ceased to rely on the forecasts, you'll still have one more important task. You must be able to determine what the market trend today. Ultimately, this ability to bring you more value than a thousand projections.

Without failure there is no
Novice trader seriously accept the fact that one day it necessarily will fail. In fact, if you have time zafiksiruete losses, it will bring you a favor. Learning time to get rid of loss-making position, you can post vacated assets more profitable. The loss of money - it is bad, but if you reduce each loss to a minimum, it can be very profitable thereafter.

Many traders are starting their careers, seek to conclude as many lucrative deals, is not thinking about that in the pursuit of quick profits, they miss the opportunity to enter into a particular bargain. More experienced traders understand that the number of lucrative deals - it is often empty, nothing significant figures. Ultimately, it should be taken into account only the fact whether the total is offset by a total loss of profit. As long as you earn more than lose, no matter how many transactions were profitable: three out of ten, or seven out of ten. Index - to reduce losses to a minimum, a profit, on the contrary, increase.


Test
To check whether you are ready financially and psychologically to independently enter into futures, we offer you this simple test. To get it, you must do the following:

1. Go to the bank on the day when the street will be the most abhorrent weather.
2. Remove $ 10,000 in cash.
3. Exit the bank and money Throw up.
4. Once the money scattered in the maelstrom of wind and rain back home, sit on the sofa and say: "Damn, how I sglupil! Зря I did !..".
5. Just remember and continue to enjoy their lives. If you are able to, then you are truly ready to make a deal, and you have a chance of success. If not, you can still try (to tell the truth, the majority of traders are beginning to conclude transactions, unable to pass this test). Just do not forget that you are going to take risks and be willing to take responsibility for their actions.

Your key to success
You must have a plan. In every field of human activity there is a Michael Jordan - a professional who sets a high standard so that all others can only dream of such achievements. This also applies to futures. There are professional traders, who, relying on his wit and insight, always know that when a buy or sell, and get a huge profit. However, it is rather an exception to the rule. Very often, the novice trader comes to the market, it is not going to become Michael Jordan in the financial sector. Usually it is very costly.

If the novice trader is not used to plan their actions, it is possible with all the certainty that sooner or later he did not stand the psychological pressures and erred. No sane person will not open their own businesses without having a clear idea of what he wants to achieve and by what means. This also applies to futures. They should be regarded as a commitment rather than as an extra job or hobby, if you will, of course, not a fun thing to lose money.


Plan, you must take into account the following:

Yes. what market you choose;
b.. how do you determine whether to enter into a transaction;
into. how do you determine whether the transaction will bring profits;
d. How do you determine whether the transaction will bring losses;
e. What amount are you willing to risk;
f. What are the restrictions on the size of the margin.

Traders who are embarking on transactions, not answering these questions, relying on random, and their chances of success in ultimately small. More likely they will kochevat from one market to another, where it is not stopping, there remained a long time, to enter into unfavorable deals in the hope that in future the situation rectified, but in the bargain - simply get a small profit. The list is endless.

Your strategy should be clear, as a road map
When you sign a new deal, you should already know how you do, if the market situation is not in your favor, and how - if the circumstances are favorable to you. The carefully thought-out strategy - it is the only remedy against the emotional turmoil caused as a reaction to unforeseen events. In order to evaluate your plan of action, ask yourself, Do you often have to make subjective decisions, listening to the "inner voice". If every morning you wake up and take on global solutions from scratch, do not even dream of a successful career.

You must be disciplined enough to follow the strategy
If you have sufficient trading capital, and developed a detailed action plan, the only thing that can prevent you - this lack of discipline. A good strategy, and harsh discipline are mutually reinforcing. If you have a good strategy, you will be interested in making it clear to follow. On the other hand, if you're willing to follow its strategy, it should be a good strategy.


Corporate Promissory Notes.

Mechanism
Veksel is a win-win tool, because between you and the corporation has no intermediaries (banks), so you find yourself the sole recipient of any payment.
You are entitled to payment in the amount of face value (usually a multiple of $ 1000 or $ 5000) after the expiry date, and regularly (usually twice a year) in the amount established at the time of issuance of promissory notes (as a percentage of value).
Revenue for the corporate promissory notes are not dependent on how well the corporation, to sell you a bill, using the funds received.

Risk
To lose your money only in case of the corporate bankruptcy. In this case, the material claims are satisfied in the following order - Tax Services U.S., lenders (ie, you, as a holder of a bill), the shareholders.

Yield
Yield Corporate promissory notes at an average yield above Treasuries. As of November 18, 1998 bill IBM for a period up to 2019 and payments at a rate of 8.375% per year were sold for $ 121.75 to $ 100 (ie, a bill with a nominal value of $ 1000 could buy for $ 1217.5), which gives a yield of 5.99%

For and Against
Very high reliability at significantly higher compared to other debt instruments for the level of profitability. While you are denied the opportunity to participate in profits, the creditor that you are.

Promotions

Mechanism
You are leaving the position of the creditor, became co-owner of the corporations, which, in your opinion, is awaiting a commercial success. For corporations to attract equity capital is the most attractive way, as the funds received from the sale of shares does not require any return (the corporation shall not be liable for the redemption of shares from its shareholders), nor the payment of interest.

Risk
The risk when investing money in stocks is the inability to sell them at a price equal to or greater than pokupochnuyu value in the event of falling prices.

Yield
Can be measured by hundreds of per cent per annum. However, more realistic are conservative investments in blue chips, yielding an average of 18% per annum.

For and Against
The only situation in which to refrain from using this financial instrument - not to invest in shares of the funds for running costs and short-term (1-2 years) savings for emergency needs.


Rule 1: Consider the market trends.
The basic principle - that the purchase is performed in periods when the market is stable and prices are high enough. For some traders in the market trend takes a few minutes, for others - many months. It is important to determine what units of time will you measure the length of the trends - days, weeks or months. Maybe you prefer to review their position every day, maybe you'd prefer to pay attention only to the long-term trends. Thus:

1. define the unit of time, you are going to measure the periods of the market;
2. establish objective criteria by which you will determine the trend;
3. aware of market trends at the conclusion of transactions.

Rule 2: During the fixes damages.
During the fix damages - this is the most important rule of the trader. As already mentioned, it is impossible to consistently predict the future. You will have to accept that any trends in the market you will notice too late, and on another occasion, on the contrary, hurry event. It is therefore essential to reduce losses to a minimum and avoid the serious impacts that endanger your capital, career, and sometimes future.

Success in futures transactions, as in any other business

Expect the best, get ready for the worst
The only thing we can guarantee you is that when you start to conclude futures transactions, you are bound to be casualties. If this is upsetting to you, wait a bit and you will see the justice of these words. "Expect the best, get ready for the worst," - this may be the best advice that can give a beginner trader. And those newcomers who follow this advice, have all chances to make a good career.

If you enter into futures transactions, you will certainly happen that some of the following:
- You pay the maximum price of the day;
- You pay only the price of the day;
- The market will change in your favor, as soon as you leave home;
- You will be more disadvantageous transactions than you expected.

When situations of this kind, it becomes especially noticeable distinction between professional and amateur traders. Amateur will be angry, yell, blame the brokers, retroactively revise its plan, which he so carefully thought out, and wondered why is it Z "was not lucky." A professional, easy pozhmet shoulders, make an order for tomorrow and zasnet calm sleep to come back tomorrow to exchange.

Success in futures transactions, as in any other business, depends on:
- How clearly the objective (you enter into a transaction for money or for pleasure?);
- How well thought-out plan (see above);
- Do you have the resilience, on the one hand, and money, on the other, to withstand failures, which sooner or later, everyone faces.

Luck
Maybe you can expect that the conclusion of this article, we wish success to novice traders. We can not do so because we would have them disservice. The author of the book "Magicians market" ( "Market Wizards") Jack SCHWAGER asked Richard Dennis, which was very successful futures: "What is the role of luck in your case?". Dennis says: "In the end, luck plays no role. Absolutely no. I do not think that at least some of my colleagues have amassed state due to the fact that well-started his career."

So do not expect luck. Start the conclusion of futures transactions, carefully prepared, and do not forget the responsibility for their actions. Only then you will succeed.