3. How Are Futures Traded?
Trading futures has become quite popular in many markets, especially in day trading. These kinds of trades offer a wide variety of markets and they can be traded at a low cost. Futures can be traded in both up and down markets. If a particular trader expects the market to go up, along trade is usually done wherein the trader buys a contract and then sells it. On the contrary, if a trader believes that the market will go down, and then he will most probably make a short trade by entering a trade through selling a contract and then exiting by buying another contract. With this system, traders can profit regardless of what direction the market trends are going. This is the main reason why most traders are only concerned if the market is moving at all, instead of which direction it is going.
At the moment, all of this will sound very straightforward, but if you are preparing to participate in futures trading, make sure you do your homework and prepare yourself for the successful execution of transactions with the requisite knowledge and skills. There are a lot of risks involved, along with the huge profits available, and trading futures without the right experience can be very detrimental.