Futures Trading Checklist
Analysis Strategies Trading Tips

Futures Trading Checklist

When given the choice between trading objectively and trading through the gut, the odds are that an objective strategy might suit you better. When given the choice between trading fairly and trading entirely “from the gut,” chances are that an unbiased method may fit you better. An easy but powerful approach to make unbiased decisions while trading is keeping a pre-trade checklist in hand. It is not rocket science, but the ease of the strategy usually conceals the much bigger benefits that such trading is able to provide.

In many high-performance tasks, the best participants use a checklist. A checklist not merely holds you accountable, additionally; it causes you to be more conscious about your overall approach. Additionally, it takes away the guesswork and gives you a framework that will aid you to identify a much better and more specialized trading pattern. Having said this, follow the checklist below to succeed in the futures market:

1. Deal with an only trustworthy and reputable company and persons

Research any individual or firm that you do not know previously to check how experienced they are or their reputation. Many persons and firms offering options on U. S. futures contracts are required by law in order to be authorized with the Commodity Futures Trading Commission (CFTC) and also be Members of the National Futures Association (NFA).

All companies and persons offering alternatives on U. S. Futures contracts are required by law to be registered with the Commodity Forex Trading Commission (CFTC) and to be Members of the National Futures Association (NFA). You can do this quickly, easily, and at no cost by accessing NFA’s Background Affiliation Status Information Center (BASIC), Situated at NFA’s website.

BASIC will Supply you with the firm as well as an individual’s registration status and any disciplinary actions taken by NFA, the CFTC, or maybe any U.S. exchanges. The Exact Same information is also available by phoning NFA toll-free at 800-621-3570.

2. Check out the company trading fee and how they are calculated

Know what a company’s commission fees will be and the way they are calculated. If the fees seem high–on a dollar basis or as a percent of this option premium, you may want to seek out comparison quotes from One or two additional companies. If a firm seeks to justify an unusually large commission charge on the grounds of its performance or services document, you may want to Request a thorough explanation or comprehensive written documentation.

3. Estimate the break-even price

Calculate exactly the break-even price for just about any option you’re considering to purchase or write. You must understand the particular futures price above or perhaps below that the alternative, at expiration, comes with potentials for profits

4. Ensure you read and understand the risk disclosure

Read and completely understand the necessary Risk Disclosure Statement prior to making any commitment to buy and create an option.

5. Research about the product you want to buy

Learn enough about the product you will be purchasing to enjoy a reasonable expectation that the required cost change is going to occur just before the expiration of the futures. Be certain you understand the risks inherent in getting a futures contract through the exercise of an option.

6. Be sure you understand the risk for unlimited loses

Do not purchase an alternative unless you realize that you can lose your whole investment. Do not create an alternative unless you comprehend that option writing involves potentially unlimited losses. And do not make some investment commitment unless the cash you can possibly lose may legitimately be viewed as risk capital.

7. Avoid buying on the basis of high-pressure sales tactics

Do not make some purchases on the basis of high-pressure sales tactics. Reputable firms do not run in that way. It is much safer to overlook an investment opportunity than to be rushed right into a choice you might later regret. And do not make an expense which is offered to you in that manner. They do not occur!

8. Consult with experts for guidance

Always seek the advice of other individuals like a knowledgeable economic advisor, accountant, or attorney before doing any significant investment decision.

Full Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

CFTC rule 4.41: Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.