Defining Trading Goals with the Help of a Commodities or Futures Broker

in Trading

New day traders should have clear trading goals that can help guide his or her investment strategies and to measure their success. A seasoned commodities broker can assist them in creating a plan and setting goals so the trader can achieve them.

  • What are my goals in trading commodity futures?
  • How much do I really know about the behavior of the futures markets?
  • What am I looking for in a futures broker?
  • Do they have competitive commission rates?

A commodities broker should specialize in trading U.S. treasury bonds, stock indices,foreign currencies, precious metals, crude oil, agriculture, and other products on the futures andcommodity exchange, including futures options. A seasoned broker create and tailor strategies to fit every future trader's style of trading and risk tolerance. 

Whether you are new to the commodity futures markets or have been trading for a while, you are probably using the Internet to gather information, compare commission rates, and eventually to choose a commodity broker.

A general objective for futures trading, such as income generation, is nice to read but unhelpful. Simply earning an extra cent is enough to fulfill this goal, which can lead to extreme conservatism in investments. On the other hand, new traders may make risky plays in the quest for more income. And even if they did make money, they are unable to appreciate it because they "lost" potential income, if they mistimed their sell order.

Concrete goals can help the rookie futures trader avoid these pitfalls. However, it's very difficult to formulate these goals when he has very little basis for his expectations. He can't tell whether $10k in a few months is reasonable or even achievable.

A commodities broker has considerable knowledge and expertise about trading in futures. He can give the new futures investor advice about his trading goals and how to obtain them. The broker can correlate the investment capital with the desired income and the timeframe, while accounting for the fickleness of the market. Additionally, he can recommend a trading style, such as Scalp, Swing, or Trend trading, and an investment strategy to achieve this objective.

For example, the trader can adopt the goal of earning twice the initial investment within three years using a simple trend trading style, where the investor attempts to keep the commodities when they are on an upward trend and sell when it reverses.

Once the goals are set, the new investor can easily make trading decisions that will help him achieve his goals and not worry about the short-term upsets if the road to his goal is still visible.

There is a substantial risk of loss in trading commodity futures, options, and off-exchange foreign currency products.

Past performance is not indicative of future results.

Author Box
Ilan Levy-Mayer has 1 articles online

Ilan Levy-Mayer is Vice President and Senior Broker at Cannon Trading Company. He has been a licensed commodities broker since 1988 and holds an MBA in Finance and Marketing from Hebrew University in Jerusalem. His experience in the industry dates from the beginning of online trading, and includes trade system development, trading psychology, advanced options strategiues. have also developed several trading systems. He has written several articles about trading methods and trading psychology, and have been quoted and published several times in SFO magazine, Futures, and Bloomberg. Ilan was a guest speaker at theChicago Board of Trade, a significant distinction. To learn more futures trading techniques and further educate yourself,  please visit Cannon Trading Company website.

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Defining Trading Goals with the Help of a Commodities or Futures Broker

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This article was published on 2013/03/13