Profitable Future Trade By www.ProfitableTradingTips.com
Sep 14, 2014
How does one go about setting up a profitable future trade?
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What factors go into the timing of a profitable future trade?
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Both fundamental and technical analysis are important when trading futures on stocks,
commodities, or currencies.
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Traders learn the fundamentals that ultimately drive equity prices.
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This gives them a clear idea of the range within which it ought to
trade.
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It also gives the trader a good idea of just how long a trend will last
and, oftentimes, how abrupt a correction might be.
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A profitable future trade requires an intelligent set up, careful
attention to market pricing patterns, skillful execution, and close follow up in order to gain
maximum profits from the trade.
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Analysis of Fundamentals
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The eventual price of a stock is determined by the return it gives
investors and the degree of security it offers.
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However, along the way to a given price the market speculates on
fundamentals such as cash flow, rate of growth, and issues such as
takeover bids.
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Commodities such as corn, wheat, and soybeans are priced according
to supply and demand.
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When there is a drought in the American Great Plains or torrential
rains in Brazil, there is the likelihood of a reduced harvest and
higher prices.
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Serious commodity futures traders keep track of where the rain is or
isn’t, market demand, and government support payments, all
of which drive prices of agricultural commodities.
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Commodities such as gold are hedges against inflation.
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As the American dollar falls in value the price of gold rises.
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Gold bugs hoard gold.
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Gold futures traders watch market fundamentals in search of a
profitable future trade.
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FollowingTechnical
Signalshttp://
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There are a number of profitable day trading strategies
that can result in a profitable futures trade.
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Based on the skill set that the trader has and his or her
experience he or she can follow technical trading signals like
Japanese candlesticks in order to assess market sentiment and
forecast market reversals.
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These signals work for trading futures on stocks, currencies, and
commodities.
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Technical signals can result in a profitable future trade because
market price patterns repeat themselves.
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This was discovered by rice traders in ancient Japan.
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When price patterns seem confusing the Candlestick trader or other technical trader often sees a
pattern amid the market static.
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Signals such as the Doji, Shooting Star, and Hammer signal can
predict market turnarounds when fundamentals are confusing.
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These and similar signals can often lead to a very profitable future
trade simply based upon an assessment of market sentiment.
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Picking Which Futures to Trade
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Futures traders fall into two categories.
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Companies that mine gold, buy things from foreign companies, or
seek to hedge risk in their business typically limit their options trading
to the field in which they do business.
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However, speculators can choose which stock, currency, or
commodity is most volatile and seek a profitable future trade.
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It is still important to know the fundamentals and to do technical
analysis but the opportunity for profit goes up with increased
volatility.
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