Money For Grabs

Futures trading could be the best high yield investment your ever going to find, but trading futures with little experience by yourself or without a proven strategy is like an ill prepared soldier heading into battle with a rifle thinking to himself that its the saving grace that’s going to get him through even though he hasn’t thought about what’s going to happen next. The analogy sounds ridiculous with an obvious answer that “no one would be that dumb” but the fact is this is what most new traders do and inevitably they bring about a quick end to their new trading career. Futures have long been regarded as one of the riskiest investments in existence, and understandably so with close to 95% of new traders losing almost all of their original principal within a 6 month time frame. So let me ask you this: If people only lost money trading futures then why does anyone invest in them at all? Simple because the other 5% that know how the game is played are making a killing! So does this mean that the 5% are reaping the benefits from the losses of the other 95%? In partial yes, but whether or not money is made has little to do with new speculators. The just add more liquidity to the market by providing extra buyers and sellers that would otherwise not be there. This is similar to a liquid housing market loaded with plenty of buyers and sellers allowing for homes to be bought and sold without dramatic price changes. Hedgers and fundamentals consist of most of the movement in the market not new traders.

Futures trading is one of the ways to make money and grow your wealth overtime. Many people only invest in stocks. However, trading futures contracts like copper, wheat, corn, coffee, soybeans, pork bellies, cattle, crude oil, gold, ethanol, heating, gasoline, silver, interest rates, currencies and others can be highly lucrative.

Stocks are temporary loans, for all intents and purposes. You acquire a certain amount, based upon your wherewithal, and then you take possession of a certain amount of certificates entitling you to the value of your investment. When the market value of these stocks increases, you can sell your stocks for the market value, entitling you to the difference. Hence, when yours stocks “go up” you make a profit. But, when your stocks lose value, you quite clearly lose value as well.

Stocks are temporary loans, for all intents and purposes. You acquire a certain amount, based upon your wherewithal, and then you take possession of a certain amount of certificates entitling you to the value of your investment. When the market value of these stocks increases, you can sell your stocks for the market value, entitling you to the difference. Hence, when yours stocks “go up” you make a profit. But, when your stocks lose value, you quite clearly lose value as well.

It is very difficult to develop a trading system that can adjust to different market conditions. In simple terms, it is very difficult to adjust a mechanical trading system to a different market conditions if you are not the author of that system.