Wednesday, April 26, 2006

Online Future Trading

The first thing you will hear is that online future trading is risky.

Online future trading is risky.

But then it is risky to drive down the street or go to work.

Everything - including doing nothing - has a risk attached. Bury your money in the back yard and it is at risk both to gophers and the Federal Reserve inflation machine.

The key is not to avoid risk - you can't. What you can do is embrace risk and learn to manage it.

Your first online futures trading risk management decision is to get the book Hot Commodities by Jim Rogers that I reviewed in a prior post.

The second step is imperative - don't get greedy.

You have to limit your exposure in - the currency or forex markets, commodity future trading, future option trading, and in fact all future markets - or your speculation life span will be very short.

Be wary of any futures trading system - they are almost guaranteed not to work - except to bring revenue to the person selling the future trading system.

Here are some key points:

  • you can't win if you do not play
  • you can't play if you don't have chips
  • keep your bets small
  • keep your losses small
  • maximize your profits - let them run

You do not have to use maximum leverage - you do not have to keep all your money in play.

If you are considering online future trading start small after you have read the book.

I'll repeat that important speculation rule - one that particularly applies if you are considering online future trading:

Always read the book before you make a speculation.



Blogger Darragh said...

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8:59 PM  

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