Thursday, August 03, 2006

Using A Futures Trading System

A Futures Trading System Can Make You Rich!

Some of the most popular futures trading systems today deal with specific futures markets such as foreign exchange (forex trading or fx). Most forex trading systems are a black box - they give you frequent signals you are expected to follow blindly.

An upfront warning -
any futures trading system can be very dangerous to your wealth. Standard warning - this is not trading advice - I am not a trading advisor - the risks are all yours. Past results will not be duplicated in the future - future results are always an unknown.

There are extremely successful and wealthy futures traders that use systems - but with systems they developed and understand. Your competition in futures markets will be:

  • well financed - trading millions of dollars
  • experienced - years or decades of trading
  • and
  • math and computer savvy - with full time main frames available to drill deep in statistics.

Someone that developed a system on their home computer and then optimized it for past data may never make money with it - unless they sell it to you. That is the black box they ask you to buy. They may believe in it - it may work for a while - but it will eventually lead to disaster for those that buy it.

The frequent trades recommended by a futures trading system lead to profits for a saber toothed broker, not for his clients, or for you.

Over a period of years, a low leverage, longer term and fewer trades futures trading system can make you rich. But be honest - is that what you really want?

Most investors enter futures markets for a quick financial kill, and the excitement of trading. They only get the excitement. Do you remember all those articles about ex-taxi driving, stock market day traders, that retired to their dream homes in 1999? Most are back washing taxis today.

The desire to trade frequently and big will doom most futures investors. Another danger is the need to over ride a system that actually works based on a "gut feeling."

Do you really want to know how to start and be successful with a futures trading system?

  • start very small - use mini contracts if necessary
  • start your trading in one less volatile agricultural commodity - say wheat or corn
  • use the seasonal charts to enter a planned purchase or two - in the annual bottoming area
  • use a trailing stop loss to exit the trade - automatically
  • In the second or third year add another agricultural commodity to your system

Will this be exciting?

No

Will it make you good money?

Very good money - perhaps wealth within ten to twenty years.

If you trade small and closely observe your entry points and stop losses, this simple futures trading system may make you rich - get your excitement somewhere else. Maybe play rugby or drive race cars - something safer than any futures trading system.

Everyone gets what they want from speculation - do you want to go broke in an exciting way - or -

do you want to build true wealth with your own futures trading system?


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