Future trading is one of a kind business. People who have managed to master the art of future trading are doing perfectly well since they know the perfect way to manage the risk profile. No matter which business you chose in your life, it is important that you learn to take steps with managed risk. People who are good at analyzing the essentials of the market often become too proud of their work. They lose grip on their emotions and make silly mistakes. In this article, we are going to cover some of the important aspects of future trading. You might be skilled investors, still, you should be following the tips which we will discuss in this content. Let's get into the details.
When you talk about the futures, the first thing that should pop in our mind is the probability factor. Without learning to analyze the essential elements of the trading business, it is going to be a tough call for us to find the potential setups that higher probability to win the trades. Things might sound interesting to many investors but the investment is nothing but guessing. But the guess needs to educative. Unless you learn to take an educative guess, it is going to be a very big challenge to overcome the issues at trading. But when you realize investment is a very simple task, you should be able to develop your skills and create a professional edge at trading.
Know about the potential risk
Before you get fully invested in futures trading, you should know about the potential risk. There is a decent chance you can lose 100% of the account balance. However, when you take proper education, this chance significantly reduces. Taking the correct steps at the correct time can secure a decent path to earning money from most of the trades. Since losing trades are inevitable, you should be aware of the risk management factors at trading. Failing to manage the risk factor can lead to big losses and you might not be able to withstand such big losses. So, study money management techniques so that you can take the trades with low risk.
Focus on long term goals
Professional investors always trade-in a daily or weekly time frame. To them, the hourly and minute time frame is just a waste of time. We all know an hourly time frame can help us significantly to take the trades in the currency market. But when get involved with the future market, we should be aware of the potential risk factors in the trading business. Unless we do the things in the correct order, it will be a big challenge for us to overcome the losses. Set up your goal in an organized way so that you don't have to lose money on short term trading strategy. It might take a while but as you study the market strategy, you should become more confident with the different approaches in the investment business.
Study the price action signals
No matter which method you chose, it is important to have a strong knowledge of the price action trading strategy. The price action trading strategy allows retail investors to take the best trades without imposing a great level of risk. This might sound silly but it is by far the most effective way to improve your skills. The elite traders always consider trading as a shortcut way to become rich. But if you do the math, it won't take much time to realize trading is nothing but balancing the equation. Looking for shortcut solutions results in big losses. But don't get frustrated with the losing orders. Accept the losses and try to find out the key reason for which you are losing the money. If you do things in the right manner, you should be able to develop a perfect strategy.
3 Min Read
"How did you ever get into a business like that?" people ask me. They're confounded to hear that my product is industrial baler wire—a very unfeminine pursuit, especially in 1975 when I founded my company in the midst of a machismo man's world. It's a long story, but I'll try to shorten it.
I'd never been interested to enter the "man's" world of business, but when I discovered a lucrative opportunity to become my own boss, I couldn't pass it up—even if it involved a non-glamorous product. I'd been fired from my previous job working to become a ladies' clothing buyer and was told at my dismissal, "You just aren't management or corporate material." My primary goal then was to find a career in which nobody had the power to fire me and that provided a comfortable living for my two little girls and myself.
Over the years, I've learned quite a few tough lessons about how to successfully run a business. Below are five essential elements to keep in mind, as well as my story on how I learned them.
Find A Need And Fill It
I gradually became successful at selling various products, which unfortunately weren't profitable enough to get me off the ground, so I asked people what they needed that they couldn't seem to get. One man said, "Honey, I need baler wire. Even the farmers can't get it." I saw happy dollar signs as he talked on and dedicated myself to figuring out the baler wire industry.
I'd never been interested to enter the "man's" world of business, but when I discovered a lucrative opportunity to become my own boss, I couldn't pass it up.
Now forty-five years later, I'm proud to be the founder of Vulcan Wire, Inc., an industrial baler wire company with $10 million of annual sales.
Have Working Capital And Credit
There were many pitfalls along the way to my eventual success. My daughters and I were subsisting from my unemployment checks, erratic alimony and child-support payments, and food stamps. I had no money stashed up to start up a business.
I paid for the first wire with a check for which I had no funds, an illegal act, but I thought it wouldn't matter as long as I made a deposit to cover the deficit before the bank received the check. My expectation was that I'd receive payment immediately upon delivery, for which I used a rented truck.
Little did I know that this Fortune 500 company's modus operandi was to pay all bills thirty or more days after receipts. My customer initially refused to pay on the spot. I told him I would consequently have to return the wire, so he reluctantly decided to call corporate headquarters for this unusual request.
My stomach was in knots the whole time he was gone, because he said it was iffy that corporate would come through. Fifty minutes later, however, he emerged with a check in hand, resentful of the time away from his busy schedule. Stressed, he told me to never again expect another C.O.D. and that any future sale must be on credit. Luckily, I made it to the bank with a few minutes to spare.
Know Your Product Thoroughly
I received a disheartening phone call shortly thereafter: my wire was breaking. This horrible news fueled the fire of my fears. Would I have to reimburse my customer? Would my vendor refuse to reimburse me?
My customer told me to come over and take samples of his good wire to see if I might duplicate it. I did that and educated myself on the necessary qualities.
My primary goal then was to find a career in which nobody had the power to fire me and that provided a comfortable living for my two little girls and myself.
Voila! I found another wire supplier that had the right specifications. By then, I was savvy enough to act as though they would naturally give me thirty-day terms. They did!
More good news: My customer merely threw away all the bad wire I'd sold him, and the new wire worked perfectly; he then gave me leads and a good endorsement. I rapidly gained more wire customers.
Anticipate The Dangers Of Exponential Growth
I had made a depressing discovery. My working capital was inadequate. After I purchased the wire, I had to wait ten to thirty days for a fabricator to get it reconfigured, which became a looming problem. It meant that to maintain a good credit standing, I had to pay for the wire ten to thirty days before my customers paid me.
I was successful on paper but was incredibly cash deprived. In other words, my exponentially growing business was about to implode due to too many sales. Eventually, my increasing sales grew at a slower rate, solving my cash flow problem.
Delegate From The Bottom Up
I learned how to delegate and eventually delegated myself out of the top jobs of CEO, President, CFO, and Vice President of Finance. Now, at seventy-eight years old, I've sold all but a third of Vulcan's stock and am semi-retired with my only job currently serving as Vice President of Stock and Consultant.
In the interim, I survived many obstacles and learned many other lessons, but hopefully these five will get you started and help prevent some of you from having the same struggles that I did. And in the end, I figured it all out, just like you will.