blog

stay inspired
uprofit blog

and what sets them apart? Both are well-recognized and widely used investment methods in the financial market that have so many significant differences. Basically, one involves partial ownership of one or more companies, while the other is an agreement to trade an underlying asset on a certain date for an agreed price.

When seeking to increase your income, investments in different financial markets appear as a viable option for a large number of people. However, everyone tends to have a preference for one or another investment method, as there are unique advantages and disadvantages to each of them.

If you are looking for your personal best option to trade in the markets, you should really study these and other forms of investment thoroughly, as one of them may speak to you more than the other. Each trader should analyze his or her own personality, including goals, experience and risk tolerance, before jumping into investing in a particular market.

 question is a good starting point to begin to identify the particularities of each financial instrument and how you can adapt more or less easily to the requirements of each of them.

Below, we will review some aspects of each of these:

Futures are financial contracts to buy or sell an asset at a specified date in the future for a fixed price. It is a financial asset that is part of the derivatives market, which means that the contract takes the value of a separate asset: shares, commodities, indexes or cryptocurrencies; and subsequently, through speculation, a price that it could be in the future is agreed upon.

Futures entered into the market to allow buyers to transact goods in the present while allowing them to cash in on these goods purchased at a later date. Buyers could lock in the current price for goods delivered at a future date.

This trading practice was also made to benefit sellers. Sometimes, sellers are not yet ready to dispose of their items. This is when futures become really useful, as it allows sellers to lock in a price for a future sale. In short, both sellers and futures buyers are able to limit their price risk.

Trading futures involves transacting these contracts in relation to the asset being traded. The buyer of the contract is obliged to take possession of the underlying on which it is agreed once it reaches its expiration date. However, while the contract is ongoing, the buyer can sell the position and free him or herself from the obligation.

is the possibility to trade with leverage. Leverage is a tool specific to the futures market that provides traders with the power to control a high value contract with a much smaller investment through the use of borrowed capital. This gives the trader additional purchasing power and allows them to control larger positions with minimal capital risk.

Stocks represent a percentage of ownership in a company or group of companies. By investing in a stock in the market, the buyer exchanges money for the ownership of a part of a company. In this way, the purchaser becomes a shareholder in the group that owns the company.

When a company or group requires more capital to expand or improve its economic situation, a certain portion of the company or group is often put up for sale. In this way, whoever buys that portion becomes the beneficiary of its profits or responsible for its losses, depending on the proportion of ownership, as the shares increase or decrease in price.

lies in the condition of being an owner or not, since by being a buyer of a futures contract one does not become an owner of the underlying asset. On the contrary, by buying a stock, the new owner becomes exposed to the performance of the company in question.

There are different types of stocks that can be purchased on the stock exchange. The type of stock purchased determines the degree of power, profit and participation that the buyer has over the company or group of companies, as well as the rights he or she has over his or her share.

The price of the stocks is initially calculated based on the total capital contributed by the initial partners divided by the number of shares to be issued. However, once they enter the stock exchange, the price of these will be subject to the law of supply and demand.

In this sense, speculation on stock market values follows the same logic as speculation on the futures market. However, following the 

comparison, the price at which stocks are bought or sold is totally determined by the market, while futures agree on a price for a given date, regardless of the value it takes in the market at that time.

, one of the biggest differences lies in the ownership of the asset being traded. This can be seen as an advantage or disadvantage, depending on what happens in the market.

On the one hand, it usually takes more money to buy stocks than to trade futures. At the same time, if the value of the stocks rises, whoever owns a part of them will tend to make bigger profits than other types of investors. On the other hand, if the value of the stocks goes down, he or she will see the bigger losses as well. In this sense, exposure to market volatility is greater.

When trading futures, you can speculate without being the owner of the asset and the obligation that comes with it. For example, you can speculate with gold or oil without actually owning these types of assets, which tends to be very expensive.

 gives traders the opportunity to trade with leverage. And what do we mean by leverage? Well, leverage is the ability to control a high value contract with a much smaller investment through the use of borrowed capital. This gives them additional purchasing power and allows them to control larger positions with minimal capital.

At the same time, high leverage means more risk, because just as it can result in more income, it can also lead to a bigger loss. While leverage is what makes futures trading so opportunistic, it is also extremely crucial that traders understand how it works, as well as the role of margins in 

In this sense, we can see that when facing the 

 we can definitely see some similarities. Both are variable income assets, so they do not assure profitability to those who invest in them, since they are subject to market volatility.

However, trading futures allows the commitment to be made for a specific time, and in a proportion according to the trader's available money, since there are different contract sizes. In contrast, stocks have a fixed value and imply the total possession of them, at least until they can be sold.

Nevertheless, both the futures market and the stock market have liquidity. This means that there are a large number of buyers and sellers willing to trade, which facilitates faster transactions and the possibility of obtaining good prices.

Do keep in mind, futures have the additional advantage of making it possible to trade almost around the clock: 7 days a week and almost 24 hours a day. As for the stock exchange, it usually has more restricted hours, according to each country.

, it is worth noting that the investment in stocks is long term, while in futures it can be both long and short term. This makes the futures market more flexible to the needs and strategy of each trader.

Either of these two investment methods requires prior study, perseverance and discipline to see favorable results in one's personal finances. In our opinion, the futures market offers some advantages that distinguish it from the rest of the investment methods available.

 so that every trader can test their capabilities in futures trading with fair and clear conditions. Thus, you can decide between 

 by testing one of these alternatives without risking your own capital.

Futures vs stocks and what sets them apart? Both are well-recognized and widely used investment methods in the financial market that have so many significant differences.

Understanding Futures vs Stocks

 continue to be the most valuable resources available for any trader to learn about an investment strategy. Thanks to these books, you can learn through the words of authors who have accumulated some great experience in their field. They openly share their techniques on how to use their strategy successfully, as well as some of the secrets and wisdom that can only be found through actual experience.

Nowadays we have numerous alternatives to learn about any discipline or subject. However, books still offer the advantage of receiving the words of experts without intermediaries and also the advantage of dealing with a topic in depth and detail. In contrast, other sources such as texts or videos on social networks don’t always foster a deep understanding of a topic in the same way.

When preparing for short-term investments in the futures market, it is important that you make a good selection of the 

. With that being the case, below we’d like to share with you our list of recommendations!

Mind Over Markets: Power Trading with Market Generated Information

This is a reprint of a classic for every trader, written by J. Dalton, E.T. Jones and R.B. Dalton. Since its first edition, it is considered one of the best approaches to trading from the analysis of the dynamics and structure of the different financial markets.

Given that the markets are constantly evolving and have changed a lot since the first edition of this book in 1999, this instant classic has been updated to continue to take its place as one of the 

It may be necessary to read Dalton's first book, Markets in Profile, to get the most out of this in-depth analysis, which provides a solid and relevant breakdown with a more holistic view on technical analysis of financial markets. However, the authors explain each notion in detail, so it is also possible to understand it without having read the earlier one.

This book provides traders with a unique and practically developed method for interpreting market behavior and identifying investment opportunities from that perspective.

 because it is written by a leading educator and authority on technical analysis and Market Profile. In this way, it offers information corroborated by experts on one of the most popular techniques for Day Trading.

This book will teach you how to learn about market dynamics through the organization of price, time and volume by being able to record information about price fluctuations. Most importantly, it is about learning to fuel one's intuition with this information.

In this way, you can access an intuition bounded by accurate, analytical knowledge, which allows you to make quick but informed decisions, from reason and not from emotion, ideal for any day trader.

This book by Schwager is part of a trilogy that includes interviews with some of the most successful investors in America. In this way, it is possible to give a face to the different strategies followed to trade, and to learn, in the words of different experts, some of the best tips to implement them with favorable results.

In this way, as readers, we can see how different personalities relate to the strategies followed for investing. This can be very useful to identify the types of personalities and investors that are most similar to us, and therefore can serve as role models, at least in some characteristics.

J. Schwager is a recognized expert in the futures and hedge fund industry and the author of several widely acclaimed financial books. Thanks to his knowledge, he is able to ask the right questions to his interviewees, to answer those questions that all traders want to know.

because of the high level of its interviewees, who, although they are not so famous in general, are an elite trading team that makes huge money movements in the market, some of them earning millions.

In addition, the different voices that make up this book not only serve as motivation to persist in trading thanks to their success stories, but they can also teach us from their mistakes. In this way, they give us information about their method of trading, but also about the right mentality to carry out this activity.

Technical Analysis of the Financial Markets

This bestseller by J. J. Murphy was updated to cover new advances in technology and includes new material on candlestick charting, intermarket relationships and several examples that help illustrate some of the concepts developed.

Although it was updated, it is still a book that is several years old, so it may be outdated in some dynamics and tools. However, Murphy's excellent explanatory skills make it worth reading.

John J. Murphy is a former technical analyst for CNBC and head of Merrill Lynch's Futures Technical Analysis Division. His experience as a trader allows him to explain the fundamentals of technical analysis from a unique perspective and review all the most prominent methods in one of the 

Technical analysis is a craft (or even an art, as Murphy says) that requires judgment, experience and common sense. After reading this book, you will be able to start charting, that is, to apply technical analysis immediately, until you develop the way that is most practical and useful for you.

This book, in our opinion, is one of the 

 because it will make you less naive about how the market works, something that can prevent mistakes and spare you losses, and will inspire you to be more technical when trading in any financial market.

All of this is accompanied by illustrative examples, with a pleasant and easy-to-read text, which will make you fall in love with trading once again.

Trading Psychology 2.0: From Best Practices to Best Processes

In this 2015 book, B. Steenbarger gives us a practical look at the psychology behind trading that can be applied to the operations of any trader today. It is not a book specifically for day trading, but it is highly recommended for anyone who is serious about improving their financial results and their life in general.

 because it was written by an acclaimed trading psychologist and bestselling author, who chose to approach it as a guide that allows anyone to apply psychology to the art of trading.

In this way, the book offers readers the possibility of applying the basics of positive psychology to trading and other aspects of life. In addition, it is supported by academic studies presented in an accessible and easy-to-read manner, with examples, illustrations and case studies that give context to the techniques explained.

Throughout the text, Steenbarger's own experience is complemented by the insights of other traders and experts in the field, many of whom are dedicated to writing books and blogs about trading.

At the same time, the psychological perspective is approached in a practical way, as it offers the viewpoint of experienced traders who apply the techniques developed in the book on a daily basis, while guiding the reader to put them into play at different stages, such as when analyzing the markets, for example.

A great lesson from this book is that, although market dynamics vary widely, humans always have the same tendencies in the way they act. By understanding these, it is possible to comprehend how human behavior guides the behavior of markets.

This was our list of recommendations of the 

. Remember that study and research is a fundamental part of every trader's career. And once you feel ready, you can put that knowledge to the test at 

, which offer transparent and fair conditions for all traders.

The best books for Day Trading continue to be the most valuable resources available for any trader to learn about an investment strategy.

Best Books for Day Trading

 you have at disposal is definitely something you want to have in mind before getting started. It is important to have an initial capital that allows you to participate in the market of your choice, while following the strategy you prefer, and at the same time it shouldn’t be part of the budget you need to sustain yourself for your day to day living.

Futures trading is an activity that can help to increase your income, which is one of the reasons why so many people are interested in getting started with this type of investment. However, it is also an activity that you want to make sure you fully understand and will have a 

, so it should not be made without prior deliberation and a lot of studying.

In order to start off on the right foot, one of the things you want to understand is how much should be taken into account to have the proper amount of 

. Knowing cost, alone, is going to allow you to make the right decision for yourself when it comes to choosing the right market for you to trade. For example, it will cost a lot less for a trader to get started with micro-futures contracts than it would to start with the standard futures contracts.

Each market, broker, strategy and trading objective requires different amounts of money, so you can find what fits best in your budget. Thanks to this, you can start trading with a smaller account and grow both in the capital obtained for yourself and in the capital that you have available for further investments.

Below, we will share with you some of the most important factors to consider when defining how much 

Among the financial markets you can choose to invest in, there are some that require more money to start trading. Particularly, this divide is very evident between regulated and unregulated markets.

Regulated financial markets are those that are subject to supervision and regulation by the financial authorities of the country in which they operate. These authorities establish rules and requirements that market participants must comply with, in order to protect investors and guarantee market stability.

The stock market and the futures market are two well-known examples of these types of markets. To trade stocks, the amount required to get started can be very high; generally around $25,000. But in futures, the requirements are much lower; as low as $500.

As can be seen, within the regulated markets, the amount of 

is much lower than that required by other financial markets. This is possible thanks to the leverage, which allows to have a high profitability with a low investment.

However, this characteristic of the futures market also increases the risk to which traders are exposed. For this reason, although starting 

 is not that much, it is important for traders to have a cushion that allows them to cover expenses in case a trade does not go as planned.

In this sense, leverage does give the possibility of higher profits with a smaller investment, but it also opens the possibility of larger losses, which you will really need to make sure you are prepared for.

Now, another type of existing financial markets is the unregulated one. In these types of markets, as in Forex, there is no supervision or regulation by financial authorities. This can make them more flexible and less costly for traders, but they can also be riskier and less transparent.

In relation to the latter, we can see that the quantity of 

 can really be lower or higher and sometimes the risk is more, while other times the risk is less. Everything will depend on the decisions you make when investing, for which you should be well informed beforehand.

As you probably know, futures trading is an activity that requires prior knowledge and understanding of the market you’re trading.. The vast majority of traders emphasize this point, since starting to invest without the proper knowledge can lead to frustration and giving up on the dream of trading.

When trying to decipher the necessary amount of 

that you should set aside, don’t forget to include the learning phase. Whether you learn through courses, books or self-taught, it will take time and money. Nowadays, it is very viable to make a self-taught path in this area, as long as you have spent the time to learn from your journey in order to make profitable trades.

Just keep in mind that, with a good education, you will be able to start trading with a previously defined strategy. This will guide you not only to choose the best market and the most suitable asset, but also to align your actions to certain objectives, which can put you on the path to success.

you will need. Roughly speaking, in long-term strategies you can invest little by little, but you will not see profits for a long period of time. For this reason, you may spend quite a bit of time in expenses that will accumulate before you see a profit.

In contrast, a strategy such as day trading can give you short-term profits with investments that do not have to be anywhere near as significant. It all depends on the size of the contracts and which markets you decide to trade.

If you are a beginner trader, you probably don't want to risk lots of money on a single trade in the futures market. E-Mini and Micro E-Mini contracts are good alternatives for trading, with an exponentially lower economic pressure.

Mini and Micro futures are handled in the same way as standard futures, with the difference that traders can gain access to the markets with a much smaller amount of 

Microfutures are futures contracts in a smaller version, which allow trading for a fraction of the capital required. Like any other contract within the futures market, microfutures agree to trade an asset on a specific date and at a specific price.

 is much less with this type of contract than with standard contracts, but there are still certain expenses that are part of any futures trading operation, such as the margins.

Margin in futures trading is a method used by brokers to hedge against losses they may incur from owning a particular asset. To open and maintain a position in the futures market, a trader must pay this margin.

The initial margin price for opening a position can vary widely depending on the market and the size of the contract you are trading. Generally, it represents 5% of the total value of the contract, but it can vary.

 should not only contemplate the initial margin, but also the maintenance margin. It is necessary to pay the maintenance margin to keep the position open, and its price may vary according to the market situation.

As you will see, within futures trading, many values depend on your particular decisions as a trader, so we cannot give you concrete numbers without knowing your profile beforehand. However, knowing about these factors can help you to study them thoroughly before deciding to make an investment.

It is important that you always have at least a slightly larger amount of 

 than is strictly necessary. This way, you can be prepared for any unforeseen event.

A key factor in calculating the budget you will need for trading is the short and long term goals you set for yourself.

Your Goals and Your Money to Trade Futures

When you start trading, it is important that you define goals that fit your strategy and that you can achieve. Many people expect to make large sums of money as soon as they start trading, and that, for the most part, is not the case.

For that reason, it is essential that you do not spend all your capital trying to make the market behave to your convenience. You should be guided by the knowledge you have acquired before you start, be consistent with the trading plan you have designed and understand that your goals will be adjusted to your level of available 

It is true that some traders make huge sums of money with just one move, but it is also true that those same traders probably have a huge amount of capital available for trades and extensive trading experience to know how and when to open or close a position in the market.

In their beginnings, those same traders surely did not make those same investments. Everyone must go at their own pace and with their own method, and it is very valuable to be able to do so without risking all your capital at once. For that reason, we recommend that you begin your journey as a trader with a funding test.

 for you to test your trading capabilities without risking your own capital. This way, your amount of 

 will not be a limiting factor for your potential as a trader.

The money to trade futures you have at disposal is definitely something you want to have in mind before getting started.

How Much Money Do I Need to Trade Futures?

 that every trader should know before they dive off into attempts at making profitable trades in the market.

In this article, we are going to review some of those rules to prepare you to test yourself without committing some beginner's mistakes that could really discourage you from the amazing 

 is a strategy within the commercialization of financial assets. It requires traders to buy and sell contracts constantly, with operations placed and completed on the same day.

It is definitely a method in which traders can’t remain passive, and that’s one of the reasons why we can see many struggle to sustain this strategy over long periods of time.

, your profits can sometimes depend on the number of trades you make, rather than the individual performance of each trade.

In other words, you will have a much better chance at profiting by being consistent with your activities and good 

In most cases, the returns from a single trade will not be significant. 

are bound by this dynamic, which you must accept and not try to redefine, and that is why it is so important that you know it thoroughly.

Choosing the Right Market in Which to Trade

, the market of choice must meet certain criteria. First of all, it must be a highly liquid and transparent market.

A liquid market is one that has a high degree of convertibility of the asset into money without affecting its value. As a result, some markets can absorb contracts at any time without affecting the selling price.

The transparency of a market refers to the possibility to know, at any time, at what price we have managed to agree on for our trades.

Markets that are not so transparent can change the price of the purchase order we have seen, without consulting us beforehand.

On the other hand, and this is a fundamental 

, the market we choose to invest in must allow us to open short-term positions on our own, on a personal computer and from anywhere in the world.

 in which the trader opens and closes trades on the same day. Some traders open and close a transaction in a matter of hours, minutes or even seconds.

 are useful for these traders because they allow them to make quick decisions according to the strategy, without being carried away by their impulses or emotions.

These rules include, not abandoning the activity when the expected results are not seen in a short period of time. In order to see results, it is essential to start a 

This will help you design a plan to implement the strategy and will allow you to summarize all events, including both your wins and your mistakes.

When you make many trades a day, you may forget the context in which you opened a trade or what led you to a profit or loss.

 does not only consist of entry and exit price information, it should also include stop loss, 

 and other factors that influenced your decision to enter or exit a trade.

 is to keep a record of all of these thoughts, feelings and transactions.

In this way, when you analyze your profits and losses each week, you will be able to understand your strengths and weaknesses to optimize your plan.

But for that to happen, you must first sustain the practice over time. Just a few trades can not give you a clear picture of what kind of trader you are.

To start this practice, we recommend you to do it with a 

. This way, you will be able to strengthen your knowledge and your 

 without the pressure of operating with real money.

You can take a look at the evaluation programs that we offer at 

, designed so that each trader can operate in their own way, with clear and convenient conditions.

 lies in the high speed at which prices move in the markets where this strategy is used.

If the platform used does not provide accurate data, together with indicators that help to make quick decisions, it can harm the traders' performance.

. It is one of the leaders in the market, with more than 500,000 traders who find support in its software to trade different types of financial assets.

This free platform allows traders to visualize and analyze the market, elaborate advanced charts, develop 

, use and create indicators and simulate trades.

Thanks to these, traders can find and take advantage of 

NinjaTrader is suitable for traders of all levels, whether they are just starting out or are experts in the area.

, it is the platform that we recommend the most to our traders because it has a powerful and easy to use 

, in addition to having first class support.

 is the application of technical analysis, since it is the best way to visualize what is happening in the market.

It allows traders to see trends in the form of charts, which can be a great help if they work in favor of them.

A good interpretation of technical analysis can tell us the right time to open and close a position in the market.

Charts do not show what is going to happen, but what has already happened, and they do not move by free will, but respond to price movements caused by variability in supply and demand.

 can take into account when looking for a buying or selling opportunity, but these can only confirm what has been previously seen thanks to the analysis performed.

Therefore, learning to perform technical analysis is a mandatory 

, since it leads to the development of an accurate vision and an objective opinion, which allows one to have a criteria on what these tools indicate.

Below, we share some of the most used indicators for 

Trend indicators: they help traders identify a direction in the predominant market trend, according to selected time periods. Examples of such indicators in futures are the Moving Average (MA) and Bollinger Bands (BB).

Volatility indicators: these are used to assess the volatility of the price of a financial instrument. Examples of this type of indicators are Bollinger Bands and ATR (Average True Range).

Momentum indicators: these are used to estimate the strength of a trend and its ability to continue. An example of these is the Relative Strength Index (RSI).

 draw horizontal support and resistance lines, based on historical price action, to know when there might be an obstacle in the near future for an identified trend.

, as each trader develops their own method.

Study and Develop Your Own Day Trading Rules

 are not actively operating in the market, usually many of them take some time to study the futures markets.

They monitor tendencies and dive into the big amount of information about 

, like investigations, analysts notes, news or share the knowledge with a fellow trader.

All the above-mentioned study methods are fundamental 

, because these are the only ways to be prepared to speculate over the futures market without quitting before time due to frustration, nerves, or lack of consistency.

: this kind of trader buys an asset that is on the rise, and sells the ones that are dropping. They are trading with the current trend.

: in this method, traders expect that prices on the rise will fall, and prices that are dropping will start going up, and trade based on that notion. So, they are trading against the trend.

: the traders that follow this tactic buy assets when they are at their lowest price and sell them when they are at their highest. It takes knowledge of the ranges of different markets. So they are trading between 2 specific areas.

: this technique consists of trading with an expected pop that happens when a major event or high impact news comes out. These traders look to take advantage of bigger movements when anticipated news is announced.

 that has been tested and works in various market conditions is a key 

And for this, you can test and adjust your strategy as many times as you need with a funding test.

One message we would like to leave you with is that if you decide to day trade, you should know from the start that losses are as much a part of 

 as are profits, so you must be patient and consistent in your tactics.

Consistent profits will start to come once you understand the market dynamics and learn to control your reactions.

The awesome benefits and the amazing opportunity to make a living out of what 

 should serve as motivation in the face of any loss.

 is to do it with the motivation to learn and grow a little more every day.

There are many day trading rules that every trader should know before they dive off into attempts at making profitable trades in the market.

Day Trading Rules

 is a tool that allows access to the futures markets in order to visualize movements and make investments in a time period no longer than one day.

All traders, regardless of the investment strategy they apply, can operate from these 

 that will provide them with data to make informed decisions.

 is a short-term investment strategy, mostly used in more liquid markets.

 is to make profits from these rapid market movements by opening positions that usually last from a few minutes to a couple of hours.

If it does not provide accurate data together with indicators that help to make quick decisions, the 

 account, you will be able to trade with the 

 of your choice, as we work with the most popular ones, just as long as they support RTrader data.

, it is important that you take into account certain characteristics which are necessary for you to be able to perform at your best in your operations.

, since it must be agile and stable to allow the execution of fast and accurate operations.

 that offers accessibility from different devices so that you have alternatives to access from your cell phone, computer or any other device you prefer.

 allows you to customize its tools to suit your preferences and needs as an operator.

Day Trading Software is a tool that allows access to the futures markets in order to visualize movements and make investments.

blog

stay inspireduprofit blog

stay inspired
uprofit blog