Futures trading is a good idea if you start doing it for the right reasons and with the proper mindset.
Depending on what your goals are when you start trading, you may end a trading day with new learnings that will help you become better or you may end it frustrated and upset.
Chances are, if you've done a little research on futures trading, you've encountered a practice that gives freedom to those who do it. And if someone else can do it, why couldn't you?
However, there are many people who enter the futures market to trade out of a need for quick cash. Just remember, trading out of necessity such as this is usually not very successful.
If you have a need to make trading work, you've lost before you start. This may seem a little harsh to some, but it is better to know beforehand than to enter with false expectations and be discouraged at the first trade executed.
Failure is part of futures trading, especially in the early stages of a trader's career.
It is important that the transition in your livelihood is not so abrupt: you should build up experience before becoming dependent on trading.
In this way, you will be able to see losses as learning instances and not as a large-scale failure.
Therefore, if you are thinking of entering the world of futures trading, it is better that you are clear about some previous questions.
Once you know them, you will discover an activity that can be exciting and profitable, where anyone can be successful if they have perseverance and discipline.
Futures Trading is All About Psychology and Attitude
A large part of the reason for success among many traders is their ability to adopt the right attitude when trading, as well as to control their mind and emotions, or at least their reactions to them.
The most difficult key when trading futures is not to be dominated by desires and anxiety.
In relation to this, one of the most common mistakes when starting futures trading is to start trading right away, without studying or testing yourself first.
When such a start is made, there always comes a moment of waking up to reality.
Now, this can be a great learning experience, but it can also be a moment of confusion and frustration.
The latter tends to happen because of being overconfident and simply rushing to get results immediately.
Trading requires some time to study and learn, and that is why it is not advisable to start trading if there is an urgent need for money.
One piece of advice we can give you: focus on the desire to learn about futures trading and not on the desire to profit from it.
When operating in a market without prior knowledge of it, it is possible to get a lucky break.
But keep in mind that it is also very likely that the market will behave in ways that you do not fully understand and that will lead you to make the wrong trades.
In the same way, when you feel that you know a market completely, that you have mastered it, is when you can run the most risk.
Overconfidence can work against you because, in trading, you are constantly learning due to the fact that the market changes continuously.
Now we also understand that, futures trading is an activity that requires the ability to act quickly, while remaining calm.
Nevertheless, it also involves taking risks, while being very careful. So to manage the combination of these polar opposites, you need knowledge, practice and management of your mind and emotions.
Successful traders are not driven by the fear of losing, nor by the greed of always wanting to earn a little more.
This allows them to close their positions at the right time, without rushing or waiting longer than convenient. It is important to understand that risk is part of futures trading.
In fact, it is an activity where it is normal to fail. You must accept failure as part of your day-to-day business and keep it under control.
If you have found it to get out of control, it may be time to change something in the way you trade.
There are quite a few common mistakes that new traders make when getting started, all with particular consequences in the results obtained and all learning experiences to create better habits for their trading future.
How Does Your Mindset Affect Your Operations?
Among traders who are starting to operate in a futures market, one of the most common mistakes is to take monetary losses as personal failures, which end up affecting them emotionally.
Therefore, it is important that you do not get emotionally involved with the trades you make, even if it is difficult at first.
Yes, it is likely that you could have done things in a different way that worked out better for you, but, as we said, risk and losses are an inevitable part of futures trading.
Just as it is important that your trading decisions don't emotionally affect you for the worse, you shouldn't allow those decisions to lead to overconfidence either.
It is very common for inexperienced traders to find information to support their theories without having seen both sides of an argument.
Therefore, it is advisable to remain neutral, without taking sides on a decision, until you have analyzed the whole picture, with its positive and negative aspects.
The same is true for past experience. You should not let your past trading results dictate your approach to futures trading without a thorough analysis of the trading possibilities you are considering.
Learning from your mistakes and successes is important, but even more important is staying current and knowing that things are constantly changing, especially in markets with high levels of volatility.
In this sense, the best recommendation you can take would be to design a trading plan that fits your way of carrying out the activity and that will be nurtured by the learning you achieve day by day.
How to Get Started in Futures Trading?
There are many ways to get started in futures trading, especially today. A few years ago, the only way to do it was with a personal account, with your own capital.
Fortunately today, that scenario has changed for the better. Most experienced traders have had to go through "reality shocks", which have led them to become more cautious and make certain adjustments in their approach to trading.
For this reason, many that have experienced that have recommended going through a funded testing.
This is the evaluation period offered by some platforms to be able to have access to financing for futures trading.
During the funded testing process, traders do not operate in the real market, but start to take part in a simulation of futures trading, where exactly what happens in the real market is reproduced.
Using this method, as a trader, you can have access to the futures market with a small investment. This allows you to test your trading skills without risking a large amount of money.
This way, you will be able to make the necessary adjustments in your operations, according to the results you obtain with real market data.
Best part is, you are able to do this without the risk that you take from funding your own account, thus reducing the anxiety and fears that it may generate.
At Uprofit, we have evaluation programs specially designed to offer fair and flexible conditions to traders, so that they can start trading on their own terms, following some basic rules that are part of our plans.
This will give you the opportunity to enter the world of futures trading on the right foot.
Perhaps you will also become passionate about this amazing activity that can, not only, change the way you look at money but also the attitude you have towards life.
We want to share with you the talk we had with Yose de los Santos, who told us about his journey in the world of trading, and can surely serve as inspiration if you are thinking of making a start:
In summary, futures trading is a good idea, but it is essential to start trading with the right mindset and achievable goals, especially when you are taking your first steps.