Futures trading is the art and business of buying and selling contracts on commodities. These contracts are specific in detail i.e. 5000 bushels of corn would make up a corn contract traded on The Chicago Board of Trade. Each commodity contract also spells out the grade of the commodity and in the case of a grain contract whether it is new or old crop.

Futures trading win and lose is usually a matter of doing your homework. This homework can either be technical or fundamental in nature. Technical means such things as chart reading, moving average crossovers and oversold/overbought situations. Fundamental can be a crop report, supply inventory reports or the current weather predictions. In either case, the better the information, the better the chances of winning on a specific trade.

Futures trading; where to start? Start by reading a great deal about trading. Then find a broker who has several years’ experience and good references. Start small with your trading as the risk reward is unlike anything you have ever attempted before.

Futures trading the dangers: are many, varied, and often unpredictable. The basic reason for this is that futures contracts are traded in a leveraged manner. An example would be a wheat contract, which would require a margin of $750. A wheat contract is 5,000 bushels of wheat. A fifteen-cent change in price would equal the entire margin of $750. That is fine as long as the price move was in the direction you expected. If it was in the opposite, you have lost all your margin money. A move like this can happen in a single trading day.

Futures trading the benefits are the hedger can pass price risk to the speculator. The speculator can make money if the market moves in the direction the speculator expects. This, in a nutshell, is the benefit of futures trading. Of course, there are other reasons for futures trading, but they usually fall under either of the aforementioned categories.

Futures tracing online info can be obtained from many sources. The various exchanges have real time info and end of the day Open High Low Close. The exchanges offer this info on markets that they trade.

There are private real time quote providers, as will as end of the day price providers. These are used in conjunction with software programs that will produce technical information like charts and moving average lines on the charts.

The US Government publishes crop reports and weather information for crop areas within the country.

Futures trading for profit is the goal of every speculator. Hedgers trade for price protection. Trading futures is at best difficult and without a doubt takes experience to do it successfully. Today, there are many good books on trading and they should be studied. Also, a new trader has to quickly get rid of the buy and hold strategy that is prevalent in stock trading.

A futures trader must learn to trade both the long and short side of the market. It is impossible to be a successful trader by always being on the long side. There are always times to buy and times to sell.

Why futures trading you ask? Futures trading is an economic device to shift price risk to speculators from users of the commodity and grower/makers of the commodity.

An example of why futures trading would be, a cattle-feeding operation: This business has two great unknowns that can adversely affect the business. Cattle need to be fed and then they need to be marketed. A cattle feeder can buy futures contracts on corn and lock up the price they will pay for feed. They can sell cattle futures contracts and lock up the price they will sell their cattle for. Sharp operators can guarantee themselves a profit as long as they can deliver the cattle.