What works for most traders is what tests well, according to their trade plan. No trade plan is the number one reason new traders fail. Don't even think about anything but a simulator for awhile, developing and testing (not hitting buttons arbitrarily). Read David Nassar's book, Rules of the Trade to develop a plan.
A standard definition
For speculators, futures have important advantages over other investments:
If the trader's judgment is good. he can make more money in the futures market faster because futures prices tend, on average, to change more quickly than real estate or stock prices, for example. On the other hand, bad trading judgment in futures markets can cause greater losses than might be the case with other investments.
Futures are highly leveraged investments. The trader puts up a small fraction of the value of the underlying contract (usually 10%-15% and sometimes less) as margin, yet he can ride on the full value of the contract as it moves up and down. The money he puts up is not a down payment on the underlying contract, but a performance bond. The actual value of the contract is only exchanged on those rare occasions when delivery takes place. (Compare this to the stock investor who generally has to put up at least 50% of the value of his stocks.) Moreover the commodity futures investor is not charged interest on the difference between the margin and the full contract value.
In general, futures are harder to trade on inside information. After all, who can have the inside scoop on the weather or the Chairman of the Federal Reserve's next proclamation on the money supply? The open outcry method of trading - as opposed to a specialist system - insures a very public, fair and efficient market.
Commission charges on futures trades are small compared to other investments, and the investor pays them after the position is liquidated.
Most commodity markets are very broad and liquid. Transactions can be completed quickly, lowering the risk of adverse market moves between the time of the decision to trade and the trade's execution.
http://futures.tradingcharts.com/tafm/ta...
http://www.investopedia.com/university/b...
Why Trade Futures?
http://eminimind.com/why-trade-futures/
Where do you live? Do you live near a futures exchange?
Commodities Futures trade on an exchange. So, if you live near an exchange, that explains why you would know traders.
Stock trading has been largely taken over by electronic exchanges. The NYSE still has an active trading floor, but even there most of the trading is electronic.
Not long ago there were many regional stock exchanges. They traded nationally traded companies, but the regional exchanges traded stock options and the like.
Bond trading is a different sort of beast. There is no central exchange, but many banks have bond trading floors, where the traders sell bonds over the telephone (or electronically)
Professional investors make little use of futures and commodities.
You've been hanging out with speculators.
Commodity futures trading involves buying and selling contracts for the future delivery of physical raw materials. more details- http://goo.gl/MFUMCV
Leverage. When you know what you are doing, and can win consistently, you are better off using a lot of leverage to maximize your profits.
All of you share awesome knowledge..
Thanks !
I've met a few professional traders, they all trade either Futures or Commodities.
I haven't heard of any professional trader that trades regular stocks / ETF's...how come?
