best futures to trade for beginners

One way that you can learn as you go without putting any of your money at risk is to start out paper trading. Paper trading is done by mimicking trades by yourself until you feel that you are comfortable enough to begin actually trading. Futures are highly leveraged instruments, which makes them appealing and risky at the same time. Most traders recommend learning and using technical analysis for futures trading.

  • It’s important to understand that futures contracts are standardized agreements that typically trade on an established exchange.
  • Before placing your 1st futures trade, you need to open an account with a registered futures broker who will maintain your account and guarantee trades.
  • Currently, that allowance, called margin, is $3740 and is set by the COMEX exchange on which gold is traded.
  • However, its accuracy, completeness or reliability cannot be guaranteed.
  • Investing in cryptocurrency futures offers more opportunities and potential to grow a portfolio.

Position Trading – Denotes holding a position for a longer period of time that may involve hours, or even a few days or longer. Something about Bitcoin, or cryptocurrencies in general, is that it represents a new asset class so people are talking about it and working on making improvements every day. This industry is constantly evolving, which is what makes it so exciting.


Get your trading direction from fundamentals, and use technicals to fine-tune entry and exit targets. The following chart shows how the price usually behaves around important support and resistance levels. A broken support level becomes a resistance level, and a broken resistance level becomes a support level. This is especially true on higher timeframes, such as the daily, although it can also be observed on shorter-term timeframes, such as the 30-minutes or 1-hour ones. It can also be used as a referencing guide for experienced traders in the future.

How do you successfully trade futures?

  1. Establish a trade plan. The first tip simply can't be emphasized enough: Plan your trades carefully before you establish a position.
  2. Protect your positions.
  3. Narrow your focus, but not too much.
  4. Pace your trading.
  5. Think long—and short.
  6. Learn from margin calls.
  7. Be patient.

If you are a complete newbie and wish to trade futures, commission-free broker eToro is a great option. However, eToro doesn’t offer futures to US citizens, so if you’re an American, the likes of Interactive Brokers and TradeStation are worth considering. 75% of retail investor accounts lose money when trading CFDs with this provider. In other words, instead of cashing out your position in fear of a market reversal, you can keep your investments open through a hedging strategy. And, there is no better way of achieving this goal than through a futures contract. First and foremost, Interactive Brokers gives you access to a huge library of futures markets across 35 different global exchanges. In the US, This includes 8 different exchanges – such as the CBOE, CME, ICE Futures, New York Mercantile Exchange, and OneChicago.

What is “Intraday Futures Trading”? 🧐

When you’re ready, you can open a real account and fund it with real dollars. They have a slightly lower volume than the prior two, are more volatile and have higher day trading margins. Eurodollar futures have high volume but are not a day trading market.

  • A detailed explanation from a wide pool of practical trading guidelines and market insights from an established and recognized trading authority.
  • The broker can recommend different strategies and types of spreads, which an investor can adopt until he learns to create his own personal trading strategies.
  • You’ll need to prove profitability and how you manage risk over certain intervals established by the company.
  • An easy yet effective fundamental trading strategy is to follow micro-fundamental releases.
  • The service offers a desktop and mobile experience to trade stock futures among many other asset classes.

But that’s also a $1000 increase in the leveraged $3740 allowance; a 21% increase. This magnifying effect on the price change of an asset sets futures trading apart from most other types of trading. Trading commodity futures and options involves substantial risk of loss. The recommendations contained in this letter are of opinion only and do not guarantee any profits. In 1878, a central dealing facility was opened in Chicago, USA where farmers and dealers could deal in ‘spot’ grain, i.e., immediately deliver their wheat crop for a cash settlement.

Perks of the best futures trading platforms

Their commission rates are competitive, and highly active traders benefit from higher commission discounts when buying the NinjaTrader platform. It was expected that more retail brokers would merge after the whole brokerage industry got disrupted when all retail brokers announced commission free trading. So it was not a surprise that Morgan Stanley announced in October 2020 that they acquire E-Trade for $13 billion. The acquisition bumps the market capitalization of Morgan Standley to a whopping $124 billion. E-Trade remains a stand-alone brand, and the commissions at E-Trade are between Interactive Brokers and TD Ameritrade at $1.50 per futures contract. The account minimum for standard futures is $2,000, while the Micro E-Mini accounts can be opened with $250. The day trading margin starts at $50 for the Micro E-Mini and $500 for the standard futures.

  • Many futures contracts are settled in the underlying asset – such as oil or wheat.
  • These larger positions must adhere to CFTC position limits and reportable position rules.
  • Either way, the objective is to predict whether the price of the financial instrument will be higher or lower when the contracts expire – which is typically three months.
  • The tops of the lower highs are used to enter with a short position, while the lows of the higher lows are used to enter with a buy position.
  • You will need to focus on the best customer support options, reliability and the security you can expect for your funds.
  • A gold futures contract is a commitment between traders to deliver, or take delivery of, a quantity of gold on a specific date at a specific price.

IG has earned the top spot for many reasons, including its customer service, and educational material on offer. You can choose not to utilize your call or put option if the prices do not suit you. A stock index represents stocks representing the best futures to trade for beginners broader market or a specific sector. Futures trading is a good idea if you have a solid understanding of the market and are comfortable with the risks. Also, some brokers might charge inactivity fees if you don’t often trade, so beware of those.

Best futures brokers overview

Alternatively, traders can also set the target at an important Fibonacci level. Bear in mind, though, using the counter-trend strategy is a lot riskier than most other strategies.