Beginners guide to futures trading – Futures trading 101
A futures contract refers to an agreement or contract between two parties in which both parties mutually agree to buy or sell any given asset at a given date and price in the future. This asset could be stocks, cryptocurrencies, gold, ETF’s, and other commodities.
So basically, an investor or buyer speculates on an asset’s price, then based on their speculation, they enter a contract with another person. This contract binds them to buy or sell a specific product at their decided date and price.
If the person’s speculation is correct, they’ll end up in profit. However, if the asset’s value doesn’t shift as they had expected, they’ll end up in loss. An example of a futures trade could be: A clothing factory wanted to buy cotton for their production, but they speculated that cotton prices would rise in the near future. So, to avoid paying higher prices, they can enter a futures contract with the cotton seller and agree on buying the cotton at a specified date and specified price.
This protects the buyer from a potential increase in cotton prices and saves the seller from a potential decline in cotton prices. Sometimes, investors don’t intend to purchase an underlying asset at all. Instead, they enter a futures contract to sell it to other investors. These investors want to capitalise on market movements by making profits based on price speculation and they have no interest in the commodities themselves whatsoever.
What are futures trading signals and how do they work?
Imagine you enter the futures market and want to invest in a contract, but you’re not sure where to start and how to start because you lack the knowledge and experience. This is where futures trading signals come to the rescue. Trading signals are trading suggestions or indications that are sent by market experts.
Futures trading requires a certain level of expertise as you have to speculate on different asset prices in order to pick and choose investment opportunities. If you don’t have speculation skills, you’ll probably end up losing your investments.
Any futures reliable trade signal provider will carefully study the market and carry out financial and technical analysis of several assets, then indicate which assets you should invest in, along with other details, including what price and date your contract should end.
Who are futures trading signals suitable for?
Are you confused whether following trading signals would help you invest in futures contracts more efficiently? Here are the type of people that quality futures signals would suit:
If you’ve just entered the market and lack the knowledge or skills to hunt down appropriate investment opportunities, trading signals are a great way to kickstart your investment journey. However, it’s essential to join a signals group that offers quality signals along with available customer support and expert guidance. With the right set of tools and support, you can achieve your investment goals much more efficiently.
Those who want to diversify their investments
If you want to invest in multiple assets at once, seeking help through trading signals will make the process a lot more efficient for you. Otherwise, keeping in touch with a number of investments at once or even identifying new opportunities can be a lot of hard work. All you have to do is follow the signals as they come, or you can even opt for automated signal trading.
Those who don’t have the time to carry out market research
Sometimes investors have the skills and knowledge needed to analyze the market and find investment opportunities. Unfortunately, though, this is a highly time-consuming process. The simplest way to deal with this is by signing up for signals – this way, the trader can rely on experts to offer signals and double-check the signal before applying it.
Pros of futures trading signals
The major pros of trading through futures signals are:
- You can skip the learning phase and jump straight to the earning phase. The best part is that as you apply signals, you learn more about how pro-traders invest. So, you basically learn as you earn.
- Receiving signals is also highly beneficial because you don’t need to monitor your trades constantly. Instead, you can simply follow signals – a quality trading signal will include important information such as stop order limits.
- If you want to invest in multiple assets at once, you can use signals to guide you throughout the investments. You save time and invest hassle-free.
- You can also automate signal trading on your account through an automated trading system. This would make your investments even more convenient. It’s especially beneficial in helping investors build a portfolio fast.
Cons of futures trading signals
- Futures can be risky instruments to trade since you become obliged to purchase an item at a given date. Even if a signal provider is highly accurate, you could end up in loss.
- There’s a possibility that you may become dependent on trading signals and not grow investing skills and expertise of your own.
Guide to choosing the best Futures trading signals provider
Free vs Paid
While some signal providers offer signals free of cost, others may charge you for the signals. It’s essential that whichever signal provider you choose, offers signals that are affordable for you. While free signals may seem like the better option, paid signals usually offer more regularity and are more in-depth. Ideally, you should look for a signal provider that offers free signals as well as paid signals. For instance, FXGrowth is a signal provider that offers free forex signals as well as paid signals.
The win rate
The purpose of investing and following signals is to make money, so you need to ensure that the signal provider you choose has a high win rate. Ideally, look for a signal provider with an accuracy rate of at least 70%. Don’t fall for online scams; also, ask for proof of their claimed success rate if not provided.
Performance and reputation
While online declarations and user reviews are amongst the most important things to look up while choosing a futures trading signal provider, make sure that you test the signals on a demo trading account as well. See how the signals work for you and whether or not they match your trading goals.
Risk to reward ratio
While some signal providers are conservative and don’t promote risky trades, others play with high risk: high reward mentality. You have to make sure whichever signal provider you choose has the same investment style as you. If you’re not a fan of high risk, avoid signals that are risky. Similarly, if you prefer a conservative trading style, that’s what you should look for in the best futures trading signals. For most people, the ideal risk to reward ratio is 1:4 – this means for every 1% of the capital that you risk, you should potentially earn 4% profit.
Telegram: the hub for trading signal groups
Are you confused as to where you can find and receive some of the top trading signals from? Telegram is known for being home to thousands of signal provider groups. The messaging platform offers several features that make it suitable for signal providers and receivers.
On top of that, Telegram users get to benefit from multiple iBot features. So, if you’re interested in futures trading signals, the best place to find them is on Telegram. You can google the top telegram groups for futures trading signals and review each of them, then join whichever one clicks with you.
Can you trade forex with signals as well?
Just as there are several futures signal service providers on Telegram, you can find the best forex trading signals as well. In fact, signals are more popular amongst forex traders as the FX market is known for being highly volatile. Keeping in mind the highly volatile nature of the forex market, it demands users to track ongoing news and trends constantly. Hence, utilizing quality signals while trading forex pairs is an excellent idea.
FXGrowth is a forex signal provider that offers free and paid signals with a win rate of over 70%. Their signals are auto generated with the help of an expert-designed algorithm. The algorithm is highly effective and actively monitors the market to receive and share quality forex signals. The signal providing platform also offers automated trading along with several other tools and features.
If you want to take your forex investments to the next level with minimal effort, you can simply sign up on their page and benefit from their quality signals. You can receive one free signal per day and up to 16 paid signals per day.
Futures trading is a great way to capitalize on your funds; however, it requires a certain level of experience or quality trading signals to trade futures profitable. Though it is essential to find signal providers that have a reasonable win rate, don’t charge too much, are well-reputed, and send signals regularly.
Most futures signal providers have groups in Telegram where they share the signals. You can look up the top telegram signal providers and test a few to find the one that matches your investment goals the best.
If you’re interested in forex trading, you can sign up with FXGrowth. They’re one of the best signal providers online and offer their signals through Telegram as well. You can also benefit from their additional services and tools, including an auto trading system.
Best Futures Trading Signals FAQs
😏 Can futures trading signals make you rich?
Trading futures can be rewarding, though it requires a certain level of knowledge and experience to speculate on asset prices accurately. The best part about trading futures, though, is that you can trade them on a wide range of assets. Whether you’re interested in commodities or you’d rather invest in stocks, you can speculate on either of these assets and profit from their price fluctuations. An effective way to skip the speculation part is to follow trading signals that come with a decent level of accuracy.
✅ Are trading signals ideal for beginners?
Trading signals can never be 100% accurate. However, there are several signal providers that have a win rate of over 70%. The accuracy rate of any signal provider shows whether they’re reliable or not. Other than that, you should check how many signals they share with traders and whether or not they have good online reviews. If a signal provider is reliable and offers regular signals, there’s a high chance that you can make a fortune from their signals. Don’t rely on these signals 100% though, make sure the signal provider has backtesting and always double-check the information provided along with the signals. Visit our website to learn more about trading signals and whether they’re suitable for beginners or not.
💣 Can you trade futures through an automated trading system?
An automated trading system allows you to automate your trades by adding a few preset rules and strategies. Once you input the pre-set rules, a custom algorithm will enter and exit trades on your behalf. The most common factors considered by trading systems include the value of an asset, the timing of the trade and the size of the trade. You can use automated trading on a wide range of assets. Visit our website to learn more about auto-trading and how it’s done.