Futures Trading 
An Introduction To The World Of Future Trading
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Futures Trading  - Order Types

Now, I am only going to cover the simplest order types for futures trading here, and one or two basic strategies - like any other market I would urge you to start with the smallest type of contract which will be an e-mini specifically designed for new traders to learn how to trade in the futures market. I would suggest you start with some simple stock index futures which is where I started in trading futures. These are simple futures which are used to go long or short on an underlying index, such as the FTSE 100 in the UK or the S & P 500 in the US - they are generally around 1/5th the size of regular contracts. These are widely available through online brokers and will require lower margin deposits and less onerous requirements from your broker. The brokers  will also be used to helping answer some of the more basic questions you might need to ask! 

Futures Trading - Buy, Sell or Spread Orders

In futures trading there are really only three types of orders that you can enter as follows - the buy order, the sell order or the spread order. Now some order trades will be specified differently depending on whether the trades are electronic or through your broker so please check the order types on your system or with your broker before starting to trade.

Futures Trading - Order Entry Types

Now there are some other order types such as OCO ( one cancels the other ) and cancel replace, but the above orders are the most common.

Futures Trading - Placing Orders

When you first start trading futures, it can be quite scary placing the orders whether online or by phone. Some brokers still require orders to be placed using the phone, and this is the way I started trading index futures. I would suggest that before you place any orders that you right them down beforehand so that you do not make any mistakes.   I used to practice saying - "I'd like to buy 1 FTSE future at the market with a stop loss five points below, good for the day - please can you confirm the order " - in addition of course you will have to give your account details so there is a lot to think about so please write your orders out before you call. These are the points you will need to confirm when calling :

OK, that's about it on placing orders - let's take a closer look at one trading strategy which is very popular with futures traders, and that's the spread order which I hope will give you some ideas for your futures trading strategies. However I must stress that I suggest you start with very simple orders, just a buy or a sell to start, and perhaps with an index future as I did, or something similar - futures trading can be complicated so keep it as simple as possible when you start!

 

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