| Futures trading involves a buyer and a seller. The | | | | more volatile than the stock market. In futures |
| seller is liable to provide the agreed commodity at a | | | | trading, a commodity can change trends rapidly; |
| fixed price to the buyer at the time specified on the | | | | therefore traders must always be alert. |
| futures contract. The profits or losses incurred are | | | | The fundamental method of forecasting future prices |
| determined by the contract's price changes that are | | | | is comparing the demand and supply of the |
| in relation to the price fixed at the beginning of the | | | | commodity. This information is available through |
| contract. | | | | market letters, government and other forecast |
| In futures trading, the strategies make a lot of | | | | sources. |
| difference. To decide on any particular strategy, | | | | Technical analysis, also known as charting, is |
| traders must understand the trends of the market. | | | | implemented to establish a pattern that can indicate |
| Futures trading analysis is an attempt to identify the | | | | shifts in the market in relation to any political event, |
| winners and losers. A key strategy to limit losses is | | | | natural disaster or any other factors. Charting |
| to identify and exit the loser as soon as possible. To | | | | provides information on a particular futures market |
| analyze the market, the traders must the put | | | | price movement. This makes it easy for traders to |
| objectives they want to achieve and the amount of | | | | understand and implement the changes in their |
| risk they want to take, in perspective. The volatility | | | | trading without delving very deep into the reasons |
| of the market is another point to consider. | | | | for the change. This saves a lot of time and enables |
| Futures trading analysis increases the chances of | | | | the trader to make quick decisions. Both these |
| success, and portrays the estimated profits or losses | | | | factors are very important for successful futures |
| in black and white so a trader can plan for accordingly | | | | trading. |
| and is not taken by surprise. Futures market is even | | | | |