If you are just getting involved in the world of futures trading, then you need to understand that systems trading will be a big part in your success. The risks are obviously massive because of the leverage, much more than trading stock or ETF’s. So you need to have the mental strength to deal with the risks and volatility involved with futures trading systems. Even futures trading system will have drawdowns of 20-30% at times and you must be mentally prepared for this. If not then you are in for a world of shock!
However, the good thing is that in the last few years algorithmic trading systems have helped to manage market risk much more effectively. This is a big help to most starters in the futures trading system world. If you cannot manage your money and risk properly and quickly you will eventually lose all your money trading no matter the investment you trades (stocks, ETF’s, or Futures).
Systems, like in anything, are the key to your success. With the right futures trading system in place it’s almost like having an assistant there for you who does all the running and buying for you, you just give them the parameters to follow.
But with so many systems available, how do you know if the futures trading strategy you select is actually going to be effective? To understand just how successful a system could be for you, you need to look at the following;
Futures Trading System Predict & Follow Trend Changes?
Another key component of any successful trading system is its ability to predict trends. Analysing the trends and the market flow accurately is very important and having a system which can accurately read the trends is vital to making profits with your futures trading system.
Is it Effective at Automated Trading of Futures Contracts?
One of the main abilities that you need from a futures trading system is how effectively it buys and sells for you. The system will handle all trading executions, removing you from the equation which I talked about in a previous post called “Removing You From The Equation – Simple Automatic Trading”.
Your system has to be sophisticated enough to make sure each position is managed properly in terms of scaling in and out of positions.
How Much Will It Cost? – Do you Create, Buy or Subscribe To a System?
Like any other product, service or system that you use, you need to consider the affordability of the system as a whole. It must be able to trade the amount of capital you have available, generate enough return on your investment that it covers all costs from commissions, system fees, data feeds, platform feeds and still generates a profit worthwhile. These are all the things that you need to ask yourself and figure out.
Finding the best futures trading system for you is finding one that can give you the answers to your these questions.