Seven tips for beginner futures traders in Malaysia
It can be intimidating to enter an industry that you have no prior experience as a newbie. This article will provide some advice and pointers to help you avoid any pitfalls and improve your success chances.
I see many newcomers make one mistake: putting all their eggs into one basket. For example, if they are trading only one currency or stock, it leaves them vulnerable if that market should suddenly tank. By investing across several markets, it means that even if one market does go down sharply, there are still others to pull up the slack and ensure you don’t take too much of a financial hit.
You may think you’ve made a good deal and want to jump in and try it out immediately. Dso if you’re feeling confident, as there is no limit as to the amount you can trade as long as it’s within your confines of available funds. However, when starting with futures trading, I would advise you to start with more minor contracts such as those for Euro/Dollar or Oil/Gold, etc. It’s because these markets fluctuate much less than other assets such as currencies or individual stocks, and trading more minor contracts mean that your potential profits (or losses) will be limited.
While following the news might not seem like a large part of futures trading, it does play a much more significant role than people realize. For example, if you’re trading the EUR/USD and there is news that European unemployment has risen, this will generally cause the Euro to drop against the Dollar (and vice versa). Therefore, by following the market and staying up-to-date with daily news, you can make an educated guess as to when is a good time to buy or sell and minimize your risk.
When we started, we all had someone who said they knew somebody somehow, shape or form that made millions from learning about these investment trends, etc. My advice would be not to listen to such people as if they were successful. They would have probably shared their secrets rather than keeping them under wraps with the world. It’s human nature to want to boast about our success, and therefore, it should be taken with a pinch of salt.
The biggest mistake made by beginners is panic selling or buying. The best way to avoid this is by firstly doing your research and knowing which markets are strong at the moment. Secondly, only invest what you can afford to lose as then there will be no reason for losing any sleep over it! Lastly, don’t follow gurus that claim to know which market will go up next, etc., instead place your money where there is consensus, i.e., following the significant trends.
It’s best to have some trading plan before you start investing so that you can stay on track and not get side-tracked by emotions or feelings of FOMO (fear of missing out). It will also include your tactics for buying, selling, maintaining stops, etc., and having an end goal in mind, i.e., how much money do I want to make? Also, please keep a record of your trades, including the time they were executed, as well as what was the outcome. If it turns out you are making consistent profits every month, then there is no reason why you should stop!
One of the most significant factors for making a profit is research. The more you know about a particular industry or commodity, i.e., whether there are any current talks about regulation, tax changes, etc., then the better chance you have at making money from your trades. By watching out for such things, you can make an informed decision on when to invest and when to take a loss, which in turn will lead to increased profits, look here for more info.