Futures Trading: How Fortunes Are Made

If there ever was one business that has made a lot of people a lot of money it is futures trading, also known as commodity futures. This is one business that has made millionaires and multi-millionaires in a very short time while starting up with relatively small capital investments.

Just what is a “futures trading”? Loosely defined, a future is an agreement to buy or sell a given quantity of a particular commodity at specified future date at a pre-arranged price. You “speculate” the direction prices will take and decide to buy or sell based on that. Prices are, to a degree, predictable.

The money-making potential in futures trading is astounding. Examples; John Henry started with $ 16,000 and amassed a wealth worth more than $ 1.5 billion. Richard Dennis borrowed $ 1600 and made $ 200 million in about ten years. Granted, these examples are atypical. But you can see the potential.

Unlike other forms of business and trading such as real estate, stocks, brick-and-mortar etc., where you have to wait years to see any substantial returns, futures market is immediate.

Better still, you can start from your kitchen table, you never physically handle or deliver the commodities, nor market or advertise, and you can buy or sell large or small quantities.

You also have choice of a wide range of commodities from gold, grains, crude oil, gasoline, currencies, and agricultural products and many more to choose from.

As with any business where you can make lots of money fast, you can also loose lots of money fast. This is one reason why this business is not for everyone. It is certainly not for those who tend to get emotional when things seem not go as intended.

Actually, the more you’re able to keep your emotions in check, the more money you can make as panic and hysteria are commodity traders’ best friend.

When starting out, you might make losses. This is expected and may be a good thing as early success can give you a false impression about your own abilities, and lead to disaster. Loss should be treated as part of business and learning process. The key is to limit your losses by learning to trade like a professional. How?

Professionals approach futures as a business, as opposed to the slot-machine, hit-or-miss approach most people make. And, as with any business you need to understand how the market works.

This means learning as much as you can about the business. And no, you don’t have to pay $ 2500 to attend some seminar to learn “insider secrets”. You would be better off if you could take a trip to Chicago or New York Board of Trade and observe professionals at it. You’ll learn more this way than in any seminar.

Back to limiting losses. One way of limiting loss (risk management) is placing a stop-loss order on a trade. You pre-determine the amount of risk you are going to take, and stick to it. Successful traders always have a stop-loss order before initiating a trade.

Trading without a stop loss order can have catastrophic effects, especially to the inexperienced trader as they can find themselves unable to pull the plug until it’s too late.

Another key is diversification. As they say “never put all your eggs in the same basket”. A rule of thumb is not to risk more than ten percent of your equity in any one trade, thus preventing losing all your money in one or two bad trades.

Amateurs also make the mistake of re-investing all their earnings, and then loosing it all down the road. Professionals pull their profits and start small again, making small capital increments to facilitate growth.

Good record keeping is also important in that it shows you what is working and what is not, as well as the patterns.

Contrary to what you may have heard you don’t need a lot of money to get started in commodity trading. A good brokerage firm can help you get started without spending a fortune.

Details of running a successful futures trading business are beyond the scope of this article. The best investment you can make is to spend time learning how the business works, starting with the basics.

David Kamau owns Mercantilecentral.com Learn how to trade like a pro and make consistent profits trading futures. Go to: How to Trade the Futures Market
 
Great Credit Repair Tips From Experienced People
 
A lot of us made the mistake long ago of leaping before looking. We decided that it was okay to start a line of credit, and many of us really didn't focus on whether or not we had the available means to repay the debt. Now there are countless people out there dealing with bad credit, all desperate to repair their lives. Here's some tips on how you can get started.
 
Limit applications for new credit. Every new application you submit will generate a "hard" inquiry on your credit report. These not only slightly lower your credit score, but also cause lenders to perceive you as a credit risk because you might be trying to open multiple accounts at once. Instead, make informal inquiries about rates and only submit formal applications once you have a short list.
 
Refrain from applying for too many credit cards. When you own too many cards, you may find it difficult to keep track of them. You also run the risk of overspending. Small charges on every card can add up to a big liability by the end of the month. You really only need a couple of credit cards, from major issuers, for most purchases.
 
Pay your bills on time. It is the cardinal rule of good credit, and credit repair. The majority of your score and your credit is based off of how you pay your obligations. If they are paid on time, every time, then you will have no where to go but up.
 
For the best credit score possible, you should apply for multiple cards and make sure you do not use more than 20% of the available balance on each card. Pay off all your cards before applying for a new one. By not going over 20%, you are not damaging your credit and not raising the interest rate.
 
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An important tip to consider when working to repair your credit is the fact that each of the three credit reporting agencies will most likely have a different score for you. This is important to know because each company has a different report and each has a different model that they use to calculate your score.
 
Avoid credit schemes that will get you in trouble. You should steer clear of internet programs that show you how to clear your credit. Do things like this can get you into big trouble with the law. Legal repercussions will cost you a lot of money, and you could go to jail.
 
Let the Better Business Bureau be your guide when searching for credit repair companies. Fortunately, many people have filed complaints against companies who charge fees for services that they cannot render. If a company's offers or promises seem too good to be true, beware of their services. Call the BBB before you committ to something that is not worthwhile.
 
If you need to repair your credit, the first thing you must do is obtain a copy of your credit report from the big three reporting agencies: Transunion, Experian, and Equifax. Because you have to know what is being reported, make sure it is accurate, and then, devise a plan to improve your credit.
 
To ensure that your credit history is accurate and up to date obtain regular credit reports and carefully inspect each one. An error on your credit report can drastically affect your ability to obtain loans. There is no reason for you to suffer for a mistake that you did not make.
 
If you need a credit agency to help you resolve your credit problems, research the agency before you sign on with it. Scams in credit repair are widespread, and many unsuspecting people have become victims of these scams. To prevent this from happening to you, get as much information as you can about the reputation of the agency.
 
When on the road to credit repair, pay all of your bills on time. Credit scores base a lot of weight on paying back your debts on time. Make sure you get the payment to your creditor before the due date. When you start paying on time you will start to see your score rise.
 
Bad credit can happen to anyone in this day and age, so don't think that you're in uncharted territory. The important thing to remember is that you can get your head above water if you apply yourself. Use the tips provided here to assist you and that bad credit rating will be a thing of the past.
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