Get Started Trading Futures

Ready to get started trading futures? Here are five steps we recommend you take first.

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1. Make Sure You Understand How Futures Contracts Work

Futures differ in important ways from stocks, ETFs and other instruments: trading in tick increments, margin levels, and so on. Be sure to understand how futures work.

 Visit Intro to Futures.

2. Select a Few Markets You Want to Trade

Before trading, pick a market or two in which you’re interested. Understand the fundamentals behind prices. Watch and learn the markets by using our educational content, news, research and commentary.

3. Construct a Trade Plan

Before you enter a trade, first develop a plan to guide your decision-making process. Your plan should be based on careful analysis of the markets you intend to trade. Some questions to answer:

  • What is your objective for the trade?
  • How much risk is in the trade?
  • How much risk are you willing to accept?
  • What types of orders will you use?
  • How will you monitor market developments and price movements?

 Get help building a trade plan.

4. Practice Trading on a Simulator

Become familiar with the markets you plan to trade before you trade. One way is with an electronic trading simulator that replicates real-world trading conditions. It’s a good way to get familiar with price quotations, market terminology and the market’s general behavior.

 Go to Practice Simulator.

5. Select a Broker and Establish a Futures Trading Account

In order to trade futures, you must open an account with a registered futures broker who will maintain your account and guarantee your trades. In the futures business, brokerage firms are known as either a futures commission merchant (FCM), or an introducing broker (IB).

Many securities brokers are also registered to deal in futures. You may want to see if your current broker can provide you with this service.  Working with a knowledgeable broker and quality firm can play an important role in your long-term success.

Contact several brokers until you find the right combination of cost and service for your needs.

Find a broker.

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