In the contemporary financial environment, becoming a futures trader is relatively simple. All a trader needs is a computer, internet connection, and some risk capital. Of course, engaging the futures markets successfully is another matter altogether.
Studies have shown that upwards of 75 percent of individuals new to the marketplace eventually quit within two years. The most commonly cited reasons for the high failure rate are undercapitalization, emotional behavior, and the inherent complexity of the markets.
With such high washout rates, is becoming a successful trader even possible? The answer is yes. Through comprehensive preparation and the mastery of a few trading skills, an aspiring trader may indeed achieve longevity in the marketplace.
The futures markets are rapidly evolving, hypercompetitive arenas. For a futures trader, being able to observe what is happening and act in a timely fashion is an absolute necessity.
Strong analytical skills are an indispensable part of futures trading. Fluency in the following areas is extremely valuable:
It’s important to remember that a trader doesn’t need to be a card carrying member of MENSA to trade futures. A vast majority of the necessary skillset may be acquired through hard work and experience.
A multitude of factors comprise the makeup of an individual’s psychology. Personal values, self-esteem, and sentiment toward money can all influence performance. Being in complete control of one’s emotions while trading is an integral part of successfully interacting with the marketplace.
Many of the pitfalls in futures trading are correlated to personal psychology. Learning how to actively manage your psychology can increase the odds of profitability substantially:
Nothing will blow out a trading account faster than emotional trading. Developing the proper mindset and learning how to manage one’s own psychology can be a life-saver in the face of challenging markets.
The modern futures marketplace is predominantly digital. Participants from around the globe enter the markets on a daily basis remotely, via internet connectivity. Without a working knowledge of how computers and software function, it can be difficult to trade.
Two areas in which it pays off to be technologically savvy are:
A background in programming or information systems management is useful, but not necessary to be a futures trader. Advanced technical support resources are available around the clock online, typically furnished by the brokerage. However, basic computer literacy gives a trader the ability to diagnose problems quickly and minimize any client side trade-related latencies that may arise.
Obtaining adequate analytical skills, emotional control, and computer literacy can be an arduous process rooted in experiential education. In order to speed things up, check out StoneX’s broker-assisted futures trading options. A market professional is ready to give tips and advice on how to get up-to-speed in the least amount of time possible.