Futures are agreements to Buy/Sell Later. Futures are contracts where you agree to buy or sell things like oil or gold at a fixed price on a future date. For an instance, a farmer agrees to sell 100 kg of wheat for $500 in 6 months, no matter what happens to wheat prices at the said time.
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Why Futures Exist - Farmers, companies, and traders use them to avoid all sort of risks like bad weather or price changes.
- Speculators also use them to profit from any kind of price swings.
How Futures Work (Step-by-Step)
1. Agree on a Price: In futures, price is locked today for a future trade.
2. Set a Date: a decision is made when the trade will happen. It could be 3 months later or even more.
3. Profit or Lose: It's a two edged sword because when prices rise, buyers profit and if prices fall, sellers profit. In real-life, imagine reserving gold today for $500, even if it might cost $700 at launch. That means, you’re using a "future contract".
Types of Futures
1). Commodities: Examples of commodities are Oil, gold, wheat, etc.
2). Indices: Examples are S&P 500, NASDAQ, etc.
3). Currencies: examples of currency pairs are USD/EUR, GBP/JPY, etc.
4). Cryptos: These are Bitcoin, Ethereum, etc.
How to Trade Futures in 2025 (For Beginners)
Step 1: Learn how to trade futures. Like knowing what contract size is and all other things:
Contract Size means, how much you’re trading. For instance, you can make a contract of 1 oil = 1,000 barrels).
- Margin is a deposit to open a trade. It’s like a security fee.
- Expiry Date: This is when the contract ends.
Step 2: Pick a Trading Platform
You can use apps like TD Ameritrade, Interactive Brokers, or Binance Futures(for crypto).
Step 3: Start Small
- Start small by trading mini-contracts to limit risk. For instance, micro Bitcoin Futures let you trade 1/10th of a Bitcoin.
Step 4: Practice First
-Use a demo account or fake money to test strategies before investing big.
3 Big Mistakes to Avoid
1. Ignoring Leverage Risks: Futures let you control big amounts with little money but losses can exceed your deposit of care is not taken.
2. Forgetting Expiry Dates: Contracts expire. So you are expected to close or roll them over before they do.
3. Trading Without a Plan: Don’t ever guess when trading. You can use tools like stop-loss orders to minimise losses.
2025 Futures Trends to Watch
1. AI-Powered Trading: Use apps like Trade Ideas. It lets you use AI to predict price movement
2. Green Energy Futures: A typical example is lithium for electric cars and carbon credits. They are really booming.
3. Crypto Futures: The Bitcoin and Ethereum contracts are now the mainstream. You don't want to miss out.
Why Trade Futures in 2025?
- Hedge Risks: It's a protection against price changes.
- 24/7 Markets: You can trade crypto or global indices at anytime, which is an added advantage.
- Profit in Any Market: Prices go up and down and the good thing is, futures let you bet on both.
4 Tips for New Traders
1. Learn Free: There are available resources that lets you learn for free. Use this forum or watch YouTube channels like *lRayner Teo or The Trading Channel to gain the neccessary knowledge.
2. Follow the News: It's very crucial to follow the prices because they react to weather, politics, and tech breakthroughs.
3. Start with Commodities: Gold and oil are easier to understand than currencies. So, it's advisable to start with them
4. Use Stop-Loss: The lets you exit trades automatically to avoid losses and to also protect your money.
I love futures a lot because they help to manage risk and reduce speculations. To trade futures, you need to learn how it works and also understand the different types.
It's when you purchase or sell something at an agreed price in the future. They are used by investors to make a profit even if the price fluctuate to protect their business. It is almost like putting a price on something in advance.
My area of interest is the use of AI in futures trading. I'm really worried about how to predict price movements and manage risk effectively when using AI. Has anyone tried platforms like Trade Ideas?
TheSmartInvestor wrote: Thu May 22, 2025 5:11 pmFutures are agreements to Buy/Sell Later. Futures are contracts where you agree to buy or sell things like oil or gold at a fixed price on a future date. For an instance, a farmer agrees to sell 100 kg of wheat for $500 in 6 months, no matter what happens to wheat prices at the said time.
100001181.jpeg Why Futures Exist - Farmers, companies, and traders use them to avoid all sort of risks like bad weather or price changes.
- Speculators also use them to profit from any kind of price swings.
How Futures Work (Step-by-Step)
1. Agree on a Price: In futures, price is locked today for a future trade.
2. Set a Date: a decision is made when the trade will happen. It could be 3 months later or even more.
3. Profit or Lose: It's a two edged sword because when prices rise, buyers profit and if prices fall, sellers profit. In real-life, imagine reserving gold today for $500, even if it might cost $700 at launch. That means, you’re using a "future contract".
Types of Futures
1). Commodities: Examples of commodities are Oil, gold, wheat, etc.
2). Indices: Examples are S&P 500, NASDAQ, etc.
3). Currencies: examples of currency pairs are USD/EUR, GBP/JPY, etc.
4). Cryptos: These are Bitcoin, Ethereum, etc.
How to Trade Futures in 2025 (For Beginners)
Step 1: Learn how to trade futures. Like knowing what contract size is and all other things:
Contract Size means, how much you’re trading. For instance, you can make a contract of 1 oil = 1,000 barrels).
- Margin is a deposit to open a trade. It’s like a security fee.
- Expiry Date: This is when the contract ends.
Step 2: Pick a Trading Platform
You can use apps like TD Ameritrade, Interactive Brokers, or Binance Futures(for crypto).
Step 3: Start Small
- Start small by trading mini-contracts to limit risk. For instance, micro Bitcoin Futures let you trade 1/10th of a Bitcoin.
Step 4: Practice First
-Use a demo account or fake money to test strategies before investing big.
3 Big Mistakes to Avoid
1. Ignoring Leverage Risks: Futures let you control big amounts with little money but losses can exceed your deposit of care is not taken.
2. Forgetting Expiry Dates: Contracts expire. So you are expected to close or roll them over before they do.
3. Trading Without a Plan: Don’t ever guess when trading. You can use tools like stop-loss orders to minimise losses.
2025 Futures Trends to Watch
1. AI-Powered Trading: Use apps like Trade Ideas. It lets you use AI to predict price movement
2. Green Energy Futures: A typical example is lithium for electric cars and carbon credits. They are really booming.
3. Crypto Futures: The Bitcoin and Ethereum contracts are now the mainstream. You don't want to miss out.
Why Trade Futures in 2025?
- Hedge Risks: It's a protection against price changes.
- 24/7 Markets: You can trade crypto or global indices at anytime, which is an added advantage.
- Profit in Any Market: Prices go up and down and the good thing is, futures let you bet on both.
4 Tips for New Traders
1. Learn Free: There are available resources that lets you learn for free. Use this forum or watch YouTube channels like *lRayner Teo or The Trading Channel to gain the neccessary knowledge.
2. Follow the News: It's very crucial to follow the prices because they react to weather, politics, and tech breakthroughs.
3. Start with Commodities: Gold and oil are easier to understand than currencies. So, it's advisable to start with them
4. Use Stop-Loss: The lets you exit trades automatically to avoid losses and to also protect your money.
This thread has been insightful. The basics of futures trading have been clearly explained. I want to know if there are helpful resources and platforms for trading in Bitcoin and Ethereum contracts.
