# **How to Be a Pro in Trading Futures**


If you are a beginner trader, you might be well aware of the terms like Future and Options. Future and options both are derivatives of Stock options. The basic concept of a Future is that if you analyze charts of Stocks and predict that a particular stock might go up or down by several points in the coming months, buy the stock. But to make significant profits, you should invest large sums of money to buy large quantities of the stock. Still, the profit you made might not yield significant percentages, and no retail buyer would be able to buy stocks then.

<strong>How Are Futures Traded?</strong>

This is where <strong><a href="https://www.futurebrokers.com/futures-trading-platform-comparison.php">future trading platforms</a></strong> play a crucial role. If a stock price is 2000, you want to buy a large quantity of the stock, say 250, you should invest an amount of 6 lakhs, but with the Futures option, you need to deposit only a fifth of the amount, and the brokers leverage the rest. But how do the brokers benefit from it? Futures, unlike stocks, come with an expiry date. You can buy the Futures for only the next three months.

Next, you can’t buy individual shares here; you only have to buy them in defined quantities. They come in lots and not individual quantities. When you buy a Future option and your stock hits your target price, you will find favourable movement in the Future and profit. But when the movement is not according to your analysis, you could lose money.

<strong>Tips for Trading In Futures</strong>

<strong>Have a Trade Plan in Place</strong>

Enough emphasis cannot be made on the need for a trading plan. Before entering a trade, be sure of your technical and fundamental analysis. Be aware of the business news and global cues before entering the trade. Be clear of your target and, most importantly, stop loss. Having these in place is very important for every trader.

<strong>Diversification Doesn’t Work</strong>

If you are taking a trade, make sure to make only one or two trades at a time, you might not be able to watch every trade movement simultaneously, focusing on one of the two trades. But diversifying your trading sectors like, if you are trading in the banking sector, you can choose another trade from a pharma sector, so that at times if one doesn’t perform well, you would be able to minimize your losses.

<strong>Be a Buyer and a Seller</strong>

In trading, you don’t have to be either a bull or a bear, be both. Don’t limit yourself to one side of the movements or practices. Based on your analysis, opt for a call or a buy option. Sometimes you can do both, and this is called straddling. If you know, you can make profits in these trades.

The last tip is to choose <strong><a href="https://www.futurebrokers.com/">brokers for Futures Trading</a></strong>. Since Future trading is costly, you have to choose a trusted broker who does not bill you for a high brokerage and hidden costs for your traders and leverages.