What is Futures Trading? What it means is the buying and selling of products which are not yet produced.
Commodities are being traded many times even before anyone gets to see or even build the product.
These cash commodities are what are known as "futures.
" Again, it is the trading of cash commodities, which represent products that are not processed yet.
Of course, the heart of trading is always buying products at the lowest possible price, then selling it for a higher price.
The same principle applies here.
The futures get traded over and over as its price increases, so does its value.
In fact, it was because of Futures Trading that the world hit a food crisis recently.
The trading of one future interfered with another, driving the other products price to rise.
That other product was food.
This is what happens when people trade products that are not yet accounted for and do not keep track of them well.
However, the best way to earn from this type of trade is to treat it like any other stock.
Buy futures, hold it for a long time, be patient enough until its price has increased.
If you are happy enough with the return profit, then it is time to sell it to others who are willing to pay.
You earn your part and all is well.
Futures Trading is really more about long-term investments.
The advantage of it though is that you are trading ownership of stock of products that have not yet been manufactured.
You are selling prospective products.
You can sell stocks back and forth forcing the stock price to rise, and that will mean big profit for you.