Top 50 Futures Trading Rules

500 experienced futures brokers were asked what caused most futures traders to lose money when comes to trading futures.

Their answers reflected the trading experience of more than 10,000 futures traders. Download the PDF and find out what they said.

1) Have a Plan

Many futures traders trade without a plan. They do not define specific risk and profit objectives before trading. Even if they establish a plan, they "second guess" it and don't stick to it, particularly if the trade is a loss. Consequently, they overtrade and use their equity to the limit (are undercapitalized), which puts them in a squeeze and forces them to liquidate positions. Usually, they liquidate the good trades and keep the bad ones. Learn how to do futures trading the right way.

2) News Factor

Many traders don't realize the news they hear and read has, in many cases, already been discounted by the market.

3) Trade Objectively

After several profitable trades, many speculators become wild and nonconservative. They base their trades on hunches and long shots, rather than sound fundamental and technical reasoning, or put their money into one deal that "can't fail."

4) Know Your Size

Traders often try to carry too big a position with too little capital and trade too frequently for the size of the account.

5) Don't Get Greedy when it comes to Trading Futures

Some traders try to "beat the market" by day trading, nervous scalping, and getting greedy.

50 Important Future Trading Rules

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Disclaimer

The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used.

Past results are not necessarily indicative of future results. The risk of loss in trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.

Day trading can be extremely risky. Day trading generally is not appropriate for someone of limited resources and limited investment or trading experience and low-risk tolerance. You should be prepared to lose all of the funds that you use for day trading. And more, you should not fund day-trading activities with funds required to meet your living expenses or change your standard of living.

You should be wary of advertisements or other statements that emphasize the potential for large profits in day trading. Day trading can also lead to large and immediate financial losses.

Day trading will generate substantial commissions, even if the per trade cost is low. Day trading involves aggressive trading, and you will pay a commission on each trade. The total daily commissions that you pay on your trades will add to your losses or significantly reduce your earnings.

Day trading on margin may result in losses beyond your initial investment. An investment of less than $25,000 will significantly impair the ability of a day trader to make a profit. Of course, an investment of $25,000 or more will not guarantee success.