Learn To Trade Futures | Commodities Futures Trading Course

There is a saying in the futures trading industry that 90% of the traders who have less than 2 years trading experience, ends up losing either all or most of their money during that time.

This is the reason why I have come up with this online free commodity futures trading course. Yes, many of it is information that new traders can read elsewhere, but it’s the repetition of the basics and fundamentals of futures trading which turns into to good trading habits down the road. Hence, this commodity futures trading course was born.

Now than, getting on to money management.

Money management is the skill of saving and limiting losses in your commodity trading account. At times, traders take too big of a risk because of the chance to make bigger profits, and they end up losing more money. I know, because it has happened to me over the years, but I guess I was fortunate enough to get out without losing most of my trading capital.

Here’s how I figure out how much I risk per trade. If I have a $5,000 dollar account, I take between 3%-3.5% of that, and that is how much I will risk in one particular trade. In this case the dollar amount will be between  $150 to $175 dollars will be my stop loss.

The reasoning behind this is that it should take more than 25-30 losing trades before you can make money on a trade. This 25-30 losing trade buffer offers newbies a chance to learn from their mistakes and have a greater chance in recovering from those loses without getting totally wiped out.

So, if $175 dollars is what my maximum loss will be on a trade, than my profit target will at least be double that or $350. Does this always work out exactly by the numbers, of course not. But if you implement a money management plan like this you chances surviving can increase while you learn exactly how the markets operate.

Now, there will be times when you can move up that stop loss tighter as markets move your way, thereby increasing your 2:1 profit/loss ratio substaintially higher. How this is done is you simply tighten your stop loss order as you are in the black from a trade.

One of the best times to do this, is if you trade starts off fast and you are profiting right off the bat. Be careful not to tighten to quickly and allow the market to breathe a little. At the same time, you do not want to loose the profit that you have just made.

Look to tighten the your stop loss once you have covered your stop loss money limit. In this case it would be between $150 and $175 dollars. As soon as you make this much in a trade, tighten your stop to a breakeven point. If the market comes back down, worse case scenario is that you will only lose the commissions that enabled you to execute the trade .

Related posts:

1. Successful Tips On How To Trade Commodities "When learning how to trade commodities, one of the most...
2. Learn To Trade Futures – Limit Losses And Build Profits! "The trading risk involved with how to learn to trade...
3. Commodity Futures Trading Course Series So this is my ongoing articles on trading futures...