It is imperative that an investor whom is placing any amount of their investment portfolio within the futures section stays up to date of daily market announcements. Prices in commodities often change in either direction much quicker than stocks and shares. There are many ways this information is monitored, most often watching both technical indicators and basic daily information.
Technical indicators are more complex to the beginner, however, in most instances are vital. These indicators are tools which are used by taking historical information and analysis of market prices and plotting various types of graphs and patterns. The most commonly used tools are the GANN theory and the Elliot Wave analysis. The graphs will often consist of moving averages, current trending lines, both over bought and over sold indicators and momentum signals.
Vital data which is monitored typically will include weather reports, livestock, interest rates, world news, government news and reports, interest rates, world financial news and current crop information.
Whilst many consultants and seasoned traders will recommend using both the above methods, many use only one or the other. You may also find that some investors will develop their own strategies to create systems that work for them. It is important however that if you are going to create your own strategy or purchase one from another investor or firm that you use due diligence to investigate the system before dropping any of your cash into it. There are many systems out there which make ludicrous claims, when in fact the investor will be lucky if they do not lose all invested.
It is also important to note, that keeping constant track of market prices, date and charts takes many hours of each day, and it is often best to find a broker that does this for you. Quite often open positions are closed after a few hours because of the constant fluctuation of up and down movement.
This does not mean that as an investor you can not make profits in the futures market, you just need to consider safer ways of doing so. Many futures traders will make their trades on a weekly basis, leaving a position open for more than a week, sometimes even a few months. This will often help avoid emotional selling, and even buying of their positions due to panic over market movements.
