Future trading strategies (futures contracts) are a popular tool that helps investors optimize profits, especially when combined with leverage. However, this is also a double-edged sword if there is no clear strategy. Below is a detailed analysis of Future trading strategies and common mistakes made by individual investors:
I. Popular Future trading strategies
1. Scalping (short-term trading)
• Characteristics: Open and close trades within minutes or tens of minutes.
• Suitable for: Traders who have time to closely monitor the market, preferring a fast pace.
• Requirements: Low transaction fees, fast response speed, good alert system.
2. Day Trading (intraday trading)
• Characteristics: Do not hold positions overnight, often closing trades within the same session.
• Advantage: Avoids the risk of overnight price gaps, better emotional control.
3. Swing Trading (trading on waves)
• Characteristics: Hold positions for several days to weeks, taking advantage of medium-term waves.
• Based on: Technical analysis + news + money flow trends.
4. Position Trading (trading on major trends)
• Characteristics: Hold positions for the long term, taking advantage of clear market trends.
• Risk: Easily 'swept' if not setting flexible SL or weak capital management.
II. Common mistakes of individual investors when trading Futures
1. Using excessively high leverage
• High leverage can multiply profits but can also cause accounts to 'burn' quickly.
• Typical mistake: Using 50x-100x with the expectation of 'instant profit', but the market can just slightly fluctuate and lead to liquidation.
2. Not setting Stop-Loss (SL)
• SL is a vital factor for long-term survival in the market.
• Not setting SL = trading by emotions and easily leading to a loss of risk control.
3. Trading by emotions
• FOMO (fear of missing out), FUD (fear, uncertainty, doubt), revenge trading are the main causes of traders' losses.
4. No specific trading plan
• Many traders enter trades without clear reasons, not pre-defining entry/exit points, TP/SL.
5. Overtrading
• Each trade incurs costs (transaction fees, time, energy). Continuous trading can lead to mental fatigue and poor decision-making.
6. Lack of discipline and patience
• When traders see the market is not going in the right direction, many rush to cut their trades or reverse, leading to 'cutting lows - buying highs'.
III. How to improve Future trading strategies
1. Determine a trading style that fits your time, psychology, and experience.
2. Strict capital management: Never risk more than 1-3% of total capital for each trade.
3. Apply technical analysis + risk management: Combine RSI, MA, Volume, Fibo, resistance/support to determine optimal entry points.
4. Focus on quality over quantity: Only enter trades when there is a high probability of winning.
5. Keep a trading journal: Record the reasons for entering trades, results, and emotions to gradually improve.