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Why It Is Important to Work With a Futures Broker

October 7, 2020 by Daniels Trading| Futures 101

If you don’t have a background in finance, the futures markets can seem intimidating. Given the complexities of active trading, it’s a great idea to work with a futures broker until you can achieve a basic level of competency.

Why are the services of a broker so valuable to futures market newbies? The answer lies in three key resources: experience, knowledge, and time. For a good broker, these attributes are in abundant supply, each enhancing trader development.

Experience Is the Best Teacher

The popular adage goes “experience is the best teacher,” and this statement may never be more true than it is in futures trading. Experience is a critical part of both analysis and strategic execution. Without ample time in the markets, a trader is likely to make and repeat unnecessary mistakes. Although past performance doesn’t guarantee future results, taking the time to work with a futures broker can put you on the road to sustainable profitability.

At this point, you may be wondering how much experience is enough? One frequently cited metric is the 10,000 hours hypothesis from Malcolm Gladwell’s Outliers: The Story of Success. According to Gladwell, it takes roughly 10,000 hours of “dedicated practice” to gain mastery of any discipline. The 10,000-hour threshold is loosely equated to 10 years in any field and is a hotly debated, controversial subject.

Although it may not take you 10,000 hours to master futures trading, it’s a safe bet that your broker is more evolved than you are. If your experiential base is limited, then drawing on a broker’s deep experience is one way to quickly boost your development as a trader.
Find out why so many people trust Daniels Trading with their futures trading needs. Watch our video today to learn more about our service offerings >>

It’s Impossible to Know Everything

One of the potential pitfalls of futures trading is how fast the environment can change. Strategies that worked well today often fail tomorrow; participation rates rapidly evolve, as do order flow and volatility. Simply put, attempting to learn everything all at once is largely an exercise in futility. It just isn’t plausible to know it all, all the time!

However, if you work with a futures broker, you will have a better idea of what is essential knowledge and what isn’t. For instance, a broker can offer indispensable guidance in the following crucial areas:

  • Selecting an ideal product or market
  • Identifying vital market drivers and underpinnings
  • Understanding the tenets of technical and fundamental analysis
  • Developing a robust, comprehensive trading strategy

To avoid becoming overwhelmed with extraneous information, having a dialogue with your broker can highlight what you absolutely need to know. Personal experience is a big part of expanding one’s knowledge base, but the expertise of a market professional can help you streamline the educational process.

There Are Only 24 Hours in a Day

In addition to experience and expertise, securing access to a broker can increase your efficiency exponentially. Working full-time and raising a family are labor-intensive endeavors, so deferring various trade-related tasks to a broker can help you maximize opportunity in the marketplace.

Because of time constraints, legions of aspiring futures traders choose to take an exclusively “hands-off” approach to the markets. Basically, hands-off traders turn to automated systems or broker-assisted strategies to generate returns in the live market. Here are a few popular ways of doing just that:

  • Trade automation: A broker can provide the technological framework necessary for automating trade recognition, order placement, and execution.
  • Managed futures: Diversify holdings, hedge risk, or pursue speculative profits via the functionality of managed futures.

One of the biggest reasons to work with a broker is the time factor. If your job and/or family duties total 40 hours a week or more, then odds are you won’t have enough time to trade successfully. However, by employing automated systems or managed futures, you can participate in the markets while fulfilling your other responsibilities. For some traders, this is an ideal way of boosting income while nurturing a career.

Begin Work with a Futures Broker Today

To learn more about the benefits of working with a broker, check out the service suite available at Daniels Trading. Featuring a collection of self-directed/online and broker-assisted options, Daniels Trading has everything you need to engage the futures markets on your terms.

Watch Our “Why Choose Daniels Trading” Video

Filed Under: Futures 101

About Daniels Trading

Daniels Trading is an independent futures brokerage firm located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading is built on a culture of trust committed to the firm’s mission of Independence, Objectivity and Reliability.

Risk Disclosure

THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.

THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, DANIELS TRADING DOES NOT MAINTAIN A RESEARCH DEPARTMENT AS DEFINED IN CFTC RULE 1.71. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVERAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS.

TRADE RECOMMENDATIONS AND PROFIT/LOSS CALCULATIONS MAY NOT INCLUDE COMMISSIONS AND FEES. PLEASE CONSULT YOUR BROKER FOR DETAILS BASED ON YOUR TRADING ARRANGEMENT AND COMMISSION SETUP.

YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE "RISK DISCLOSURE" WEBPAGE ACCESSED AT WWW.DANIELSTRADING.COM AT THE BOTTOM OF THE HOMEPAGE. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.

GLOBAL ASSET ADVISORS, LLC (“GAA”) (DBA: DANIELS TRADING, TOP THIRD AG MARKETING AND FUTURES ONLINE) IS AN INTRODUCING BROKER TO GAIN CAPITAL GROUP, LLC (GCG) A FUTURES COMMISSION MERCHANT AND RETAIL FOREIGN EXCHANGE DEALER. GAA AND GCG ARE WHOLLY OWNED SUBSIDIARIES OF STONEX GROUP INC. (NASDAQ:SNEX) THE ULTIMATE PARENT COMPANY.

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Risk Disclosure

THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.

THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, DANIELS TRADING DOES NOT MAINTAIN A RESEARCH DEPARTMENT AS DEFINED IN CFTC RULE 1.71. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVERAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS.

TRADE RECOMMENDATIONS AND PROFIT/LOSS CALCULATIONS MAY NOT INCLUDE COMMISSIONS AND FEES. PLEASE CONSULT YOUR BROKER FOR DETAILS BASED ON YOUR TRADING ARRANGEMENT AND COMMISSION SETUP.

YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE "RISK DISCLOSURE" WEBPAGE ACCESSED AT WWW.DANIELSTRADING.COM AT THE BOTTOM OF THE HOMEPAGE. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.

GLOBAL ASSET ADVISORS, LLC (“GAA”) (DBA: DANIELS TRADING, TOP THIRD AG MARKETING AND FUTURES ONLINE) IS AN INTRODUCING BROKER TO GAIN CAPITAL GROUP, LLC (GCG) A FUTURES COMMISSION MERCHANT AND RETAIL FOREIGN EXCHANGE DEALER. GAA AND GCG ARE WHOLLY OWNED SUBSIDIARIES OF STONEX GROUP INC. (NASDAQ:SNEX) THE ULTIMATE PARENT COMPANY.

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