Trading

Future trading is a versatile investment vehicle that is widely used by traders to maximize their gains and manage risk. It enables individuals to trade on the price movements of a wide array of assets, including stocks, commodities, currencies, etc.

By using futures trading strategies, traders can make the best of their trades and gain profit. But what are the best strategies for trading futures? Let’s find out.

Best Strategies for Futures Trading

For success in a market as wide as the futures market, you need well-planned and tested strategies. Here are some of the best and most efficient strategies forfutures trading.

1.Going Long

Going long is a basic strategy in future trading where you will buy a futures contract with the expectation that the price of the underlying asset will increase in the future. This strategy is based on the assumption that the trend in the market is bullish and that the price will continue to rise. You can profit by selling the contract at a higher price than the price you paid to buy it.

2.Trend Following

This strategy involves identifying the prevailing trend in the market and then following it by taking long positions (buying the future contract) in an up-trending market or short positions (selling the futures contract) in a down-trending market. This strategy is easy to implement and you can apply it to various types of futures contracts having different underlying assets.

3.Pullback Strategy

A pullback strategy is a popular approach to trading where we take advantage of temporary price revisions or ‘pullbacks’ in a bullish market. You must identify an uptrend and wait for the price to retreat from its highs, getting an opportunity to buy the asset in the future at a lower price. You can profit by selling the future as the price resumes its upward trajectory.

4.Spread Trading

Spread trading is a strategy where you must buy and sell two different futures contracts at the same time. You will take a long position in one contract and a short position in another, expecting to profit from the price difference between the two. Spread trading is considered a low-risk strategy as it takes advantage of the differences in price between two related assets, rather than betting on the direction of the market.

What is the Best Strategy for Futures Trading?

There is no one best strategy when it comes to trading. The final choice depends on individual risk-taking capacity, goals, capital, and market condition. Thus, do your research first before finalizing a strategy.

You can also use readymade future strategies for smoother implementation. Dhan providestradingview charts, indicators, a margin calculator, and a selection of other tools to fast-track your future trading.

Conclusion

Every futures trading strategy comes with its own set of risks and rewards. You can choose readymade futures strategies or manually implement them in your trades to maximize your gains. However, keep in mind that the best strategy is one that supports your individual preference, goals, and market conditions.