I love to read first hand accounts of how traders begin by failing in the markets and then instead of just giving up, they take a step back and look at how their trading system fails to make profits and then tweak their system to go back into the markets to become a successful trader.

How To Trade The Futures Market is a great example of this type of story! Within the pages Malcolm Robinson gives an indepth account of how he went from losing £60,000 (currently about US$120,000) in his first year as a futures floor trader to turning himself into a successful and profitable professional trader.

How To Trade The Futures Market is basically split into 2 parts.

The first part explains all about Futures Trading – What it is, how it works and how to trade them. Malcolm Robinson explains exactly what the futures market is and gives a good account of the history of the futures markets. He goes on to explain the difference of being a floor trader on a futures exchange and what it is like to trade using direct access (he has experience of both).

He goes on to give an introduction to the worlds main future exchanges and explains different ways in which these exchanges are used by different types of investors to make a profit. Things then get fairly technical as he goes on to explain exactly how futures contracts work and how the trader can greatly benefit from this knowledge.

The next part of How To Trade The Futures Market takes a look at the practicalities of futures trading and covering topics such as contract size, delivery, last trading days, settlement, and the all important tick size and margins. All of this can be fairly confusing, but Malcolm explains it simply and concisely.

Malcolm then goes on to cover the mechanics of futures trading – taking a look at different order types and how to use them (and not use them) to your advantage. He also takes a very in depth look at how a direct access trading platform works (with plenty of screenshots to avoid confusion).

The second part of How To Trade The Futures Market goes into the skills and knowledge that is need to trade futures successfully.

This section begins with a chapter called Market Forces and explains about different things that affect the price of futures contracts. The aim of this is to show how to get a feel for the way the prices constantly change on the futures markets.

Then there is a fair amount of material that covers bar charts and how to read them. Malcolm goes into quite a bit of detail about this topic and explains a lot about bar charts that I was not familiar with.

The next topic is the all important issue of Volume. This again is something where I learned a lot of new tricks from reading How To Trade The Futures Market. A lot is covered about how volume interacts with its corresponding bar chart and of course how to make a good profit from it!!

How To Trade The Futures Market then covers Trends – a topic that is close to my heart. This was an interesting chapter for me, and Malcolm provides a few effective methods where the futures trader can make money from understanding how trends work.

Next, Malcolm goes onto explain how to read the current price of a futures contract. I thought this was a pretty straight forward topic, but with all his experience Malcolm is able to go into the psychology of price behavior and what affects the rising and falling price.

Reading the Depth of Market is also covered here. This was also a topic that I previously did not know enough about and was glad to be informed about.

On the topic of psychology, How To Trade The Futures Market then covers a bit about executing your trades and common problem traders have with this seemingly simple task, and simple steps that can be taken to overcome them.

The final chapter of How To Trade The Futures Market covers another very important topic – Money Management. In my opinion this is the 1 issue that can really make or break a successful trader, and I don’t think that I can ever learn enough about this topic.

If you are thinking of buying How To Trade The Futures Market, then please bear in mind that there are some great extra freebies that come with it. The first of which is a piece of software called Market Master – a trading simulator that you can use with historical or live data to practice your trading. Malcolm makes good use of this software in explaining some of his trading techniques.

You also get the following eBooks for free:

• Day Trading Mind – Covering the psychology of Day Trading.
• The 123 System – A simple trading system that can be applied to any market.
• The E-Book Of Technical Market Indicators – A guide to just about every technical indicator that exists.
• Introduction To Forex – a beginners guide to Forex.
• A Practical Guide to Swing Trading – A how, what, when, why guide to Swing Trading.
• The Pocket Book of Economic Indicators – A handy little book to enhance your knowledge of indicators that effect your investments.

I will review these books in the future. You can sign up for the Trader Knowledge Newsletter if you would like to be notified of these reviews.

Also, you can Click Here to visit the How To Trade The Futures Market website.

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The reason that E-mini futures trading can be a really good choice for the trader who is starting out in futures trading is that the trading lots for the futures contracts are considerably smaller, so lend themselves to the trader who does not want to risk as much trading capital.

As any trader who wishes to embark into the leveraged world of the futures pit should know, there is a considerable amount of extra risk compared to stock trading because of the leverage that is allowed when buying and selling contracts.

Much is written about huge fortunes that are made when gaining from huge risks taken with maximum leverage applied to a trade. Maybe not so much is written about fortunes that are lost when it all goes wrong and the margin call is made from the broker and everything is lost.

When it comes to trading e-mini futures, the contracts are considerably smaller than their full counterparts and thus enable the e-mini trader to carry a much smaller risk.

For example, when trading 1 normal contract S&P Futures Contract, the point size is equal to $250.

However when E-mini Futures Trading the S&P, the point size is only equal to $50.

So, by trading e-mini futures, the trader is able to implement a trading plan with less trading capital.

Of course, risk is subjective and is not necessarily smaller just because the futures contracts are not so large. Reducing risk with E-mini futures trading must still go hand in hand with and effective Trading Plan.

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Why is it so important to have a Futures Trading System?

Probably the biggest reason is that if you are going to be speculating by trading financial instruments, then trading futures is probably carries the highest risk.

With the high amounts of leverage, lock limits and volatile markets, you need to do everything possible to arm yourself against huge losses that can occur when trading in the futures market if you don’t have a well laid out trading system.

If you don’t already have a Futures Trading System, there are several ways to get one.

In my opinion, the best way to get a trading system of any kind is to develop one yourself. To do this you will need to study the field of futures. Find out everything you can about the markets and instruments that you will be trading.

With futures trading, there are several extra factors to consider in that there are so many different types futures contracts that you can trade. They cover everything from agricultural products, precious metals, stock indexes, currencies, weather and many more. They are all affected by different circumstances that cause the price to change so radically.

You also need to be aware of whether you will be trading with a Fundamental or Technical approach and make sure that you are completely comfortable with the approach that you choose.

If you are interested in learning about the futures markest, then Jack Schwagers A Complete Guide to the Futures Markets : Fundamental Analysis, Technical Analysis, Trading, Spreads, and Options is a good place to start. While you are at it, don’t forget to read Schwagers other classic, Market Wizards – Interviews With Top Traders.

Another respected resource is The Futures Game: Who Wins, Who Loses, & Why that walks you through the universe of futures trading possibilities and opportunities.

If you don’t want to develop a Futures Trading System yourself, then you are going to have to get hold of one that has been created by someone else.

There are plenty of products on the market. Scalping the E-mini’s and How To Trade the Futures Market are two typical examples of what is available.

If you are going to buy a Futures Trading System then there are two major types that you can buy.

The first is a trading system that teaches you what signals to take action upon to buy and sell your futures contracts, and also what it is that generates those signals.

The second is commonly known as a ‘Black Box’ system. Here the trading system will just give Buy and Sell signals. It will not teach you how the signals are generated.

It is important to realise that if you buy a Futures Trading System, that you will have to employ a fair bit of faith in the system. You should not be tempted to second guess as the results could be disasterous.

This is contrary to what happens if you develop your own trading system. When doing this you will have more confidence in the system and be less inclined to overide its signals.

Which ever method you choose, also remember to prepare yourself psychologically to employ your own Futures Trading System in the futures market.

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