Thank You DaveT and Bgold.
I was wondering if you have any thoughts on the trading platform to use. I have an account with finspreads but their spreads seem a bit large, 833.25-836.75 for the March Soybeans for example. Can you recommend another alternative ? Any other advice for a complete beginner.
I have only used spread-bet companies myself thus far, but have pencelled in a move to direct access in the near future.
As you may know, spread-bet companies vary in the size of their spread, but also in their range of markets and on-line dealing of contracts.
1) Spread-bet is relatively easy to comprehend, (ie £/$ per point,etc), and it's currently tax-free.
The main players are IG index, City Index, Canor Index, Deal4Free, TradIndex, Finspreads, CapitalSpreads.
2) Direct Access brokers (where you trade the actual futures contracts in 'lots') is a little more complex, and you pay a commision on each contract per trade ('per round turn'). Gains are taxable above the annual CGT limit.
See the Direct Access forum on this site for more info, and on Indepentant Brokers.
3) CFD's (Contracts For Difference) are increasingly accessable for different types of traders. The spreads are narrower then Spread-betting, but gains are taxable above the annual CGT limit.
Thus far they have been mainly used for Stock and Forex trading, but I understand some providers may now/soon trade commodities?
I would suggest you read as much as you can about the principles of futures trading, CFDs and Spread-bet before opening an account. Much can be found for free on the web;just use your search engine with the words 'futures' and 'trading', etc.
Not to mention this site ofcourse.
Also, get a couple of good books on the subject. There are loads of titles, and now several CD-ROM/DVD TUTORIALS to choose from.
See this site's book store, or visit :
The best advice one can give a beginner is to read,study and learn as much as you can.
Have you developed a trading strategy? Will you use Technical Analysis or study fundamentals of supply/demand? Both?
This business is not easy, but if you are dedicated, it can be very enjoyable and POTENTIALLY very financially rewarding.