8 Essential Skills Futures Traders Must Practice

Are you thinking about diving into the exciting world of futures trading? Let’s discuss some common skills practiced among futures traders to help you keep your head in the game.  

Futures traders often share two goals: 1) increase their income and 2) gain some financial freedom and independence. Futures trading can be a lifestyle as well. There are markets that trade virtually 24 hours a day, and with a computer, you can trade from anywhere in the world—at the beach, in the mountains, wherever life takes you. However, regardless of where you’re trading, there are eight skills  futures traders should consider practicing to help you achieve your goals.  

1. Futures traders practice their analytical skills

While the world of futures trading is vast, covering a wide range of markets and products trading all over the globe, most traders focus on just a few markets to trade. Although it would be impossible to know everything about every market, a trader can become a master of a few markets to start then gradually expand their trading to other markets. 

When placing a trade, futures traders don’t guess or try to make predictions on where the market is heading. They react to market opportunities using setups and triggers based on technical analysis and backtesting as part of an overall proven trading plan. This is why having the right platform—with features like a Strategy Analyzer—is important and can help make your life as a futures trader easier. A trading plan can keep you focused, instill discipline, and prevent negative emotions—like fear and greed—from creeping into your trading.  

2. Futures traders keep fear and greed in check

Fear of losing can trick you into getting out of a winning trade too soon or staying in a losing trade too long, hoping the position will turn around. Greed can keep you in a winning trade too long or make you cut your losses before the trade can play out.  

Rather than getting caught up in the excitement and creating unforced emotional errors, futures traders understand that there will always be winning trades and losing trades. They know that sticking to the rules of a trusted trading plan will help eliminate emotional errors and produce more consistent results in the long run. 

Learn more about building a futures trader’s mindset here.  

3. Futures traders practice patience

Futures traders are patient.  Warren Buffet said, “The markets are a device to transfer money from the impatient to the patient.” For traders this means only trading when the market environment is favorable to their style and picking their spots, rather than forcing the a trade. Experienced futures traders don’t don’t gamble or hope; they measure the situation in front of them and make well-informed trading decisions.  

4. Futures traders focus on the process

Futures traders love the trading process—including building a trading plan, preparing before the trading day, and focusing on trade setups and triggers. Their focus is on the consistent execution of their trading plan and not so much on winning and losing trades. Futures traders know there will always be winning streaks and account drawdowns, and they trust in the process. 

5. Futures traders stay organized with a trading plan

Before starting to trade with real dollars, a futures trader should always have a solid, tailored trading plan in place to provide a roadmap for decision making and help them stay focused on their process and goals. The plan should include:  

• specific entry and exit rules 
• risk management 
• position trade sizing guidelines 
• a clear set of rules for managing trades for profit or loss 

This allows traders to approach each trade with a clear understanding of their objectives, reducing the likelihood of impulsive and emotional decisions. 

A well-crafted trading plan will also help traders assess their performance over time, identify areas for improvement, and adjust their approach as needed. In the end, a trading plan is an essential tool for any futures trader looking for consistent results. Develop your futures trading plan here. 

6. Futures traders master risk management

Risk management is key to futures trading—you can’t trade if you run out of money. Preservation of capital takes two forms: account level risk management and trade-by-trade risk management. Traders should risk only a small percent of their account on any one trade. This requires a balance between risk and reward, starting with setting an appropriate trade size that allows you to set a stop loss that limits losses but still provides enough room for the market to fluctuate without taking you out of a trade prematurely. 

Learn how to define your risk management strategy here. 

7. Futures traders practice trading

Practicing placing trades and testing your ideas in a simulated demo account—like the one offered here at NinjaTrader—gives new and experienced futures traders alike the ability to stress-test their skills. So, in the heat of the trading moment, muscle memory will hopefully kick in and prevent you from making a costly mistake.  

8. Futures traders are always learning

Futures traders know that learning about the market never ends. There is always something new to learn—such as market tendencies, technologies, and innovative ways to analyze the market. Growing and learning can provide traders with a competitive edge that allows them to make better-informed decisions. The success of a futures trader ultimately comes down to their ability to adapt, adjust, and stay ahead of the curve.

Watch our daily livestream as our experts analyze the market in real-time.