What strategy should a beginner start with? Futures trading strategies for true beginners typically start with trend following, which means trading in the same direction the market is already moving rather than trying to predict reversals. This guide covers futures trading strategies for beginners: why trend following works as a starting point, how to turn it into rules you can repeat, and how to manage risk before you trade live.
What is futures trading? A beginner’s starting point
A futures contract is an agreement to buy or sell an underlying asset or index, such as the S&P 500 Index or crude oil, at a set price on a future date. Futures traders don’t need to hold a contract until expiration; instead, they buy and sell contracts to profit from price movement in the futures markets themselves.
If you’re still working out how to start trading futures, our futures trading basics hub covers contract specs, margin, and trading hours before you build out a strategy. For a step-by-step walkthrough of opening your first account, see our guide to getting started trading futures.
Once you understand how the futures markets work, the next decision is choosing a strategy you can stick with consistently.
What makes a trading strategy good, not just popular
A good trading strategy is defined by whether a trader can follow its rules consistently, not by how complex or exciting it looks on paper.
A few criteria separate a strategy worth building on from one that just looks impressive:
- Consistency: You can follow its entry, exit, and risk rules the same way every time, in calm markets and volatile ones.
- Clarity: The rules are specific enough that two different traders would make the same decision from the same chart.
- Fit: It matches your schedule, risk tolerance, and the futures contracts you actually trade.
- Testability: You can test it in a sim environment before deciding whether to trade it live.
Simulated trading is hypothetical and does not reflect actual trading or real-world results.
If you want to compare approaches before choosing one, our breakdown of 10 futures trading strategies ranked from easiest to hardest can help you gauge what fits your experience level.
With those criteria in mind, trend following is a strategy built for traders taking their first steps into the futures markets.
Trend following: a beginner-friendly strategy to start with
Trend following is a practical starting point for many beginners because it reduces the number of decisions you have to make.
Instead of calling a market top or bottom, you’re identifying a trend that’s already underway and trading with it.
How trend following works in plain terms
In an uptrend, a futures contract’s price is making higher highs and higher lows over time; in a downtrend, it’s making lower highs and lower lows. A trend-following strategy enters a trade in the direction of that established move rather than anticipating when it will turn.
Trading with an established trend means you’re reacting to price action that’s already confirmed, instead of trying to predict when a reversal will happen.
Simple tools that help confirm a trend
Traders often confirm a trend using a simple moving average (SMA) or exponential moving average (EMA), both of which smooth out day-to-day price noise, so the underlying direction stands out. A price closing above a rising moving average, or below a falling one, is a common trend confirmation signal.
Trend following gives new traders a structured, rules-based way to enter the market, but it only works if those rules are applied the same way every time.
Systematizing your approach: turning a strategy into rules you can repeat
Systematizing a strategy means writing specific entry, exit, and risk rules in advance, and NinjaTrader’s Strategy Builder lets beginners turn those rules into an automated strategy without coding.
Writing down entry and exit rules before you trade
A systematic trading strategy typically includes four written rules:
- Entry rule: the exact condition that triggers a trade, such as price closing above a moving average
- Exit rule: the exact condition that closes a winning trade, whether that’s a profit target, a trailing stop, or a shift in the trend
- Risk rule: the maximum amount at risk on the trade, set before you place it
- Review process: a regular check-in, weekly or monthly, to see whether the rules performed as expected
These four rules become the backbone of a futures trading plan you can return to before every trade, rather than a strategy you have to reinvent each time the market moves.
Using NinjaTrader’s Strategy Builder to automate rules without coding
NinjaTrader’s Strategy Builder walks you through building those rules using preset entry, exit, and risk conditions; no coding experience is required. After your rules are built, you can run them through backtesting against historical data to see how the strategy might have performed before you ever trade it live.
With entry, exit, and risk rules written down and built into a repeatable structure, the next step is deciding how much of your account each of those rules should risk.
Risk management and staying informed on current markets
Risk management for a beginner futures trader starts with position sizing and a stop-loss on every trade, defining the intended maximum loss before the trade is ever placed.
Our guide to risk management for futures trading covers additional tools like take-profit orders in more detail.
Position sizing and stop-losses for new traders
Position sizing is how many contracts you trade based on your account size and how much you’re willing to risk on a single trade. A stop-loss order closes your trade automatically once the market moves a set distance against you, capping the loss at a predefined level, though gaps and fast-moving markets can produce a fill worse than your stop price.
Setting your position size and stop-loss order before you enter a trade means you decide your intended maximum loss before you enter rather than in the moment—though a stop-loss is not a guaranteed fill price.
Following market analysis without information overload
Before risking real capital, new futures traders can practice a strategy in NinjaTrader’s trading simulator and follow daily market analysis on NinjaTrader Live.
Following one consistent source for daily analysis, rather than checking several different accounts and channels, can help you stay informed without letting market noise pull you away from your own rules.
Position sizing, stop-losses, and a manageable flow of daily analysis give a new trader guardrails without adding extra noise to the decision-making process.
Simulated trading is hypothetical and does not reflect actual trading or real-world results.
Practicing before you trade: testing your first strategy in a simulator
Before putting real capital behind a new strategy, most traders test it in a sim environment first.
A sim environment lets you place trades against real-time market data with no capital at risk, so you can see whether your entry, exit, and risk rules hold up in live conditions.
Many traders run a strategy in a sim environment for a set length of time before moving to a live account at a reduced size. That gives you a chance to see how your rules perform across different market conditions before more capital is involved.
Testing a strategy in a sim environment before trading it live gives you a way to see if your rules hold up before any real capital is on the line.
Ready to see how your own trading rules perform? Open a NinjaTrader account and put your strategy to work with real-time data and our free sim environment, with 14 days of live streaming market data included. Terms apply.
FAQs on futures trading strategies for beginners
What is the most beginner-friendly futures trading strategy?
A trend-following strategy is a beginner-friendly futures trading strategy because it works with the market’s existing direction rather than trying to predict a reversal. New traders can build trend-following rules around SMA or EMA crossovers and test them in a sim environment before trading live.
How much money do I need to start trading futures?
The amount varies by broker and by which futures contract you trade, since each contract has its own margin requirement. NinjaTrader has no deposit minimum* for opening a brokerage account, though your available capital should still be sized to the margin and risk of the contracts you plan to trade.
*ACH and debit card transfers carry a $5.00 minimum.
How do I manage risk as a new trader?
Risk management for a new futures trader starts before you place a trade: decide your position size and set a stop-loss order that defines your intended maximum loss, keeping in mind that a stop is not a guaranteed fill price. Add a review process to check whether those rules held up as your comfort level with the futures markets grows.
What is the difference between a trading strategy and a trading plan?
A trading strategy is the specific approach you use to find and enter trades, such as trend following. A futures trading plan is the more complete rule set built around that strategy, covering entry rules, exit rules, position sizing, and a review process you follow every time you trade.
Can I test a futures trading strategy without risking real money?
Yes. NinjaTrader’s sim environment lets you place trades against live market data with no capital at risk, so you can see how your entry, exit, and risk rules perform before you fund an account and trade live.
Simulated trading does not represent actual trading and is based on hypothetical conditions. Actual trading results may differ significantly due to factors such as market conditions, liquidity, execution, and the emotional and psychological impact of risking real money. Simulated trading is provided for educational and platform-familiarization purposes only and should not be relied upon as an indication or expectation of results in a live trading environment.
