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Basic principles of futures trading

Definition of Futures

Futures contracts are financial agreements that obligate the parties involved to buy or sell an underlying asset at a given price on a future date specified in advance.

Futures markets

Futures are traded on organized exchanges, such as stock or commodity exchanges, where the standard terms of each contract are established, including the underlying asset, contract size, expiration date and settlement method.


Leverage

Futures trading allows investors to trade with a relatively small initial capital compared to the total value of the contract, which means that they can control a significant amount of assets with a minimal investment.


Coverage

Futures are often used as a hedging instrument to protect against financial risks, such as market volatility or commodity price fluctuations.

Speculation

In addition to hedging, futures are also used by speculators seeking to profit from price fluctuations in the financial markets.


Liquidation

Futures contracts can be settled in two ways: by physical delivery of the underlying asset on the maturity date or by cash settlement, in which the difference between the purchase price and the sale price of the contract is exchanged.


Margin

Investors trading in the futures market are required to post an initial margin as collateral to cover potential losses. The margin is a portion of the total contract value and may vary depending on the underlying asset and market conditions.


Risks

Futures trading involves significant risks, including the possibility of substantial losses due to market volatility, leverage and unforeseen events that may affect the price of the underlying asset.

Research and analysis

Before trading in the futures market, it is important to conduct thorough research and perform technical and fundamental analysis to make informed decisions about which assets to trade and when to enter or exit a position.

Risk management

Proper risk management is critical in futures trading. This includes setting stop-loss limits, diversifying the investment portfolio and using stop-loss orders to limit losses in the event of adverse market movements.

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Pedro Orantes

Pedro Orantes, born in Guatemala, is a prominent trader who is passionate about sharing his knowledge and experiences with other market enthusiasts. At a very young age, Pedro discovered his interest in finance and investing money; inspired by the potential of financial markets to transform lives, he decided to channel his energy towards financial education and training new traders.

With a clear vision of the importance of education in successful trading, Pedro founded California Trading Academy, an innovative academy that combines traditional techniques with modern technological and psychological approaches.

As CEO of the academy, Pedro is committed to providing his students with the tools and knowledge necessary to achieve their financial goals. His student-centered approach and passion for teaching have led him to create innovative and customized training programs that are tailored to the individual needs of each student.

In addition to running the academy, Pedro continues to operate in the financial markets, applying his skills and knowledge in real time. With a promising future ahead of him, Pedro remains committed to his goal of transforming lives through the power of financial knowledge.

Sebastian Sanchez

Sebastian Sanchez is an experienced trader in the futures market, recognized for his mastery in the application of Psychotrading techniques to maximize his trades. During his early years, he experienced the typical ups and downs of the market, facing the uncertainty and emotional pressure that accompany the trading profession. However, instead of becoming discouraged, he immersed himself in the study of the psychology of human behavior and its application to trading.

Over time, Sebas developed a deep understanding of how emotions influence trading decisions and how mastering those decisions can lead to consistent success in the market. Integrating this perspective into his trading approach, he began to apply Psychotrading techniques, from emotional control to risk management and objective data-driven decision making.

His dedication and skills soon attracted the attention of the trading community. In addition to his activity as a trader, Sebas gives seminars and tutorials on Psychotrading, sharing his experience and helping other traders to overcome the psychological obstacles they face on their way to financial success.