Futures trading and spot trading

1 The direct objects of buying and selling are different. The direct object of spot trading is the commodity itself, with samples, physical objects, and pricing based on the goods. The direct object of futures trading is futures contracts, which is how many hands or futures contracts to buy or sell.

2 The purpose of the transaction is different. Spot trading is a transaction of first-hand money and goods. Obtaining or transferring the ownership of goods immediately or within a certain period of time is a direct means to meet the needs of buyers and sellers. The purpose of futures trading is generally not to obtain physical objects upon maturity. The purpose of the hedger is to transfer the price risk of the spot market through futures trading, and the purpose of the investor is to obtain risk profits from price fluctuations in the futures market.

3 The transaction methods are different. Spot transactions are generally one-on-one negotiations to sign a contract, and the specific content is agreed upon by both parties. If the contract cannot be honored after signing, legal action will be taken. Futures trading is conducted in an open and fair competitive manner. Negotiating one-on-one deals, or private hedging, is illegal.

4 The trading venues are different. Spot transactions are generally not restricted by transaction time, location, or objects. Transactions are flexible, convenient, and highly random. You can trade with opponents at any place. Futures trading must be conducted openly and centrally within the exchange in accordance with regulations and cannot be traded over-the-counter.

The product range is different. The varieties of spot trading are all commodities that enter circulation, while the varieties of futures trading are limited. Mainly agricultural products, petroleum, metal commodities and some primary raw materials and financial products.

5 The settlement methods are different. Spot transactions are cash on delivery, no matter how long it takes, they are settled once or several times. Futures trading implements a daily debt-free settlement system, and profits and losses must be settled daily. The settlement price is calculated based on the weighted average of transaction prices.

In this business, novices must learn to analyze trends. This investment is nothing more than buying and selling. For people who don’t understand anything, the probability of buying the right one is 50%. Investment is not gambling. With the mentality of gambling, no matter how much you make in the past, you will lose money in the end. Therefore, investment is a long-term financial management process. We All we can do is try to increase the probability of being right and maximize profits. Then this involves accurate judgment and grasp of the market.

There are many indicators that fluctuate in the market. Many people ask me which indicator is the most useful. In fact, every indicator is useful. It can be invented and widely circulated. They are all very classic indicators. Then the focus is on which indicator is suitable for you. Let’s talk about my personal tape-reading habits (my accuracy rate is 70%-75%, if you don’t believe me, you can confront me).

First of all, let’s talk about the main chart indicators. My personal habit is to look at the Bollinger Bands. The Bollinger Bands have three lines, the upper track, the lower track and the middle track. The three lines constitute the upward channel, the downward channel and the oscillating market. Secondly, the author is accustomed to looking at macd for the indicators in the attached chart, and judging the upward and downward momentum through the golden cross and dead cross of macd and the heavy volume near the 0 axis. Then there are some forms to help with analysis, such as head and shoulders bottom, head and shoulders top, M form, W form, etc. In addition, I personally recommend not to look at too many indicators, as too many indicators will conflict with each other. I just made it by hand, I hope it helps you and I hope you will adopt it.

Thank you