Are you looking to get into futures trading but need help knowing where to start? Singapore is a great place to begin.

In this article, we will explore six different strategies you can use to trade futures. Each of these strategies has advantages and disadvantages, so it’s essential to research before deciding which is suitable for you.

You can also visit https://www.home.saxo/en-sg/products/futures for more information on futures trading in Singapore.

What futures trading is and how it works

Futures trading is a type of financial trading in which investors buy and sell contracts for assets that will be delivered at some point in the future. It can include commodities like oil, gold, and silver stocks, bonds, and currencies.

When you invest in futures contracts, you agree with another investor to purchase or sell an asset at a specific price on a certain date. Because of this, it’s essential to carefully research the market trends and ensure that you understand how each contract works before investing your money.

The six different strategies that can be used for futures trading

While futures trading may seem complicated at first glance, traders use several strategies to help them navigate the ever-changing markets. These strategies draw upon various methods of analysis, including technical and fundamental analysis, to help traders make informed decisions about where the market is heading.

Some of the most popular strategies in futures trading include trend following, calendar spread trading, iron condor trading, options buying and writing, momentum investing, and relative value investing. Let’s take a closer look at each of these strategies below.

Trend following: As its name suggests, trend following is a strategy that relies on identifying trends in the market and then taking advantage of them by buying or selling assets accordingly. It can involve using chart patterns such as triangles or flags to identify potential entry points for investments.

Calendar spread trading: Calendar spreads are a type of options trading strategy that involves purchasing and selling options with different expiration dates. It allows investors to profit from market trends in both rising and falling markets.

Iron condor trading: Iron condor trading is a popular option strategy that can be used in both bull and bear markets to generate profits while limiting the risk of significant losses. It involves buying low-risk, high-reward put options while simultaneously selling higher-risk, lower-reward call options at the same strike price.

Options buying and writing: Options buying and writing is another common strategy used in futures trading. This strategy involves purchasing or writing one call or put option for every 100 shares of the underlying asset you are investing in.

Momentum investing: Momentum investing is a strategy used to predict short-term price movements in the market based on past trends or patterns. This strategy can benefit those who are just starting with futures trading and want to take a more aggressive approach.

Relative value investing: Relative value investing is a strategy focused on identifying undervalued assets that offer higher potential returns in the long term. By studying historical price trends, investors can assess different assets relative to one another and then buy or sell investments accordingly to generate long-term profits.

The benefits of futures trading in Singapore

As one of the leading financial centres in Asia, Singapore is a prime location for futures trading. Whether new to investing or an experienced trader, many benefits come with trading in this vibrant market.

Some key advantages of futures trading in Singapore include access to a wide range of assets, low transaction costs and fees, a sophisticated regulatory environment, and favourable economic conditions that support growth and development. With these benefits and more at your fingertips, it’s no wonder many investors choose to trade in the Singaporean market.

Conclusion

Whether you are a new trader just starting in the world of futures trading, or an experienced investor looking for more advanced strategies to help maximize your returns, Singapore has many options. By learning about the different trading strategies and tools available in this market, you can make informed investment decisions that will help you achieve success over time.