Tag Archives: Adventure

Futures Trading – Profitable Endeavor Or Perilous Adventure?

Futures trading is one area of investing that can be downright intimidating to even seasoned investors. Littered with wonkish jargon and trading strategies that many stock and mutual fund investors may not be familiar with, it can scare off many investors before they even give it a try. All that said, futures trading does have one distinct advantage over trading other asset classes: The potential for big gains that can be accumulated in short time frame. Of course, those big gains depend on your system, strategies and a host of other factors, but we’ll address those factors later on in this piece.

Choices Aplenty In The World Of Futures Trading

Trading futures is similar to options in that futures markets give traders exposure to a broad swath of asset classes and that is another advantage of futures as an asset class. Want to trade commodities such as oil, gold and soybeans? Futures trading has you covered. Want to make a bet on the direction of a particular forex pair? Again, there’s a place for you in futures trading. It can also give investors exposure to indexes such as the Dow, Nasdaq and S&P 500 along with single-stock futures. And don’t fret if bonds are your cup of tea. There is a futures market for select US Treasuries as well.

As you can see, futures are far from limiting in terms of choices. Versatility is important in trading and trading futures can give you the versatility your trading returns may be needing.

Loving Leverage In The World Of Futures

You’ve probably heard the word leverage tossed around a lot by financial commentators and pundits in the wake of the financial calamity that enveloped many markets across the globe during 2008. Leverage became a dirty, four-letter word and the mismanagement of leverage was attributed to the downfall of several large financial institutions.

In the world of futures, consider leverage both a pro and a con. For the purposes of introducing you to futures trading, consider leverage as the market’s way of making your dollars go further. Let’s use gold futures to illustrate our point.

In a traditional gold futures contract that trades on the Chicago Board of Trade (CBOT), the investor must purchase 100 troy ounces of gold (the measurement of gold in financial markets) at 10 cents an ounce. And let’s assume that gold is trading for $1,000 per troy ounce. That means in a traditional gold contract, the investors exposure is $100,000! (100 x $1000/oz. = $100,000). You certainly won’t pay $100,000 for the contract, but your dollars are stretched a long way by the use of leverage in the futures world.

Now the flip side of this coin is that while you could possibly make $100,000 on a single trade if all goes right, the chance exists that if you don’t have stop losses in place, you could also lose $100,000, likely far more than your initial capital investment. And losing more than your initial investment is one of the rubs of trading futures.

Don’t Fret: There’s A Cheaper Way To Trade Futures

While that gold example may seem a little daunting, there is a way to get involved with futures without risking your entire nest egg. As this type trading has increased in popularity and more investors have wanted to get involved without investing five and six figures, E-mini futures have become more accessible to retail investors.

The advantage of trading E-mini futures, especially for new futures traders, is clear. Let’s use the gold example again. The mini-gold contract traded on the CBOT gives the investor control of just 33.2 troy ounces, making the cost of the contract $3.32 instead of $10 and significantly lowering the investor’s exposure.

Margin requirements are also lower with E-mini contracts. Your broker may require $5,000 in margin for a standard S&P 500 contract. If that’s the case, you can reasonably expect the required margin for the S&P 500 mini will be about $2,500. Advantage: Less risk, less capital required.

There are some drawbacks of trading E-minis though. Obviously, since you’re risking less money, your profit potential is diminished as well. There are also fewer trading options available to E-mini traders. For example, there is no mini contract for lean hogs. The E-mini futures market is also not as liquid as the traditional futures market and this can mean that there may not be a buyer around when you want to exit your position.

Futures Trading: More Pros Than Cons

At the end of the day, futures trading is a great avenue for investors seeking to magnify their returns. That’s not up for debate. Yes, futures trading has its risks, but what asset class doesn’t? Take the time to test your strategies on a demo account and understand how to properly manage leverage. That advice can put you on your way to harnessing the profit power of futures trading.

Adventure Travel – New Jersey

New Jersey is one of the most under rated adventure travel destinations. The area offers looks at delicate environments, historic sites, the sound of the surf and wildlife not to be missed.

Along the New Jersey Shore Cape May will take you back to victorian times with buildings from the 1600’s. If you hang out along main street it is a bit too touristy. So take a walk along the back roads to get a feel for the area to take you back to a simpler time.

The beach here is clean and a walk along the ocean or a day of playing in the surf can sooth your spirit. Travel inland just a short distance and visit the winery in the area and sample the grapes in the area.

The Maritime Forest once ran all along the Atlantic Ocean. Some of the last remaining stands of the forest can be found at Barnegat Lighthouse State Park. This area is an important feeding site for migratory birds. You can hike a short trail not even a quarter of a mile and view the birds, box turtles and deer that inhabit the forest.

The New Jersey leg of the Appalachian Trail is one that can take you into the wilderness and through either rough or not so rough terrain. Picking rough terrain usually will get you away from most people and for the adventure traveler it can raise your adventure level.

Beaver Pond Trail is strewn with lava rocks from a volcano that has been dormant for many years. This is bear country and there are scars on the trees giving proof as you hike along. The hike will take you across High Point Mountain giving you views to the Atlantic Ocean. Traveling through wetlands and at the end of the trail you will find the beavers engineering masterpiece the pond.

High Point State Park Monument Trail offers a less taxing hike, for 3 miles you will travel through the forest, see lots of mushrooms, and enjoy the feeling of being in a magical place. Following the trail to the end you will get a view of the Delaware River flowing to the Atlantic Ocean.

Saw Mill Lake is a great place to set up your home base while staying close to the Jersey Shore. Waking everyday in the woods the lake is man made but looks like a natural lake surrounded by the woods.

Leave the city noise and enter New Jersey backwoods and let your adventure begin.