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How to create a trading strategy for futures in Australia

Anyone looking to trade futures in Australia will first need to understand the different types of trading strategies that are available. This article will provide an overview of common strategies that can be used when trading futures in Australia. Additionally, we’ll provide tips on creating your trading strategy for futures in Australia. Trading futures can be lucrative, but it is vital to approach this type of investment with a solid plan and risk management strategy.

What are futures contracts, and how do they work?

Futures contracts are a type of financial instrument that allows two parties to agree to buy or sell an asset at a predetermined price and date in the future. These contracts hedge against potential risks, such as currency fluctuations, commodity prices, and other market volatility. In Australia, futures contracts can be traded on the Australian Securities Exchange (ASX).

The benefits of trading futures contracts

Futures contracts can offer many benefits to traders:

  1. They provide access to leverage which can help to maximise potential returns on investment.
  2. By minimising the risk associated with price movements, futures contracts can protect against losses due to unfavourable market conditions.
  3. These financial instruments provide increased liquidity and transparency compared to other investments.

Common trading strategies for futures in Australia

Numerous approaches can be used when trading futures in Australia. Some of the most common include:

Long/Short Strategy: This strategy involves taking long positions (buying) or short positions (selling) based on whether the asset’s price is expected to rise or fall.

Trend Trading: This strategy involves trading with the market trend by buying when the price rises and selling when it falls.

Momentum Trading: This strategy takes advantage of any momentum in the asset’s price movement. If a stock has spiked or dropped significantly, traders may capitalise on this momentum by making quick trades.

Scalping: This strategy involves making numerous small profits from tiny fluctuations in an asset’s price over a short period.

Range Trading: This strategy involves identifying ranges in which an asset typically fluctuates and then buying or selling once it reaches either end of that range.

Contrarian Trading: This strategy revolves around deviating from the crowd and betting against the majority.

How to create your trading strategy for futures in Australia

Creating an effective trading strategy for futures in Australia requires knowledge of the markets, risk management and discipline. Here are some tips on how to create your own:

Research Markets: Before you begin trading in any market, you must understand it thoroughly. It includes researching prices, trends and news related to different assets.

Set Goals: Knowing what you want to achieve with your trades will help guide your decisions. Set realistic goals and make sure that you stick to them.

Test Strategies: Try different strategies on a demo account before risking real money. It allows you to familiarise yourself with the markets and make mistakes without losing capital.

Risk Management: Make sure you know the risks associated with trading futures and limit your exposure to them. Set stop losses and make use of leverage appropriately.

The importance of risk management when trading futures

Risk management is a crucial part of trading futures in Australia. You need to understand the risks associated with each trade and plan accordingly to limit your exposure. Make sure you set stop losses and use leverage wisely, as these can help protect your capital if the markets move against you. Additionally, invest only what you are willing to lose.


Trading futures in Australia can be a lucrative venture if done correctly. To increase the chances of success, it is vital to have a well-thought-out strategy and risk management plan in place. Additionally, staying informed on market developments and utilising resources such as trading bots can also help improve your trading performance. With patience and discipline, you can create an effective trading strategy for futures in Australia that works best for you. A reputable broker such as Saxo Bank is a good choice for trading futures in Australia. These online platforms can offer a wide range of markets, low fees, and advanced technology to help you succeed.



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