Futures Market

What is the Futures Market?
The Futures Market is made up of buyers and sellers of commodity/future contracts agreed to be settled on a later date.

What is a Futures Contract?

A futures contract is a contract between 2 parties in which an agreement between:

1. A short position which is the futures trader who agrees to deliver a commodity.

2. A long position which is the future trader who agrees to receive a commodity. 

What is the Relationship Between Stocks and Futures?

The Stock Market moves up or down when the futures market moves up and down because many futures contracts are related to stocks.

How Does a Day Trader Use the Futures and Futures?
If the futures suddenly turn down a day trader may see this as a negative omen and get out of a position. Especially if it suddenly goes down a lot. This signals time to get out of Long Positions and enter Short Positions.