Gift Day Trading – Tutorials and Brokers

What is the future?

A brief history

Before looking at how to get started with day trading options and index futures, it helps to understand our humble beginnings.

Futures contracts are some of the oldest derivative contracts. They were born out of the need for farmers to hedge against changes in crop prices and crop prices. That’s why many of the futures that are still traded today are livestock, such as livestock, and grains, such as wheat and corn.

Since then, futures markets have exploded, including contracts for asset markets. Precious metals such as gold, industrial metals such as aluminum, S & You can trade stocks and Treasuries such as P500.

Financial Derivatives

While the concept of a gift can be a bit confusing at first, it’s actually surprisingly simple.

Derivatives arise when a financial instrument derives its value from changes in the price of another financial instrument. For example, S & The value of derivatives linked to P 500 is simply S & It is a function of price change within P500.

S & The P500 is effectively a cash index and is compiled into contracts much like stocks. Futures contracts, like stocks, have prices that go up and down. In practice, futures charts probably look more like stock charts.

Advantages

If you are trading futures, an essential element is leverage. This means you don’t have to pay the entire contract when you start trading. Instead, enter a position by making a minimum upfront payment. Your initial margin will depend on the margin requirements of the asset and index you wish to trade.

Type

As a trader, it is important to know the nuances between different futures. For example, weekly trading futures and stocks are different. You are trading standardized contracts, not buying stocks. Each contract has a specified standard size set by the exchange on which the contract appears.

Let’s assume the contract size for aluminum futures is 50 troy ounces. One aluminum futures contract would have control of 50 ounces. If the price of aluminum moves by $2, you will see a profit of $100 ($2 x 50 ounces).

predicate

Here are two terms you may come across frequently.

First Notice Date

The first notice date (FND) of futures contracts comes after an investor who purchases a futures contract is required to physically deliver the contract’s underlying product. FND is subject to contract and exchange rules.

Most investors close their positions prior to the FND because they do not want to own the actual product.

Last Trading Day

For example, the last trading day for oil futures is the last day a futures contract can trade or close before an underlying asset or cash settlement is made. Generally, most futures result in cash settlement instead of delivery of physical goods. This is because most of the market is hedging or speculation.

For example, you need to account for the unpredictable price movements of the last trading day of crude oil futures or natural gas futures.

However, before you start trading, you need to know the asset you choose, as different futures come in varying quantities.

Best markets for day trading futures

We’ve covered some of the assets you can trade, but what other options are there and which markets offer the most potential for in-exchange trading days?

Many people like the E-mini S & I would argue that the P 500 is the place to go. With a margin of $3,500, you can trade approximately $75,000 worth of stock, making it accessible to all traders. E-mini S & P futures are all traded electronically, guaranteeing the fast running speed and promising possibilities of automated trading software.

Or consider E-mini Nasdaq futures, E-mini Russel futures and Dow futures. All offer ample opportunities for futures traders interested in the stock market.

On top of that, there are several other markets that provide the significant volume and volatility needed to generate daily returns. Soybeans, coffee, natural gas, Japanese yen, Euro FX, crude oil and 10-year T-notes are all worth looking at.

But before putting all your capital online, remember that each market has its own characteristics and requires careful analysis to find the one that suits your individual trading style and strategy.

Why trade futures?

With so many different tools, why should gifts pay attention? Here are 5 reasons:

1. low cost

The stock market requires significant initial capital, but futures do not. You can open an account and start trading with less than $5,000.

But the best part is, you don’t even have to keep that amount. It should be enough to cover the margins. Margins are usually around 3-9% of the total contract amount, so you really only need a balance of a few hundred dollars.

2. Moving futures to the underlying asset

With options you analyze the underlying asset but you can trade options. However, your profit or loss depends on how the option price changes. The underlying asset may move as expected, but option prices may still stall. However, futures move with the underlying asset.

This means you can apply technical analysis tools directly to the futures markets. You don’t have to worry about the complications of derivative pricing.

3. FINRA’s pattern day trading rules do not apply

You must keep at least $25,000 in your trading account if you meet the minimum requirements (use a margin account, trade the same security 4 or more times within 5 days), etc.

As a day trader, you need margin and leverage to profit from swings throughout the day. Thankfully, this rule doesn’t apply if it’s a trading day with futures. This provides access to a market of thousands who did not meet the stringent requirements set by FINRA.

4. No restrictions on short-distance sales

As a short term trader, you should only trade the best long or short. You can stay fair and respond to current market analysis with no restrictions on short and long positions.

On the other hand, the stock market does not allow this. Limited by the sortable stocks offered by brokers. You must borrow stock before you sell to make a profit. In fact, financial regulators enforce strict rules to prevent short selling in order to prevent a stock market crash.

5. Reliable volume data

Because there is no central erase, reliable volume data can be utilized. Due to the decentralized nature of forex trading, it is impossible to obtain reliable volume data from forex dealers, so no one has all the information. However, futures allow you to actually check out the players you are interested in, allowing for accurate technical analysis.

Cons

There are many reasons for day trading futures, but there are two serious drawbacks.

1. Fees

It is very easy to trade on the futures market. If you have too many marginal transactions, your commission fee can quickly increase. So you may have had many successful deals, but you may have paid a very high price.

If you have $25,000 in your account and one S& With a P E-Mini contract, you can pay fees ranging from $7,500-$12,500 annually. That means you need at least a 25% return to break. Therefore, a careful money management system is required. Otherwise, you may lose all your capital.

2. low capital

Trading psychology plays a huge role in making successful traders. But since you can start trading futures with minimal capital, the psychological pressure to overcome is much greater. Because you simply can’t afford to lose much. This pressure can lead to costly mistakes and can quickly see you pushed out of the trading floor.

How to start day trading futures

Weekly trading futures for beginners has never been easier. Technology has made acquiring brokers, accounts, trading tools and resources easier than ever. So how do you get involved in trading futures?

Minimum capital requirements

It is one of the most accessible markets because it requires less capital than stocks, but more than foreign exchange. There is no legal minimum, but each broker has a minimum minimum deposit requirement.

E-mini futures have particularly low trading margins. E-mini S & With P500 futures, you can find brokers that only offer $500. So you need $500, which should be enough to cover your position’s trading margin and price fluctuations.

Margin positions vary from broker to broker, but TD Ameritrade and NinjaTrader offer attractive margin trading.

Choose a broker

This is one of the most important investments you will ever make. Most intraday traders will want a discount broker that offers greater autonomy and lower fees. So what should you look for in a futures broker?

• Fees – Choose a broker with a competitive and transparent fee structure. If you trade frequently, your commission fees will build up quickly, so make sure you don’t include them in all your profits. It’s also worth noting whether there are additional costs such as withdrawals and penalty fees.
• Customer Support – If there is a problem, it needs to be addressed quickly. Every second can cost you money. So check their reviews to make sure they have reliable and fast customer service. Some brokers offer 24/7 support in multiple languages via phone and online chat. Additionally, they should be able to provide information on futures trading hours, including Presidents’ Day, as well as New Year’s Day and Labor Day futures trading hours.
• Trading software – how good is the trading platform? Do you provide all the charts and technical tools you need to do your analysis? Do I have to pay for extra features? Also, does the software allow fast launch speed and simple navigation?

You should do detailed research, reviews and feature comparisons before choosing a broker. For detailed instructions, see the broker page.

Picking a future

If you have entered into a contract with a broker and have cash in your account, you should choose a futures contract. When doing so, you need to consider several key factors including volume, margins and movement.

 

 

Volume

Look for contracts that usually trade 300,000 or more per day. Then you will know that you can buy and sell at any level you want, and there will probably be another trader who is buying and selling from you.

Some of the most traded futures contracts include:

• E-Mini S & P 500 (ES)
• Euro Dollar (GE)
• 10 Year Treasury
• Crude WTI (CL)

Once you have found a large amount of contracts, you should consider the margins and movements that suit your trading style.

Margins have already been covered. With margin trading, the amount your broker gives you determines how much you need to enter a position. Crude oil, for example, often requires high margins, so you need a larger account to trade.

Workout

Certain instruments are particularly volatile, so we revert to our previous example, oil. This means that price fluctuations must be taken into account.

Fortunately, you can set your moves based on two factors: the point value and the number of points your future contracts normally move per day. A simple average true range calculation provides the volatility information needed to enter a position.

To find a range, simply look at the difference between the current day’s high and low prices. Futures markets can have price gaps, but today’s price action is outside of yesterday’s price action. So, what do you do?

• Excellent – best today or close yesterday (whichever is greater)
• Low – low today or closed yesterday (whichever is lower)
• true range – true high to true low

Now, if the bond closes on day 90, the gap opens on day 91, and it hits the high of 92 tomorrow, you know the actual highs and lows.

• Best – 92
• Super Low – 90 (yesterday’s close, lower than today’s low)
• True Range – 92 – 90

You can now identify and measure price movements to indicate volatility and strengthen your trading decisions.

Use these elements

So if you understand the volume, volatility and fluctuations between future contracts, what should you choose?

E-Mini S & P 500 futures provide a good starting point for new day traders. You can get margins as low as $500, and you can get more than crude. It also has enough action to generate consistent profits, and you can start trading with as little as $3,000 in your account.

Crude oil is another worthy option. While it requires the most margin you also get the most volatility. If you are looking for the biggest gains, many people have found their wealth in the oil game. Conversely, large price movements have also seen many traders lose all their capital.

A final big tool worth considering is 10-year Treasury bond futures. S & Not as much as P500 futures, but you can get a lot of it. There are still price fluctuations, but they are less volatile than oil. A look at the 1-minute chart paints the clearest picture.

Strategies

All points and examples below apply if you are interested in weekly trading strategies for Emini futures or Dax futures.

Analysis

Once you’re set up and have the market in your crosshairs, you’ll need to use an effective strategy to make a profit. Whatever strategy you decide on, you should use fundamental analysis. Charts and patterns help you view historical data and predict future price movements.

However, an initial analysis helps identify factors affecting instrument performance. For example, if you want to trade futures on Treasuries, you want to analyze the fundamental factors that determine bond prices. You probably want to keep up with economic activity and policy, supply and demand, investor sentiment, and the latest news.

If you want to start trading wheat futures, you will want to look at other factors. You’ll want to look at the weather reports and find out details about crop yields, alternative grains, and shipping costs.

risks and examples

The best strategies consider the risks and avoid trying to make huge profits on minimal trades. An example of a tried and tested strategy is described below.

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Let’s say you have $8,000 in your trading account and you’re aiming for a 55% win rate. You are willing to risk only 1% of your capital. You can use stop loss for this. Place a stop-loss order 5 ticks from the entry price, targeting 9 ticks.

So your risk on the trade might be 5 ticks x $13.50 = $67.50, which is less than your $80 max risk. It should also be sufficient to pay for commissions. If you can make that reward for 55% of your trades, you will be left with significant monthly profits.

If you increase your risk to 2% (some traders do), you can trade two contracts and potentially double your profits. But if you do it wrong, you will pay a higher price.

Scaling

One of the best futures trading strategies is scalping, which many people use to reap handsome profits. The idea is to limit your losses to one or two ticks while taking profits almost immediately. You can also make quick profits on either side of the market by using the spread, which is the difference between your bid price. This makes scalping easy.

Scaling requires a high volume of trades, but having time can help you minimize your losses while maximizing your profits.

As you can see, futures have significant profit potential. However, weekly traded oil futures strategies may not be successful when used with Russell 2000 futures, for example. So the key is to be patient and find the right strategy that compliments your trading style and the market.

For detailed guidance on effective daily techniques, see our strategy page.

 

 

Tips

Numerous factors are required to achieve consistent gains. You need to invest time and money in finding the right broker and testing the best strategies. To make your learning process smoother, we’ve compiled some of our top trading gift tips.

• Always have a plan – you have to be well prepared. The trial and error approach will quickly bring your account balance to zero. So retest your strategy against the market until it turns into your own art form.
• Maintain discipline – Too many traders fail because they can’t control their emotions. If you’ve retested your plan, you know that it will succeed, so don’t give it fear or greed. Let math guide you and keep you disciplined.
• Watch out for margins – global futures trading margins can help you maximize your profits, but don’t go too deep. Minimize your risk, minimize your margin and don’t lose too much.
• Practice first – Whether your day-traded product is futures or index futures, a hands-on account is a fantastic place to familiarize yourself with the markets and develop your strategy. Plus, the futures trading simulator is virtual funded, so you don’t have to risk your real capital until you feel confident. See Demo Account page for details.
• News – Equipment prices may skyrocket or plummet in response to news announcements. Therefore, you should keep your ears to the ground for anything that might affect your position. Trusted sources include Yahoo Finance, CNBC, and Business Insider.

See the tips page for detailed instructions.

Education

The most successful traders never stop learning. Markets change and markets must change with them. To do that, you need to take advantage of our wealth of learning resources. So, if you’re thinking of day trading futures, consider the following.

• Books – Get detailed strategies by listening to stories and advice from some of the world’s most successful traders. Click here to find the best books on weekly trading futures.
• Blogs – Stay up to date on market trends as traders provide their perspective on online blogs. They are simply a fantastic place to get tips on great futures deals.
• Courses / Tutorials – Learn technical analysis and new strategies from successful traders. Also, you can often get advice on the best indicators for futures trading signals and chart setups.
• Videos – Weekly trading oil futures videos for example allow you to follow experts as they trade and collect useful tricks.
• Pdf – Ideal for disclosure during trades so you can get the right chart setup and apply your strategy in real time. For example, consider the David Bennett Day Trading Grain Futures PDF.
• Trading Room – The live futures trading day chat room is a great source of information. You can follow others as they trade while asking questions and taking advantage of our best tips. One of Google’s 5-day futures exchanges is worth a look.

Taxes

Whether you trade single stock futures or Vix futures on a daily basis, you must pay taxes. Not taking these responsibilities into account can drastically cut your day. See the Tax page for details.

Can you make money day trading futures?

yes you can But with a proven success rate in futures trading, it won’t be easy. First, you need to have enough initial capital so that your initial mistakes don’t put you out of the game. It also requires strong risk taking and an intelligent strategy.

You must also be willing to invest time and energy in learning and utilizing many of the resources described above. Doing all of this will give you a handful of gains. It’s entirely up to you.

Further reading