Practice makes perfect, my mother used to say. It’s as true of futures trading as of anything else. Before you put your hard-earned cash on the line, you need to practice trading if you want to succeed as a futures trader.
Making practice trades allows you to: (more…)
Futures traders use two types of stop losses when they trade: mental stops and physical stops. It’s important to understand the difference between the two and figure out how and when to use them. The purpose of a stop loss is to limit your trade losses. When traders set a stop loss, they are determining the specific price at which they will sell to limit their loss — in other words, their exit strategy. (more…)
Last time we talked about how to evaluate the effectiveness of a futures trading system. But how do you build a solid trading system? Just like anything else:
Show me the money! In a nutshell that’s the goal of futures trading: to make money. Charts track money. They peel away the rumors and the news reports, the CEO’s prognostications and your neighbor’s hot tip. They show us what master day trader Oliver Velez terms the footprints of money (ref. Tools and Tactics for the Master Day Trader by Oliver Velez and Greg Capra). (more…)
You’ve heard the maxim: A win is not always a win and a loss is not always a loss. It’s true in many aspects of life and particularly in futures trading. Making a profit does not always indicate a correct trade. Likewise, losing money does not always indicate a wrong trade. What is essential for futures traders to realize is that the inherent rightness or wrongness of your trading method can not be determined by the outcome of any one single trade. Those who incessantly tinker around with their system, trying to fine tune it to perfection after every trade, are doomed. Those who jump from system to system, searching for that elusive perfect system, are doomed. (more…)
Futures traders make their money betting on the direction of the market. The market can only do two things; reverse or continue the trend. In short term day trading, the trend is not always your friend! On a normal day, the e-Mini S&P market fluctuates and reverses as much as 40 points. Catching these turns and continuation moves is the goal of futures day traders. (more…)
Many traders new to futures trading make the mistake of thinking in terms of stocks. Futures trading is concerned not with individual stock performance but with the macro logic of the market. Futures traders watch the indexes, not the stocks. Remember, the market is always seeking equilibrium, constantly oscillating between previous highs and lows. Futures traders use support and resistance to gauge the range of the day and locate potential market turning points. Learn to successfully and consistently locate these turning points and the spread becomes your playground — and cash cow! (more…)
Curious about futures trading? Want to see how we pros do it? I have prepared a short video that takes you through the start of a typical market day. Click here to watch the action. (more…)
With the right tools futures trading can be as easy as 1-2-3. Successful trading is 90% mental, 90% money management and 10% signals. So do you need to be a superman to become a successful trader? No, it only seems that way!
You do have to hone your skills, learn your trading system inside and out, develop a money management plan that works for you, and learn to read market signals. And you have to practice, practice, practice to develop confidence in your system and your abilities. Futures trading is not for the faint of heart. It’s a risky business that attracts the world’s best and brightest. A game of skill, futures trading is equally a battle of sharp wits and killer instincts. Develop yours and the world is your oyster! (more…)
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