Popularized by legendary futures trader George Lane, the stochastic oscillator (commonly called stochastics) is a timing indicator widely used by futures traders to indicate overbought or oversold positions. Stochastics compares closing price to price range over a specified time period. The driving principle can be summarized as follows: [Read more…]
Futures Trading Methods: Are You A Scalper Or Swing Trader?
December 8, 2007 By
Futures traders come in all flavors but it’s basically a Neapolitan world. You can be a scalper, swing trader or a combination trader. Mindset and methodology generally determine in which sector of the futures trading world you’ll thrive.
Scalpers. Scalpers seek immediate gratification. They look for short-term market movements seeking to shave money off the bid/ask price spread. Holding each position for only a very short period of time (often only minutes) to minimize risk, scalpers make small gains through rapid trading. [Read more…]
Futures Traders Must Juggle Multiple Variables
December 3, 2007 By
Futures contracts are complex financial instruments and trading them demands constant daily, even hourly, monitoring. When you trade futures, there are myriad shifting variables that must be monitored continuously. Trading futures is about minimizing risk and maximizing profits. Profits are often made on small price points in an interval of minutes. To make money, you have to be there, in the game, ready to grab an opportunity when it appears.
The Difference Between Futures And Commodities
November 29, 2007 By
We’ve spend some time lately talking about commodities. Anyone who trades futures on the commodity markets ought to know a considerable amount about what they’re trading. But commodities are not futures.
- Commodities are a class of assets that includes energy, metals, agricultural products, natural gas and oil, and other natural resources. Commodities are natural resources, actual physical objects with an inherent value of their own.
- Futures are investment vehicles through which you invest in commodities. Futures can also be used to invest in other asset classes such as currencies, bonds, interest rates, stocks, indexes, etc. Futures have no value in and of themselves. They are known as derivatives because they derive (or take) their value from the underlying financial instrument (i.e., the commodity, currency, stock, etc.)
