Day Trading Futures Tips

How To Day Trade Futures Markets

If you’re ready to start earning a living rather than just earning a paycheck, you can make a lot of money trading the futures market. A futures contract is an agreement between two separate entities on the future price of an asset. Whereas day trading stocks requires a trading account of at least $25,000, many brokers allow you to trade futures with only a $500 account.

Other advantages of trading the futures market are that it is highly liquid, meaning you can get in and out of trades quickly, and that they are traded electronically, meaning you can trade from the comfort of your own living room. We’ll talk about the various futures contracts that are best for trading, and we’ll also go into a couple of trades to get your started making real money in the shortest amount of time.

As stated earlier, the futures market is highly liquid, so traders trading both small and large contract size can enter and exit the market easily, with little to no slippage. The four most popular futures to trade are the S&P E-mini (ES), the Nasdaq E-mini (NQ), the Dow (YM) and the Russell (TF).

Both the ES and the NQ are traded electronically on the Globex electronic trading system. The S&P Emini (which we’ll refer to hereon as the ES) is the largest traded futures market among these four and hence the most liquid. ES trades in tick increments of 0.25, with a dollar equivalent of $12.50. 4 ticks make a point, so a point in the ES is worth $50.

The NQ’s are based on the Nasdaq 100 stock index, and also trade in tick increments of 0.25. The dollar equivalent of a NQ tick is $5, so that a point in the NQ is worth $20.

The Dow, or YM, is based on the Dow Jones Stock Market Index, and is traded through the Chicago Board of Trade, or CBOT. YM trades in tick increments of 1 point each, with a tick/point worth $1.

The Russell, or TF, is based on the Russell 2000, and is traded on the Intercontinental Exchange, or ICE. It trades in tick increments of 0.1, with a dollar equivalent of $10. As 10 ticks make up a point, a point on the TF is worth $100.

See the table below for a summary of these four futures contracts.

Futures Contract	Abbreviation	Exchange	Tick Increment	$/Tick	Ticks/Point	$/Point
S&P 500	ES	Globex	0.25	$12.50	4	$50.00
Nasdaq 100	NQ	Globex	0.25	$5.00	4	$20.00
Dow	YM	CBOT	1 point	$1.00	1	$1.00
Russell	TF	ICE	0.1	$10.00	10	$100.00

The key to successfully day trading in the futures market is to develop one highly probable trade and use it over and over again, with larger and larger contract sizes as your trading account grows. Here are two trades with which to begin building your trading arsenal.

Trading the Gap

A gap in the market is a difference in price between one day’s close and the next day’s open. Traders know that all gaps fill, eventually. One popular trade is to trade this gap fill. This is one way to do it. Open up a 5 minute candlestick chart. If there is a difference between yesterday’s close and today’s open that is large enough from which to pull profit, place a limit order to trade the break of the first 5 minute bar in the direction of the gap fill. Your stop would be placed a tick or two above the first 5 minute bar.

If the second bar does not break in the direction of the gap, you can trail your entry to the break of the second bar or third bar in the gap’s direction. Don’t do this past the third bar, because you may be fighting a developing trend day. Your target is gap fill, in other words, yesterday’s close, though some people take profit off at half-gap as well.

Make sure you have more ticks to gain from the gap fill than you have to lose from the stop. If the stop is too large, skip the trade.

Early Morning Breakout

Also use a 5 minute chart for this trade. Wait for the market to put in its first half hour of trading. Mark the high and low of the first half hour. Trade the breakout to either the upside or downside of this first half-hour channel. Take profit at +1, +2 points, and so on. Exit the trade if the market returns to the original 30 minute range.

As you can see, there are many ways to pull money from the market as a day trader. Trading futures is an excellent choice for day traders because of their small account requirement and their liquidity. Choose among the four most popular ES, NQ, YM and TF markets, and practice these two trades using a free trading simulator before you put your own money on the line.

Collar Strategy Can Protect Your Stocks

Hoping and praying that the stocks that you just bought will go up is not the best strategy to use, however it is the one very often used by the average Joe stock trader who is using simple trading indicators. The only salvation they have is that in bull markets most stocks will go up.

Statistics show that in a bull market about 75% of the stocks will follow the general trend and go up, and in a bear market 75% will also go down. Trading with the trend is the best way to trade as 9 out of 12 stocks will follow the trend and give you the best chance of making gains on your stock purchases.

But what if you own some nice stocks and don’t want to sell when the market is clearly going down, or about to go down?. There are a few tactics that you can consider, both of which involve the use of options, CALL options and PUT options. There is the well known strategy called Covered Calls, and the much lesser known one called the Married Put.

If you are going to trade options it is important that before you start trading you get the best option trading education that you can. You should also practice stock trading until you are comfortable with the process. This is a very important point that must be taken seriously, if you don’t understand the terminology and theory then you should not be trading options. If Put option, Call option, Married Put and Covered Call are new to you then don’t trade until you have studied sufficiently.

Selling calls against your stock in 100 share increments is the basis of the covered call strategy and it can provide about a 2-7% buffer against the loss in stock price. However a bigger drop in the stock price will not be compensated for using the covered call strategy, in general.

Stocks in a bear market, and even in a bull market, can drop quickly on news or earnings releases, as much as 15 to 45% within a month. Using covered calls to protect your stocks will only provide limited protection of less than 7% at best and so will not save you if the stock takes a 40% tumble.

The better solution to providing downside stock protection is the option strategy called the Married Put. As the name suggests the PUT that you buy is used to provide protection when the stock goes down because Put options increase in value when the stock decreases in value. The term married is used because the option that is selected has to be very compatible with the stock, in other words a good match, if the strategy is to work.

The selection of the best Put option is not straight forward and involves several criteria which are listed below:

1. The strike price of the option

2. The current share price

3. Choice of options, in or out of the money

4. Put expiration time

Even though the married Put protection only has a short life span if offers much more protection than the covered call. It can provide as much as 95% loss recovery in the event of a significant drop in the stock price.

The downside of the good protection is that you have buy the Put which is a cash debit whereas the covered call is a credit. But there are ways of off-setting this expense and there is much more to this strategy when executed correctly. The Married Put can be made to just about pay for itself and used to generate very good gains if the market, or stock to be specific, moves a lot.

The general idea of the Collar Trade is to combine the covered call and married Put strategy into one, this is what is called the Collar Trade. In effect you put a collar around the stock, sell a call and buy a PUT. If you do this correctly most of the cost of the Put can be offset by the credit from the covered call so you can protect your stock at almost no cost. Yes this is a great strategy which the general public is unfortunately ignorant of, and most brokers don’t understand.

The strategy that I have outlined above is unknown to the average stock market trader but is one of the best trading systems you could have.

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Emini Day Trading for a Living

Learn to daytrade the eminis using David Marsh’s The Tick Trader®, to earn 1 point day trading the S&P 500 and Dow E mini Futures Markets.

Marsh’s company, E-mini Trading Strategies offers a 30 Day Double-Your-Money-Back-Guarantee which states The Tick Trader Method will achieve a minimum of 1 point a day.

If you are or haven been interested in day trading and the possibility of trading for a living, take the time to research this course. David Marsh makes himself availabe to speak with potential students, so ask as many questions as you like.

Visit his website and read everything especially his daily blog in which he recaps every single trading day. It will also give you insight into the type of person that he is.

His emini trading strategies are not difficult to learn.Day trading is not for everybody and you must have the discipline to follow the rules. The eminis can be traded from home or anywhere that you have a computer and high speed internet connection.

If you have a basic understanding of the futures market and trading, you can begin trading this method in less than a single day.

You should have a basic understanding of charts, technical indicators, and order placement. You should have a decent knowledge of the markets before taking the course.

If you do not he does offer a Beginner’s Course.

The system’s goal is to make a one point profit each day. A daily income is the goal.This is a consistent and conservative approach to earn daily income.

The system trades the same way each and every day, and it is usually done for the day early in the morning. The rest of the time is yours to do as you please.

Most people work 40 or more hours at a job or business and have very little time for themselves and family. It simply does not have to be that way

It is possible to spend 30 to 90 minutes a day trading the e-mini markets to earn your living. Day trading is a wonderful way of life.

This trainingcourse offers you the opportunity.

Top Suggestions To Learn Day Trading

Anybody who wants to learn day trading wishes to follow certain guidelines. I won’t say rules because a lot of people don’t like the word, but principles. A number of them are quite well known and a few of them are less so, but they are all vital to the successful day trader. The Forex Rebellion defines them as the four major guidelines trading.

1. The Buck Stops With You

Whether you are looking round for a day trading programme or developing your own, remember that whatever you do is your responsibility. Ask for recommendation and help by all means, but don’t believe everything you hear. People are different and their trading styles can alter very, so never follow advice blindly.

Equally, you can buy in a system but do not neglect to test it. Whether or not the guy who designed it asserts that it’ll double your money in 2 months for certain sure, you must test, because there are three possible Problems with that. One, he might be lying. Two, perhaps it used to work great but it doesn’t work any more. Three, perhaps it works for him but for some unusual reason to do with your spread or whatever, it doesn’t work for you. Your cash is your responsibility and yours alone, so put the system to work on a demo account until you are sure.

2. Be Calm

The most important enemy of any trader is their own feelings and this is especially true for the individual that wants to learn day trading. If you are the sort of person who makes bad choices under stress, you might want to think again about choosing day trading as your system. This is a fast moving world where seconds can count in thousands of bucks, so you must keep a particularly cool head.

Now just about everyone likes to think they seem to be a calm sort of person who would react way below pressure, so even if you are convinced you are going to be the planet’s number one ice cold trader, test yourself as well as your system in that demo account. If you curve off the system even once or start changing your position size, closing out early, waiting too long etc in demo mode, sorry but you aren’t prepared for real life trading when things will be much more hairy. Keep working on it.

3. Track Everything

Even though you have got to work fast when you’re using day trading systems , it is worth making the effort to scribble everything down. This is a skill you can train yourself of while in demo. You’ll be dazzled how much it helps you to understand why things went wrong or right when they did. This can enable to to tweak a marginal system into a profitable one and make all the difference to your bottom line. A simple spreadsheet recording your position, the signal(s) and the opening and closing costs is sufficient during trading. Afterward you may need to add a comment.

4. If You Doubt, Stay Away

This is a widely known trading and investment rule. Don’t take a chance on something that nearly fits your system but not really. It may work once but over the long term this may lead to disaster. There is probably a reason why the system is set up for the signals that it has and if the market does not fit, do not force it.

Equally if you’re sick or under stress about another area of your life, it can be better to keep away from the market, particularly while you’re still a relative beginner. There will be other and better opportunities to learn day trading when you are feeling in top condition.

Moving Average Secrets

One of the most popular technical analysis indicators is the simple moving average also known as SMA, if you learn how to use these correctly they can be a very useful tool to help you to make good trading decisions.

The 50 simple moving average, or 50 SMA, is simply the sum of the last 50 values for each period, divided by 50, this is a moving window, as time moves on so does the average. Notice that I used the term period because this indicator works on any time period in exactly the same way.

It can be used on monthly, weekly, daily, hourly, 30 minutes, 15 minute and on whatever time period you want to monitor and trade. Although the SMA is the most commonly used there is also the exponential moving average or EMA. This is a weighted version of the formula using the mathematical exponent function to give more weight to the more recent values, this has the effect of making it a slightly faster average that many traders prefer.

The truth is that it probably does not matter if you used the SMA or the EMA, what does matter however is that you use one or the other and then be very consistent with it. Do not switch between them, it is more important that you learn to trust your chosen indicator then a slight difference in its value.

The simple moving average is primarily used to determine what the current trend of the stock is, depending on the value used it could be a short term, medium term or long term trend. An important point to note is that moving averages are really only useful when the stock is trending, if the moving average is flat, i.e. horizontal on your chart it can become very choppy, this is a good time to not trade.

The general rule is that if the current price is above the SMA the trend is up, if below the trend is down. This is very important to understand because it forms the basics of trend trading and trading with the trend.

For the short term trend many traders like using a 5-8 SMA or EMA, here is a trading secret, never trade again the direction of the short term tend, actually this is really just common sense when you think about it.

Moving averages often act as support or resistance, many traders use the 15, 21 or 30 SMA for this purpose.

There are a number of other very important moving averages that you need to know about, these are the 50, 100 and 200 SMA, and this mainly applies to the daily and weekly charts. A lot of big players in the markets, the mutual funds, investment banks etc use the 50 and 200 SMA as support and resistance, if they decide to buy or sell based on these you need to follow suite, the 100 to a lesser extent. These are very useful averages to watch if you trade EFT’s like an Oil ETF.

A useful tip is that when a stock breaks through one moving average it will often move all the way to the next, for example, if a stock breaks the 30 SMA it may move to the 50 before finding some support or resistance.

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How To Trade Options Correctly

There is a lot of hype surrounding options trading, and for good reason, it’s a good way make a lot of cash fast, or can be used to grow your capital consistently month after month.

There’s also a lot of hype about how complicated it is and why you need to spend thousands of dollars on options trading education before you get started. Needless to say this last statement usually comes from trading seminar companies trying to sell your their trading course on options.

Lets cover a few of the basics about options and set you straight about a few important points. Firstly yes it is true that you can make a lot of cash trading options, but of course you can also lose just as fast.

When trading stocks your leverage is 1:1, if you go on margin you can get get 1:2 leverage, but thats about it. With options it is not as straight forward to calculate the leverage but generally speaking you can get between 1:5 and 1:10 when you buy an option on a stock, or ETF.

So with 1:10 leverage, when the stock increases by 5% your option can increase by approx 50%, and this can happen in just a few days, this is why swing trading strategies using options on stocks is so popular.

However the downside is that a big loss can also happen, if the stock drops by 5% your option can also drop by 50%, at which point you may want to close the trade and save some of your option value, it really depends on what your stop loss and risk.

What I’ve just described is called directional option trading where you are betting on the getting the direction of the stock movement correct, this is highly speculative. Options can also be used in option strategies which are much more non-directional, such as covered call trades, credit spreads and Iron Condors. In these trades there is much less dependance on getting the stock direction correct, but it still matters.

So should you learn to trade options?, in my opinion you should not do directional option trades until you become an expert stock trader 1st. This is because you really need to be very precise with your entry and exit strategy and trading plan, and be very good at technical analysis.

Whereas if you want to do non-directional option trades you don’t need to be such an experianced stock trader to be successful, but of course it does not hurt either.

Learning how to trade options is a very useful skill you have, but don’t rush into it and blow out your account. Make sure that you get a good options trading education before you start, and also make sure that you have a very solid stock trading education as well, such one from Top Dog Trading Review.

The markets are meant to be traded

Investors who know what they are doing are always looking for ways to make money. For all purposes, it is an American institution. But there’s a reason why they call it a scheme, which typically means a devious or secret plan of action. Most schemes that promise to make you millions by day trading, are about as likely as winning in roulette. Yes, it is true that most day trading systems are little more that informed gambling, but they are gambling all the same. If you think about it, day trading is gambling, you are betting you are fast enough to enter and exit in a very short period of time and escape with a profit.

What will it take to make a good day trade? To begin with, you need to understand that there is no such thing as easy money. You should never go into a day trade thinking that you are going to make a million. Day trading is all about making small profits several times a day which eventually add up. An experienced day trader will not risk too much on any one day trade. Instead, they buy small numbers of shares of companies that they’re familiar with.

How do day traders know which stocks to trade? Most traders will select stocks that they have been following for quite some time. Having analyzed and monitored the numbers over a few a weeks a trader gets convinced to trade a stock.

Though there are a number of different strategies that day traders employ, most day trading strategies rely heavily on technical analysis. Technical stock analysis means that traders believe that he can detect patterns in the way a stock trades by looking at charts. For example, a trader may discover that a certain stock tends to move in a tight trading range most days. This may mean that a stock moves only two or three points every day. For example, one day it can open at 33, move to 36, then fall to 34. It is the job of the day trader to keep tabs on these trades and see if he can discern a predictable pattern in these daily movements.Learning to watch and pay attention to these types of regular volatility patterns will really pay off in the long term for anyone looking to day trade.The real key is to try to concentrate on just a few select stocks in the beginning so that you do not go down the path of information overload.

This method may seem easy, but it works. All a trader has to do is to concentrate on one particular stock and watch its movements each and every day. After a little while, the trader will have the confidence to make a day trade. While this strategy may not may you a millionaire overnight, it is likely that you will be able to amass small profits several times a day, which will eventually add up. It isn’t unusual for day traders to trade the exact same stock over a hundred times each day. This is because they believe they have discovered the secret to the successful day trade and that the more they trade the more they will make.

How to Make Money in a Down Stock Market

One of the core questions my coaching clients have asked me over the past few months is: “Can I still make money in stocks with the market down like its been?” The answer is yes, or no, depending on the type of investments you have.

If you hold stocks, stock mutual funds, or your investment is in the standard asset allocation accounts the answer is probably no. This is because these investments are held in large, regulated accounts that don’t allow short stock positions. This means that if the stock market goes down over the next 3-5 years, the accounts will lose money every single year.

Short positions, however, will allow you to make money whether or not the market goes down. These types of investments are only available to companies and individuals who trade individual accounts.

If you trade through your individual account rather than a fund, it is possible to for you to take charge of your own investment and make money in the stock market almost every day. That way, despite whether a stock value increases or decreases, you can make money, buy buying or selling short, as applicable.

If it’s that easy, why isn’t everyone doing it? It does take an investment of about $25,000 to set up your individual account. Some people don’t have the funds, or are reluctant to risk it in an individual account. And, it is true that stock trading for a novice can be very challenging. You could lose all your investment fast if you aren’t sure what to do.

There are tactics to alleviate these two concerns of the novice trader.

First, find a trading program that gives you low risk trade picks. The system I and my students use has stock pickers with an average experience level of thirty one years. With such experienced pickers, a trader can follow their picks with a high probability that they will profit from the trade. And if you set your stops to tie in with your personal risk tolerance level, your loss over time will be minimal.

Secondly, it’s important to find a program that walks you through every step to success. For example, in my 9 day trading class the students learn every aspect of using a turnkey system that is both safe and profitable to buy and sell short stocks, so that you can make money even if the stock market goes down.

Regardless of the system you choose, if you make sure that it has experienced advisors and a program that walks you through every step of the way, you can be smiling all the way to the bank while everyone around you is moaning about the poor performing stock market.

To read about other lessons I learned in my fifteen years as a day trader and coach, as well as tips and techniques for becoming successful at stock trading, even in a bad economy, read my free report “From Video Junkie to Day Trader,” and learn more about how you could be trading stocks profitably in as little as two weeks.

Truths of Stock Trading

There are thousands of fallacies about the stock trading discipline that arouse fear in a new trader’s mind and prevent others from even trying their hand at it in the first place. As a successful trader for over 15 years, I prefer to take a more positive approach and deal with the prevailing truths that exist in the field of stock trading. Here are just a few.

1.You will be rewarded from stock trading by keeping your trades low risk on a regular basis. Sure, this attitude will result in you missing out on the occasional windfall that the movies have led us all to believe can happen all the time.But you will find that, over time, waiting and hoping for those godsend trades usually results in an insane loss that deteriorates the portfolio you worked so hard to build.Better to stay lower risk with steady profits over time if you are looking to make stock trading more than a hobby.

2. You don’t have to spend all day trading to be extremely successful. This does not have to be a full time job. But please don’t misunderstand.I’m not implying that stock trading is another make money while you sleep angle. It takes time and effort to learn the systems needed to achieve success at stock trading. But, by using GAP trading effectively, my trading day lasts between two and four hours, plus another hour of prep time.And, I earn a great living. With the right system, you can too.

3.Building on the knowledge and the experiences of other profitable traders can greatly accelerate your learning cycle. Don’t start from scratch because it will take you 10 or more years and a lot of money to make all the mistakes others have already made.It is just resourceful business sense to build on the knowledge of others. How many times do we hear “don’t reinvent the wheel”, then turn around and do just that?Instead, read works by successful traders, take courses, find advisors and coaches, and use the insights of others to make your journey more enjoyable and low risk.

Stock trading is often portrayed as mysterious and hard for “regular guys” to understand.Take it from a “regular guy”, that is just not correct. With the right systems in place and a working knowledge of the basic truths of stock trading, anyone can be successful.

To read about other lessons I learned in my fifteen years as a day trader and coach, as well as tips and techniques for becoming successful at stock trading, read my free report “From Video Junkie to Day Trader,” and learn more about how you could be trading stocks profitably in as little as two weeks.

Establishing A Day Trading Plan

How imperative is it to carry out a day trading plan?

Why do you require a trading plan?

This article will explore numerous significant aspects of why you should maintain a trading plan, as well as the crucial elements of your trading plan.

A trading plan is of high magnitude to your trading success. Trading is a business, and the majority of businesses should have a plan. Fastidious planning is essential to your success. In fact, strategic plan developmentdevelopment will do you well in business as well as in trading.

If you don’t have a trading plan, your trading decisions could be habitually based on hunches and emotions – and chances are you will not accomplish trading success, over the long term.

By trying to trade without a trading plan – costly mistakes are inevitable. Emotional decisions are the generally destructive issue for a trader. Do not allow your emotions to dictate your trading routine.
It is not necessary to have a intricate trading plan, keep your trading plan plain. Have a written trading plan, as the procedure of writing things down can be critical to your accomplishment as a trader.

After spending many trading days paper trading your system, you are more easily able to set out and arrange a trading plan.

A trading plan must take account of not only your goals but must also specify how you intend to achieve them.

Steady procedures can only be achieved through a meticulous written trading plan. Traders must trust their trading plans, and remain true to their trading plan.

A day trading plan must include a few basic issues such as your trading goals and objectives. A trading plan must consist of your entries, profit targets and stop loss.

Entering into a trade is one of the earliest decisions you formulate when trading. However, this is also on of the least important……

A trading plan ought to also encompass position size. How much are you prepared to lose on one trade? The smaller the percentage of your trading account committed to any one trade, the larger the chance of your being winning. You want to be aware of the highest amount at risk for each trade. You additionally need to identify the maximum amount you are prepared to go down for the day before you stop trading. Protecting your investment, or money management, is without a doubt an enormously crucial ingredient of success.

The goal is not only to yield money, but also to be able to keep on making riches consistently for an extended period of time.

When in a successful trade, be tolerant and entirely benefit from the victory. The proverbial trading axiom is, “cut your losses short and let your profits run”.

A trading plan ought to identify precise goals to accomplish in a set time.

Having a written trading plan gives one an edge over nearly all others and as the failure percentage of traders is so great, how can you afford not to take a written trading plan.

A written trading plan will not assure you success, but not having one will pretty much guarantee failure.

The basis to any day trading plan is how well it performs over time.

Have you paper traded your system for a decent period of time? This would yield confidence to conquer every single setup. If you have a few stopouts in a row, which is inevitable to take place at some stage, you continue to take each and every one of the trades. Will your system perform in the long term?

You have tried your system and tested it and you are on cloud nine to go live with it. Now is the moment in time to write out your day trading plan.

Momentum Trading System