Day Trading Systems

If you’ve been thinking about becoming a day trader, or you’ve already played around a bit as a day trader, then make sure you take a look at this insightful article about before you go any further. The truth could make you wealthy. According to Wikipedia, Day trading ‘refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close for the trading day. Traders that participate in day trading are called active traders or day traders. Some of the more commonly day-traded financial instruments are stocks, stock options, currencies, and a host of futures contracts such as equity index futures, interest rate futures, and commodity futures. Day trading used to be the preserve of financial firms and professional investors and speculators. Many day traders are bank or investment firm employees working as specialists in equity investment and fund management However, with the advent of electronic trading and margin trading, day trading has become increasingly popular among casual, at home traders.” My question to someone looking into day trading, is why? Why would someone be willing to risk so much? Day trading has a certain stigma attached to it for a reason-because so many fall prey to the get rich quick hype being spread all around the Internet. Bluntly put-day traders are sometimes considered gamblers, because to a certain extent, that is what they are doing. They are banking on the fact that one stock may go up, and another may go down in the same day all based on pure speculation. If you are looking to earn a stable and reliable income based on solid documented results over the course of several years, day trading is no for you.

However, from my experience, I have found an extremely lucrative online business with rock solid track record of producing multiple six figure incomes for many first year participants. If you would like more information about the most secure business model online, click on the links in the resource box below.

Trading Futures – The Fundamentals of Futures Contracts

The heritage of trading futures dates back again to the 1840s in Chicago when commercial dealings among farmers started to consider off. With that stated, the heritage is a complete diverse topic so that is about all this write-up will touch when it arrives to that. Nonetheless, a definition of futures trading is even now essential to obtain great realizing of how it operates and how much you stand to gain from employing it.

Trading futures pertains to a contractual agreement to buy or market a distinct commodity – which could be agriculture, outfits, technology, etc associated commodities – or economic instruments (this kind of as stocks, stock possibilities, currencies, and the likes) at a pre-determined value in the upcoming. It frequently demands the parties undertaking what is termed “futures contracts” which information the top quality and quantity of the underlying asset.

Relating to Investopedia, the conditions “futures contract” and “futures” refer to fundamentally the identical point. This indicates, if you ever hear an individual say they purchased some “agriculture futures”, what they are declaring is the identical as declaring they acquired into some “agriculture futures contract”.

The general contract in the expense earth is that trading futures is a significant economic concept; meaning the futures current market is a key fiscal hub, as it provides a floor for extreme competitors among buyers and sellers and, a lot more importantly, delivering a centre to handle value hazards.

Like nearly each other monetary dealings, the futures industry is extremely dangerous, liquid (i.e. modifications in supply or need have a smaller result on cost), and intricate by dynamics, but it can be understood very easily if you are keen sufficient to understand.

With that stated, irrespective of how liquid, high risk, or complicated the futures industry may well be you can even now advantage significantly from it. For this to come about, you can either: do it yourself as an investor if you are positive of what you are performing; or open a managed account, equivalent to an equity account – where your broker would have the power to trade on your behalf, following disorders agreed upon when the accounts was opened; or, final but not the least, join a commodity pool which like a mutual fund is a group of commodities which can be invested in. The commodity swimming pool presents a very much reduced risk for investors like you – specially if you are unsure how trading futures operate.

Examine a lot more on Trading Futures by clicking the hyperlink.

A Guide To Futures Trading

Product Description
Excerpt:

Futures trading offers a good opportunity for other people to invest in. trading in futures contracts offers people the unique opportunity to invest in something other than stocks. Although sometimes they also operate in the same manner, futures trading presents a different method of earning revenues for the amount invested on it.

There are certain advantages that futures trading offers to interested investors. One of them is that such instrum… More >>

A Guide To Futures Trading

The Complete Guide to Futures Trading: What You Need to Know About the Risks and Rewards

• ISBN13: 9780471488026
• Condition: USED – Very Good
• Notes: BUY WITH CONFIDENCE, Over one million books sold! 98% Positive feedback. Compare our books, prices and service to the competition. 100% Satisfaction Guaranteed

Product Description
Many investors learn how to trade equity options, but many are unfamiliar with futures. As headlines about commodity prices proliferate, active, self-directed investors are turning their attention to futures. The Complete Guide to Futures Trading is a comprehensive introductory handbook to investing with commodity futures, including the increasingly popular mini(r) stock index futures and the new singles stock futures contracts. It offers how-to advice from finding … More >>

The Complete Guide to Futures Trading: What You Need to Know About the Risks and Rewards

How About Learning Futures Trading?

Oil is the lifeblood of global economy. In the summer of 2008, crude oil prices jumped from around $60 to around $150 in just a matter of few months. Those hedge funds and savvy traders, who knew how to trade crude oil futures made a windfall in a matter of few months. This rise in crude oil prices is going to repeat itself in the near future. Enter the exciting world of futures trading. Suppose, you want to profit from the volatility in the crude oil market. You take a position in crude oil market by going long on crude oil futures. Suppose, you buy 1000 barrels of crude oil. Hey, can you keep 1000 barrels of crude oil in your garage! Definately not! You are just looking for an opportunity to profit from the crude oil prices not taking physical delivery of 1000 barrels of crude oil. The beauty of futures trading lies in the fact that you don’t need to take physical possession of any commodity. You can keep the position open and close it in cash when your profit target is achieved or the futures contract is about to expire!

Have you ever thought about trading futures contracts? The average trader would be surprised as to the range of things that can be traded with futures contracts. As a futures trader, you can take opposing positions in gold and US Dollar futures contracts to take advantage of the opposing price moves.

As a futures trader, you can trade precious metals like gold, silver, platinum or palladium. You can also trade futures contracts on currencies like US Dollar (USD), Japanese Yen (JPY), Canadian Dollar (CAD), British Pound (GBP), Australian Dollar (AUD) and others.

You can trade metals like copper, aluminum, zinc, lead, tin or nickel. You can trade steel. You can trade grains futures contracts like wheat, corn, soybeans, bean oil, oats, rice, barley and others. You can even trade food and fiber futures contracts like coffee, sugar, cocoa, cotton, orange juice, lumber or others. You can trade meats like live cattle, pork, lean hogs and others with futures contracts.

You can trade plastics with futures contracts. You can trade energy futures contracts like crude oil, Brent Crude, natural gas, propane and others. You can trade financial instruments like Treasury Notes, Treasury Bonds, Munis (Municipal Bonds), Eurodollar, Bund ( German Government Bond), Euroyen and others. One of the most popular futures contracts are the Stock Index Futures like the S&P 500, Dow, E-Mini S&P, NASDAQ, FTSE, DAX and others. You can even trade futures contracts on individual stocks. There are even futures contracts on Hurricanes, home prices and even on things that you cannot imagine.

The main players in the futures market are the exchanges, speculators, hedgers and the regulators. The major futures exchanges are the NYMEX (New York Mercantile Exchange), CME ( Chicago Mercantile Exchange), CBOT (Chicago Board Of Trade), LME (London Mercantile Exchange), TOCOM (Tokyo Commodity Exchange) and the Eurex.

If you are a speculator who is looking for making a quick capital gain then futures trading is for you. As a speculator, you would like to profit from the market risk and volatility.

Major Futures Trading Exchanges-Chicago Mercantile Exchange, Chicago Board Of Trade & Nymex

Futures trading is one of the ways to make money and grow your wealth overtime. Many people only invest in stocks. However, trading futures contracts like copper, wheat, corn, coffee, soybeans, pork bellies, cattle, crude oil, gold, ethanol, heating, gasoline, silver, interest rates, currencies and others can be highly lucrative.

If you want to profit from commodities than futures trading is the best and direct method of getting access to the commodity market. There are several active futures trading exchanges in the US. Three of the world’s largest futures exchanges are located in Chicago.

The largest futures trading exchange in US is Chicago Mercantile Exchange (CME). A large number of futures contracts get traded on CME that includes commodities, stock index futures, foreign currencies, interest rates, environmental futures and others.

The commodities futures that get traded on CME include live cattle, milk, lean hogs, feeder cattle, butter, limber, pork bellies, Goldman Sachs Commodities Index and fertilizer.

Now, one of the ways to trade stock market is to trade stock indexes like the various S&P 500 like the S&P 500 Midcap, Small Cap as well as the Russell 2000 and the NASDAQ 100. CME provides you with the opportunity to trade futures contracts on these stock indexes as well as their mini versions the E-Minis.

GLOBEX is the Electronic Trading Platform owned by the CME Group that allows the electronic trading of these contracts almost 24 hours a day. So you can easily trade almost all these contracts from the comfort of your home electronically using your computer.

The second most important futures exchange is the CBOT ( Chicago Board of Trade).The futures contracts that are available on CBOT include agricultural futures like the soybeans, ethanol, rice, corn, wheat and others. Mini contracts on corn, soybeans and wheat are also available for trading on CBOT.

Interest rate related futures contracts that get traded on CBOT include Treasury Bonds, FED Funds, spreads, municipal bonds, German debt and swaps. Dow Jones Industrial Average (DJIA) futures popularly known as Dow futures and its E-Mini version plus gold and silver futures and their mini versions also gets traded on CBOT.

Now the best place to trade crude oil, natural gas, gasoline as as well as a host of other energy futures in the NYMEX (New York Mercantile Exchange).This is infact the global hub for energy trading and offers futures contracts on unleaded gasoline, heating oil, electricity, light sweet crude, natural gas, propane and coal.

Futures contract on precious metals like gold, silver, platinum and palladium also get traded on NYMEX. Futures contracts on metals like copper and aluminum also are available on NYMEX.

Commodity Futures Trading – An Overview

Futures trading are the trading of future contracts. Commodity future contracts are contracts made to trade the underlying commodities somewhere in the future at a fixed rate, usually in the present day rate. Like stock trading, futures are traded in specific centralized trading markets like S&P and Globex.

Recently, there is a huge increase in the number of traders trading futures contracts. This can be of many reasons as 1) the simplicity of trading enabling virtually any one to trade, 2) high liquidity present in the market due to the huge volumes of trades done very day, 3) the stability of the market compared to others, 4) easy to own underlying commodity – can buy a high priced product at lower prices at the time of contract, 5) low commission rates compared to trading underlying futures stocks, 6) the ability to trade from home with reduced working capital, 7) lower initial investment needed, the availability of mini futures requiring less account minimums and having narrow spreads, and 9) the presence of a variety of underlying products present on market.

There are mainly two types of futures trading contracts available in a futures market as those require a physical delivery and those require a cash settlement. The contracts which require a physical delivery are known as commodity futures and include futures for agricultural commodities like rice, wheat, sugar, oats; energy commodities like natural gas, crude oil, heating oil and others such as animals, wood etc. Futures contract which require a cash settlement are known as financial futures and involve treasury notes, bonds, mutual funds etc.

The buying of futures, in the commodity futures market, is known as “going long” and selling the futures is known as “going short”. According to the trading style followed, online futures traders can be broadly classified in to two as hedgers and speculators. Hedgers are traders who trade for price certainty. Usually they are the issuer of futures contracts, who do so to tackle the potential loss at the actual trading time of the underlying commodity. Speculators are the actual traders buying, holding and selling these contracts for profit. Speculators include all types of traders; arbitragers, day traders, swing traders and position traders.

Every Futures trading require a futures trading broker or futures commission merchant (FCM). A futures trading broker is an intermediate between the public trader and the futures market, who deposit a margin from the web trader to the futures trading market to make the trader a recognized one. There are two types of futures trading brokers, full-service brokers and discount brokers.

A futures trading broker is responsible for maintaining the records such as each customer’s margin deposits, open futures, money balances, transaction completed etc. For providing these services futures trading brokers charge a commission fee, which varies which brokers. All these process are regularly monitored by Commodity Futures Trading Commission (CFTC), the federal agency protecting against manipulation, abuse, fraud and scams in futures commodity trading.

Author: Praveen Ortec
Article Source: EzineArticles.com
Provided by: Guest blogger

3 Great Advantages of Futures Trading

A lot of people these days will tell you that futures is one of the most profitable financial investment instruments. The attraction of futures trading is the fact that it isn’t too complicated. The problem with typical stock markets is that there are thousands and thousands of stocks available, and to some that might seem like too daunting a figure to deal with. With futures markets, a speculator has only a handful of markets – about forty – to choose from. Just as it is easy to choose from that handful of markets, it is also easy to speculate commodities futures because the markets are affected by extreme weather conditions like storms or droughts. A decision to buy or sell can be made within moments of a weather report broadcast, and there is always a chance for profit whether prices go up or down.

There are in fact many advantages of futures trading. For this article, we will look into 3 of the best reasons why you should consider futures trading.

Small Commission Charges

Compared to other investments, the commission charges for futures trading are relatively small, and paid only after a trader’s position has ended. The commission charges may vary, depending on the service level of the broker. Commissions involving online brokers may be as low as $5, while brokers who provide full service in terms of advice on the trades made can charge up to $50 per trade. For a broker in a managed trading commission controlling all trading decisions at his discretion however, the charges can go as high as $200 on each trade.

Paper Investment

When you purchase stocks or bonds, you actually own that particular investment, but with futures it’s a little bit different. Trading futures does not require the trader to have or own actual physical goods on hand in order to trade them, because all the trader is really doing is speculating with futures contracts. It really is just a paper investment, like an insurance policy or a monetary bet. There are no physical goods involved in the exchange, and the actual commodity in the contract that is being traded is only exchanged on rare instances when the delivery of the contract takes place. For most futures traders (who are usually speculators themselves), the trade is a paper transaction, pure and simple.

High Leverage

The fact that futures contracts are highly leveraged financial instruments means that an investor can go into the market with a relatively small investment – called margin – and potentially come out reaping large profits. The concept of investors having to pay the ‘margin’ is comparable to a security bond, whereby should the trader make a loss on his trade, he may lose some, all, or even more than what he put up. However if his market predictions turn out to be correct, he gets back his margin and whatever profit he might have made, the profit usually being ten-fold on a 10% margin. In comparison to other investments, futures trading offers an excellent return, and this is why it is one of the best advantages of futures trading.

Futures Trading – The Advntages Of Trading Futures Markets

Trading futures contracts have several advantages over other investments:

1. Futures are highly leveraged investments. To ‘own’ a futures contract an investor only has to put up a small fraction of the value of the contract (sometimes as little as 2-3%) as ‘margin’. In other words, the investor can trade a much larger amount of the commodity than if he bought it outright, so if he has predicted the market movement correctly, his profits will be multiplied compared to the amount deposited as margin. This is an excellent return compared to buying a physical commodity like gold bars, coins or mining stocks.

If all this is a bit over your head, or you’re looking for a solid day trading strategy, I suggest you join me on one of my live webinars by visiting this site.

The margin required to hold a futures contract is not a down payment but a form of security bond. If the market goes against the trader’s position, he may lose some, all, or possibly more than the margin he has put up. But if the market goes with the trader’s position, he makes a profit and he gets his margin back.

For example, say you believe gold in undervalued and you think prices will rise. You have $3000 to invest – enough to purchase:

10 ounces of gold (at $300/ounce), or 100 shares in a mining company (priced at $30 each), or enough margin to cover 2 futures contracts. (Each Gold futures contract holds 100 ounces of gold, which is effectively what you ‘own’ and are speculating with. One-hundred ounces multiplied by three-hundred dollars equals a value of $30,000 per contract. You have enough to cover two contracts and therefore speculate with $60,000 of gold!)

Two months later, gold has rocketed 20%. Your 10 ounces of gold and your company shares would now be worth $3600 – a $600 profit; 20% of $3000. But your futures contracts are now worth a staggering $72,000 – 20% up on $60,000.

Instead of $600 profit, you’ve made a $12,000 profit!

2. Speculating with futures contracts is a position investment. You don’t have to literally store three tons of gold in your garden shed, 15,000 litres of orange juice in your driveway, or have 500 live hogs running around your back garden!

The actual commodity being traded in the contract is only exchanged on the rare occasions when delivery of the contract takes place (i.e. between producers and dealers). In the case of a speculator (such as yourself), a futures trade is purely a paper transaction and the term ‘contract’ is only used because of the expiration date being similar to a ‘contract’.

3. An investor can make money more quickly on a futures trade. Firstly, because he is trading with around ten-times as much of the commodity secured with his margin, and secondly, because futures markets tend to move more quickly than cash markets. Similarly, an investor can lose money more quickly if his judgment is incorrect, although losses can be minimised with Stop-Loss Orders. Our trading method uses stop-loss orders to protect capital and lock in profits and thus makes the method robust and dynamic.

4. Futures markets are usually fairer than other markets (like stocks and shares). These markets are regulated by independent authorities in every country in the world. The transactions are transparent and trading activity is reported daily. Transactions are placed through a Clearing House and finally all trades are guaranteed by the Exchanges. This means that there will always be a seller for every buyer and a buyer for every seller.

5. Most futures markets are very liquid, i.e. there are large volumes of contracts traded every day. This ensures that market orders can be placed very quickly as there are always buyers and sellers of a commodity. For this reason, it is unusual for prices to suddenly jump to a completely different level, especially on the nearby contracts (those which will expire in the next few weeks or months).

6. Commission charges are small compared to other investments.

Futures contracts offer traders simplicity, flexibility and cost savings. There are no costs attached to the leverage received and transaction fees are small which means futures are head and shoulders above all other leverage products. Futures are the second most liquid markets in the world which means that orders are filled immediately and at the desired price.

All in all, futures are the perfect traders market.

Why Online Futures Trading Can’t Compare With Forex Trading

This article discusses the difference between the online futures trading market and the FX market. While it might be a perspective from the left field, there are plenty of reasons why online futures trading cannot compare with Forex trading in terms of liquidity and profitability. Both markets are completely different and have their own characteristics. They both have their ups and downs but Forex seems to outweigh one in the positives; especially in these bearish economic times. Read on to find out more about why Forex should be the choice for you for online investment trading, or even just starting to build your financial empire from home.

Futures exchange markets and their online counterparts are essentially a central financial arena where people can trade with futures, or futures contracts as they are more popularly known. They purchase commodities at a specific set price, for them to be delivered somewhere in a set time in the future. They incorporate all the markets from fixed income, corporate and government bonds to even the derivatives and stock market options. While the theory is pretty good, where you get to buy commodities at a certain price (in the hope that the price will increase by the time it is delivered), there are high risks involved. Firstly, once you do purchase the set of commodities, you are basing this on complex calculations by firms and by your own forecasts, either knowing that prices will go up and you can make a tidy profit.

The problem with this is simplistic really, no one can really predict the future and the credit crunch and failure of many financial giants have shown people this. This market is the least liquid of all markets because you enter into an agreement for delivery and you have no way of backing out of your investment decisions. The Forex market is completely different. The FX market is the most liquid of all markets when it comes to commodities trading and this means you can react when negative market vibrations start to affect forecasts and prices start to drop. This means you can change investments and put money in either safe options or the other side of the market. Also futures trading also incorporate all the commodities that are under duress ever since the global economy started to go under just a few months ago. So the risks in these markets are augmented by the risks of the futures agreement you have subjected yourself to.

For now, there is no viability in futures trading, especially for casual, individual traders like yourself. You need to look at a market that is liquid, allows for short term trading and one that can yield gains on both sides of the economic hyperbole. These are the features of the FX market and this is something you should consider now. This is why online futures trading can’t compare with Forex trading and this is why you need to re evaluate your investment platforms before you end up making a mistake.

Author: Christopher M Lee
Article Source: EzineArticles.com
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