Do Not Overlook Futures Day Trading







Trading the futures markets is virtually identical from a chart standpoint as buying and selling the stock market. The principal distinction is the futures markets are naturally leveraged (small amount of money controls a relatively large investment). Still if you use margin on trading stocks, traders will not accomplish the leverage of the futures market. This is what makes the futures markets attractive as a day trading vehicle, or as a swing trading vehicle. Rarely do people hold futures investments for the long term - at most the trade might be a number of months.

If all you desire to do is day trading, then the futures markets needs to be on your list to trade. If you have the SEC required $25000 minimum to day trade stocks, then you can simply day trade the futures markets also by opening a futures account. There is typically somewhat more volatility day trading in the futures markets than in the stock market, and this provides some great opportunities. Most futures brokers will require you to put up approximately $5000 in order to open an account, certain brokers might be higher. Intra-day required margin to trade a contract or two are usually much less than the overnight margin. This is because overnight there can be large gaps in price brought on by news events and an individual is required to maintain enough capital in their account to cope with that level of volatility. Additionally, it is possible if you hold futures overnight (or even intra-day if you tend not to utilize stops) to have your futures account go into a debit balance as a result of the leverage. will never let this happen and will close out all your positions prior to this happening. This type of event is plausible and the risks should be understood. Intraday it is infrequent, but overnight it can happen with greater frequency.

While these hazards should not be downplayed, they should not keep you from trading futures either if you are a day trader. From a technical standpoint, trading the futures markets is similar to day trading the stock market, with the difference that there are not any "news events" on the futures such as analyst upgrades or downgrades to concern yourself with. Economic events and news happen daily, and these affect both index futures and stocks who trade off the futures, so this is nothing new. There are many websites now where you can get a no cost demo account to try out day trading the futures markets. If you discover that you benefit from doing it, consider adding the futures markets to your current trading.

The futures markets work especially well for testing out a day trading robot, because greater volatility. The futures are often a good selection for any form of auto trading robot because they tend to be more range bound than stocks. While a stock can run from 10 to 200 in a few months, the futures markets do not have this big a push, although they do trend up and down over months of time.

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