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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts

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kimberley

Mevis

To: kimberley who wrote (57693)	4/23/2022 9:23:14 AM
From: Sun Tzu	3 Recommendations Read Replies (2) of 97611

Trading futures is not that different than trading anything else, but there are a few caveats: (1) Understand your contract. You know how oil went negative in 2020? That is because a bunch of n00bs did not understand that the oil contract delivery date (i.e. when you have to take possession) was different than the expiry date. So they ended up with commitments that they could not handle. (2) What moves the contract is different. Regular stocks usually move in response to the earnings and industry news. The futures move based on macro news or the weather or inventory data (depending on what you are trading). Currency futures have peculiarities of their own. (3) Algorithms dominate that market. This is more pronounced in the after hours. (4) There are patterns based on the time of the day. Like the tide patterns of the sea, each day is different but the pattern is there. You can make and lose a fair bit of money just based on these patterns. In short "futures" are not one thing. Every contract is different both in its requirements and its patterns. Choose one and get good at it before branching out. I don't think that the futures trading is any riskier than any other margin trading. Just because you can use the margin doesn't mean you have to (or should). Always leave yourself a fair margin and don't overextend yourself. I also don't think that a 24 hour contracts are a bad thing. Many people see it as a positive because they are not stuck with a close-to-open risk. You can change your mind as events materialize rather than face big gaps in the morning. Excessive margin is what kills you, not the other stuff. I recommend that you spend a month paper trading. I also found it very informative when I spent a couple of weeks pulling all nighters to understand the intraday patterns and algorithmic trades.

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