Futures questions from Beginner

B

billpritjr

Hello

I have about 7 years experience trading stocks and am trying to learn more about futures. Please be patient with my question(s).

Note I am using Lind-Waldock simulator to learn.

I have observed that Soybeans respond well to a 10/20 dual EMA cross method, at least this past year. Yes, what worked in the past may not work tomorrow, I understand that fully.

My question is this:

The Soybean 10/20 BUY signal occured on/about 8-14-2003, at price 545.

What does "545" mean?

The Soybean 10/20 Sell signal occurred on/about 4-16-2004, at price 965.

965 - 545 = 420.

Lets say I have a $100,000 cash balance with my futures broker. Assuming I traded 5% of this on the above soybean trade, or $5000, what does the above trade represent in actual profits?

Please note, I trade stocks (and maybe at some point futures), on my own and do not rely on the trading to "pay the bills." I have a regular job, so I at no point am I trying to "force" the trades to work. Nor do I day-trade. What sparked my interest is a book I picked up by RC Allen, "How to Make Fortune in Commodities"

thanks for your time and patience

:(
 
This can be confusing.

See http://www.cbot.com/cbot/pub/cont_detail/0,3206,959+14397,00.html for contract specs on soybeans.

A one contract size is 5000 bushels of soybeans. Price is quoted in cents per bushel. In other words, a 0.25 point move is 0.25 cents per bushels or $0.0025 per bushel. $0.0025 times 5000 bushels is $12.5.

So a 420 cent per bushel profit is $4.2 times 5000 or $21,000 profit.

Also attached is the May 04 contract weekly chart.

Charles
 

Attachments

You must log in or register to reply here.
Back
Top