Transition to Futures

Well guys i am no pro
But one thing a person has to realise is to take a loss which i very hard
I started with $2500 trading Futures i went it up to $5000 in 1 1/2 week and i was already thinking if things keep up that way i should start looking for a house or a apartement to buy
But my 1 loss holding 7 contract on YM going again me like 40 point wiped my whole account
When u trade future a person should know when to take profit
A person should know how to hedge ( if i am already up $400 how to i hedge the position Let say i am long and i am not sure if the YM is going any higher i got short on the NQ just in case the ym make a record hig i should know when to take a quich profit etc etc
Trading Future is a very risky thing then equities the only thng is that if u have the right discpile and the right size not blow your account size u can make a ecent living and when u have more $$$ u go for the KILL
I am no super trader just my blow out trading experience i have learnt :)
 
Can somebody explain the hedging thing to me. If I am not confident in a trade, why do anything at all?

I mean, I understand "hedge" risk, as in be ready and protected for something you don't expect but somethings I just don't get.

Some FX broker was pitching me his platform because I could "hedge." He pitched me a strategy to buy and sell the EUR/USD, so I would have one long and one short. This way when it moved, I could cover the one I didn't want, but I would still have the good one.
I asked him if he was retarded. He responded that he was not which let me to believe he was trying to rip me off and capture that many more spreads with one idiotic trade.

So, for short term trading, why hedge something you're not sure of? Why not close it? Because, by hedging, aren't tripling your commissions?
 
Quote from whoknows?:

Some FX broker was pitching me his platform because I could "hedge." He pitched me a strategy to buy and sell the EUR/USD, so I would have one long and one short. This way when it moved, I could cover the one I didn't want, but I would still have the good one.
I asked him if he was retarded. He responded that he was not which let me to believe he was trying to rip me off and capture that many more spreads with one idiotic trade.
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Yep, I think they use it as a screening test. If you don't assume he's an idiot and walk out of the office in the next 3 minutes, then he's got a good mark.
 
Quote from Neet:

I've made an important decision. After daytrading equities for a few years Ive decided that I would like to give futures a shot.

If any of you out there, feeling bored and willing to help, I would appreciative some starting points. Perhaps books, links or whatever you think it's appropriate.

Thank you.
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It doesn't matter what you trade as long as you can control your emotions and have a plan to where you will risk X amount for X in return, simple as that.

I would suggest finding a setup that you've tested and apply your strategy to it. If you don't have a setup or a plan, don't trade. Always use a stop.

Leverage- If you can't make money with 1-3 contracts, what makes you think you can with 5-10 contracts.(just something to think about)
 
Hi All,
Dont mean to go off thread at all but can someone explain 'what' is the purpose of a futures contract on say the Dow or the S&P ; I understand how to make money from them, I just struggle to get my head round 'why' this type of product exists. I mean its obvious why there are futures in oil, gas, wheat & other commodities etc but what purpose does an e-mini YM or ES contract have in 'real life' ( apart from traders to make, or lose, money of course)?
Thanks in advance
Mitch
 
One possible reason for Standard And Poors Index futures: I recall about 1987 there was no SPY index tracking stock. I do not remember any actively traded security representing the general market indexes. Index futures could be used by mutual funds for hedging or investing. I remember reading that customers accepted index futures contracts and trading volume increased since introduction. Not all futures contracts become popular. I recall electricity futures contracts are inactive. The commissions associated with futures contracts may be less than the costs of stock transactions. Bid ask spreads may be smaller and liquidity greater in the futures market.
 
Quote from Neet:

I would appreciative some starting points.
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In the futures market "margin" is not the same as the word "margin" used by stock brokers. In the futures market "margin" is a performance bond, something like a down payment. It is possible to lose more than all the money in a futures account.
 
Plan your stops in advance & don't negotiate them with yourself afterwards, otherwise you will fail.

Here are some quotes from J Livermore, even though he went bankrupt a few times and finished his life by suicide suffering from depression, the quotes are valid and relate to what you are about to do. Depending on 'what you're made of' trading might be a very psychological process, both when in red & black. Good luck!

http://www.elitetrader.com/vb/showthread.php?s=&threadid=83451&highlight=jesse
 
Forget paper trading...find a trading platform you like, get on a simulator with a demo account and try out your strategies. Also, check out Van K. Tharp's latest book. Good luck!

MiniDowTrader
 
Quote from MiniDowTrader:

Forget paper trading...find a trading platform you like, get on a simulator with a demo account
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And that would be different from papertrading, how? Papertrading means anything that is not done with real money, so it doesn't matter if you actually do it on paper or electronically on a sim....

As it was mentioned, the biggest difference is leverage and the hardness come from trying to decide what is the best leverage for any strategy.

You see if you trade 1 contract for every 10K on your account, you don't have to worry about 100 YM points going against you, thus you can filter out more noise...
 
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