Futures questions from Beginner

Discussion in 'Financial Futures' started by billpritjr, Apr 27, 2004.

  1. 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

  2. you need to know the contract value.. should be easy to find on the exchange website..

  3. nkhoi


  4. FredBloggs

    FredBloggs Guest

  5. 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.

  6. Hey man thanks starting to make sense

    Not as "simple" as stocks

    anyone else please continue to chime in