Never Traded Futures: Advice?

Discussion in 'Commodity Futures' started by MacDRider, Feb 19, 2009.

  1. I have an IB account and I watch the crude oil futures a lot as I like to trade the DXO/DTO ETNs. All of this makes me think about just trading the futures.

    But I've never traded futures. Any advice, suggestions, resources, etc. would be very much welcome. Thank you.
  2. crude futures are an animal all their own. Watch how they trade for many months before putting up your own money.

    To get a "feel" for futures I'd start with something a lot less "whippy", say corn or hogs. Or if you just want to trade intra-day, something like the treasuries, which are very trendy on an intra-day basis.
  3. I'm more of a day-trader at this point. I enjoy watching the price of oil all day long and scalping it both ways :)
  4. Handle123


    If you can't be talked out of day trading, use Ninja Trader and do simulated trading, If you can make simulated profits four out five days and six weeks in a row, then you have a good shot at making it in real time, otherwise you will be throwing money to winds.

    Way too many folks open accounts and start trading without a clue as to how to trade and get wiped out in a few weeks. most people take more time planning their vacations that learning how to trade.

    And Crude Oil is one of the toughest markets to trade, it has lite volume and can always expect slippage on almost any stop, my worst fill to date was slippage of $700 per contract, when the "Big Boys" come to play, watch out. Out of ten trades, I can expect slippage on nine of them if I have to use a stop.
  5. That's interesting. The reason I started thinking about trading oil futures per se is we were talking about oil ETFs on the ETF forum and someone said that trading the actual futures contracts was so much better because they were so liquid and he almost never had any slippage with them. Completely the opposite of what was just said above.

    I haven't traded futures, so I don't know.
  6. Best advice - don't trade. Seriously. The reality is, that probably less than 0.3% of people will ever make a living from trading. You will spend a lot of time and money, realizing the wisdom of not starting in the trading arena
  7. Handle123


    I believe some very small percentage is very gifted to be able to size up how to trade and be able to be profitable in less than six months, I was not one of those.

    After I became single again in the 80's, I decided to only then to try my hand at Futures, up until then I only did long term stocks. I would go to work for eight hours and then spend at least another eight hours on weekdays and eighteen hours per on weekends learning how to trade, I still don't remember where three years went. I spent over 10,000 hours and after three years, still couldn't find my "niche", it took another four years to see the lite. Now it just didn't click all at once, I took many baby steps along the way.

    I think unless one has the passion and the drive to put everything into this endeavor, you will always be thinking
    "I am so close", but for so many that day never comes.

    If I knew then what I would give up in the pursuit of winning at the game, it would have taken less time to become a surgeon. Now twenty years later, I just got engaged. I gave up much, but I have loved almost every second of it.

  8. Well I appreciate your honesty. For whatever reason, I have not done well with trading anything other than oil. I've been looking mainly at macd, stochastics, rsi, and fib levels on live 1-minute charts, and have (knock wood) done consistently well with oil. I've made my mistakes as well, but I'm definitely going to stick what's working for me for now.

    I was actually hoping to get some advice from folks about the actual trading of crude oil futures. Enough warnings for now guys, thanks though.
  9. As I mentioned, I have watched the July contract a lot as that's what DTO trades on, and I've watched the front two months mainly for trading with DXO. I've studied the historical charts for various months as well, especially over the last year or two.

    So I've traded ETNs that track the futures and been happy with my results for the most part, but not the futures per se.
  10. more warnings. I will give you this advice if you are dead-set on trading crude futures.

    WATCH THE ROLLS! If I were you, I would simply specialize and trade the rolls...learn how the rolls trade in both contango and non-contango markets, and how seasonals and supply/demand issues affect this roll. Spend 2-3 days of each month actually trading it, but EVERY day figuring out HOW to trade it as far as entries/exits, timing is concerned.
    #10     Feb 20, 2009