where to learn basics of futures trading

Discussion in 'Professional Trading' started by schulzey, Oct 20, 2011.

  1. schulzey


    Hi everyone,
    I've been trading stocks for a few years now and I've done very well. I'd like to make the move to futures (specifically s&p e-minis) but I'm not sure where to start. Stocks are quite simple to understand and to trade but futures intimidate me a little.

    What is the best charting program to use for real time futures? I currently use lightspeed and speedtrader, what's the best overall discount broker (cost is very important to me as I'm active)?

    I understand the basic idea of what futures are and how they are traded but that's about it. Any information or books that are as basic as possible without trying to sell me a trading program would be great (I already know how to trade)?
  2. For all intents and purposes, futures are basically the same as stocks. Buy low, sell high.


    They expire every so often, depending on which futures contract you are talking, so they aren't necessarily good for "buy and forget" long-term holding (unless your broker automatically rolls them over for you every few months when they expire)

    Unlike with stocks, there is a minimum value per tick. If you buy one ES contract (s&p500 futures), it is going to be $12.50 per tick ($50 per point). One is the smallest position you can buy. This sort of forces you into using leverage.

    Taxes are much simpler than stocks. You just total up the profits and losses for the year. No listing each individual trade, no wash sale rule.

    Chart with whatever program you like that is compatible with your broker. I like Sierra Chart.
  3. although you have said almost all, i must add....

    that futures are much much better for the smaller trader, because of the holy margin and leverage......
    so, you can trade all markets as futures with leverage.....
    you can trade stocks as futures
    you can trade Forex as futures
    and the common know commodities and financial derivates as futures....

    But it is really impossible to build up a small account to a big one, without using leverage and margin. Or in other words, NOT if you dont want to trade 60 years to make your fortune.....

    Disclaimer: Margin trading with using leverage, can work for you as well agains you. Historical data and results are not a gurantee for future results.

    Regards, your broker !!!:p

  4. charting
    -> eSignal
    -> meta stock
    -> ensign
    -> Qcharts
    -> tradesignal
    -> tradestation
    -> sierra chart
    -> trade navigator
    -> axial finance
    -> worden


    i suggest:
    Interactive Brokers
    MB Trading
    Fast Brokers


    Good luck:)
  5. ah yes, i almost forgot....

    best source for trading education stuff....


  6. Lornz


  7. schulzey


    Thanks everyone for the helpful advice. I typically trade etf's like sso, sds. My account is $20,000 so I can't day trade yet.

    I'm not looking to place a million trades a day but the pattern day trading rules do get annoying to keep track if you change your mind or get whipped out of a few trades. I seem to take on more risk because if I take a small loss I can't get back in again without worrying about day trading.

    What I'm getting at here is futures would allow me to trade the same way I am right now but without having to worry about the pattern day trader rule.

    What I don't understand is the contract sizes and profit loss. I typically trade with half my account value on sso, sds. I'm not looking to use ridiculous amounts of margin. I'm looking to get the same return as I would on my etf trades but without being hindered by the day trading rules.

    I typically think in terms of percentage gain/loss so it's confusing when everyone always talks about the value of each tick. The s&p500 closed today at 1238.19. Is that the size of one contract? Would I buy 8 contracts then to get the same gain as trading $10,000 with SSO? I think I need to read some books on this.

    Thanks everyone for helping out!
  8. schulzey


    So with the emini futures the smallest position I can take would be $60,000? That's a lot of leverage. That's 3 times my cash value. Maybe futures wouldn't work for me then.
  9. Nothing says you can't trade the ES. It's just that it might be a lot more leverage than you are used to with the double and triple etfs, so you really need to be careful and make sure you know what you are getting in to.
    You could also download one of the broker demos from ThinkOrSwim or Interactive Brokers and see how a single contract reacts during the market action to give you a better idea how your account might bounce around.
    #10     Oct 21, 2011