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Today’s Best S&P Futures Turning Points: Buy 5054.25 stop 5049.50. Short 5127.75 stop 5132.25.
Wednesday’s results: The short at 5092.50 was filtered out during the FOMC volatility.
The World Index: (+100/-100) soars from -50 to +8 with the open major markets mixed on lower volatility.
Catalysts: Jobless Claims & Trade Balance @ 8:30. Factory Orders @ 10:00. AAPL reports after the close.
Quick Tip: What to Trade
Yesterday you determined your time and starting capital commitments. Next is the asset class you’ll trade. (If you missed the blog click here).
Best choices…
Position Traders (weekly time commitment): Stocks (high capital requirement) and Forex (low capital).
Swing Traders (daily time commitment): Stocks (moderate capital), options, Forex, and futures (all low capital).
Day Traders (hourly time commitment): Stocks (moderate capital) and futures (low capital).
You can see now that finding the market you’re best suited to is a combination of your time commitment and your risk capital.
You’ll also notice that trading stocks requires more capital. The reason is leverage, or lack thereof. Disciplined use of leverage is critical for trading success.
The stock market offers you 2:1 leverage, and you’ll pay interest on the borrowed amount. Not as attractive as options, Forex, and futures which offer significantly more leverage with no interest charge.
Here’s an example: If you’re buying a position of 100 shares of Apple at $169 today your choices are a cash purchase of $16,900, a margin purchase of $8,450 (plus interest) or a one-year option purchase of $1,680 (no interest). Your percentage return on the option selection blows away the other choices and frees up more of your capital for other trades.
For short-term traders the leverage becomes even more important. If you want to day-trade the “market” using the S&P 500 index (100 shares of SPY), your choices are a margin purchase of $12,500, an option purchase of $165, or a futures purchase of as low as $123.
Obviously, you will not start trading based on just this information. It’s intended to point you to the market that you need to get trained in. They each have their own unique “personalities.” Before you start your simulated trading and eventual real money trading, get educated.
Tired of day trading alone and guessing what to do next? Join our team. You can learn the strategies and trade live with us daily for 30 days. Money back if you’re not blown away! Take advantage of the final days of this promotional price.
Trade Fearlessly,
Mike Siewruk
P.S. Feel free to pass this along to your trading buddies. Share in the wealth!
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