Trade Aptitude

Today’s Best S&P Futures Turning Points: Buy 5082.75 stop 5078.25. Short 5176.00 stop 5181.75.

Friday’s results: Neither trade setup triggered.  

The World Index: (+100/-100) eases from +64 to +50 with all major world markets Bullish. 

Catalysts: Nothing on the economic calendar. Waiting on FOMC. 

Quick Tip: Which Contracts?

One of the many benefits of day trading Futures is there are many markets to trade. Stock indexes, currencies, interest rates, metals, energies, etc. Each of these markets will have its own structure at any given time: Trending or not, volatile, or not. 

The question becomes which contract(s) you should trade and when. Here’s a quick look at filtering for candidates: 

1. Volume. Without adequate volume you’ll experience slippage and not perform as well in the real world. 

2. Margin. Check with your broker and determine whether your account size can afford the margin required. Keep in mind that all brokers will give you more margin than you should use. Keep your per-trade risk to no more than 2% of your account, even if the margin required allows you to trade excess contracts. 

3. Movement. You’re going to make more money with contracts that are moving. Compare using the same time interval and ATR. Keep in mind that ATR for futures contracts is meaningless for this purpose unless you multiple the ATR by the point value of the contract. That will give you the ATR in dollars the contract is moving and allow you to compare properly.

4. Margin Ratio. Divide the “movement” number (ATR in dollars) you just determined by the required margin. Compare. You’ll quickly see which contracts give you the most “bang for your buck.”

5. Market Structure. Here’s where having multiple strategies in your trade plan pays off. Trade your trend strategy when the contract is trending. Trade the reversal strategy when it’s not. 

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!