Today is Thursday July 8th and we will be discussing how to trade the futures market.

There are many ways to trade the futures market. One of those ways is to swing trade key positions that you hold on to for a week or longer. This requires holding your positions over night and does increase your risk. Many traders prefer to day trade the futures market, where the opportunities are endless.

There are many styles of day trading, with position trading, trend trading, scalp trading and counter trend trading, just to name a few. Each style has it advantages and disadvantages.

Every trader needs to do personal analysis to see which style best suits there personality. If you are very impatient, you probably would not do best holding your positions for long periods of time. Trading for smaller moves more often can be the way to go, as long as your risk is controlled and proportionate to your gains.

Many traders will not put a trade on unless they have a 2:1 profit / loss ratio or higher with emphasis on higher. There is nothing wrong with that and may be the way to go for most people. If this is your desired way to go, you will need patients to wait for the trade to come together. This also may mean that you need to trade a good part of the day or all of it, to get the high quality trades to come to you.

This brings us into trading time frames. What is the best trading time frame to use. This goes back to finding out what type of trading best suits you. If you have a limited amount of time to trade, say 90 minutes off the opening bell. You will need to bring your time frame down to the point that you will have several trading opportunities to get in and get out. If you only have limited trading opportunities, you may find yourself in a session draw down with no time or trading opportunities to come back.

If you are like me, I am able to find many trading opportunities trading a combination of scalp trading and trend trading. Both of these terms are relative to my trading method (Sniper Day Trading) and may mean something different to other traders.

Learning how to trade the futures market does not have to be hard. A person almost has to think in the opposite fashion as conventional wisdom. I have heard it said and would agree that futures trading is simple, but it is never easy. If you have a strategy that is easy to understand and has clear visual guidelines to follow, with modest objectives, a trader can get and keep the upper hand over a long period of time.

There are other factors that many futures traders do not take into account. Traders are human, and such they all have a human nature which is predicable. This human nature can be used to our advantage or it can be the “kiss of death”. Being successful in my estimation will require that every individual take steps to overcome all personal weaknesses, what ever they may be. If you procrastinate, you will need to work on that. If you are lazy, you will need to address that. If you are impatient, you will certainly be tested, and so. What ever personal weaknesses you have, the market has a way of uncovering them and bring it to the light.

My suggestion for anyone who wants to trade the futures market, do not open an account larger than $5,000. Bring personal discipline into your life. Exercise regularly, eat a balanced diet and get plenty of rest. That is just to start. You will notice there is nothing in there that has to do with actual trading at this point. The reason, if you are not together, your mind will not be together and thus your trading efforts will suffer.

The reason for the small opening cash balance, is to bring a moment of pause. If you are just starting out, you will likely loose the funds, no matter how large, in your trading account, you will be fighting human nature as well as other traders.  That is just the way it is. Most people are not going to be mentally and physically prepared to do battle and will fall victim. If you take the preemptive  action you will have an advantage. Having to refund your account will bring as I mentioned “a moment of pause”, to the picture. Giving you extra time to make changes and adjust yourself for the consistent gains you strive for.

Trading the futures market successfully takes time. Let me say that again, because it is very important. Being successful takes time. Far to many traders rush into live trading with only a few weeks if that under there belt. It takes longer than that for most people. The reason, most traders do not have a tested trading method that they follow, one that actually works.  They have read a few books, look online at different websites to see what can be extracted and feel that they are qualified to consistently make money.

It takes more than that, a lot more. Every trader needs to have set guidelines and or rules to follow. If you don’t, human nature will take over and you know the rest of the story there. If you try and come up with them on your own, it would or could take years. I am not kidding about that. I know, because I created all my own rules and method and it takes that long. For many who go that way, your rules and or method may just not be any good, so you could have and will likely waist a lot of time and money.

The answer is not always buying systems or trading methods. Some are good, most are not. Some are very expensive, 5K and up and others not so much. It is hard to know who to trust in the trading education business. You should be able to see consistent patterns in what ever they are offering. Is this trad-able, is it easy to follow, is it something you can see yourself doing?  I will continue with part two of this in tomorrows blog postings.

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In today’s trading, I had a good profit day. I did take a few trades that could have been avoided, but I was able to overcome it as I usually do. I had a great trade towards the end of the day that can be seen in the U-Tub video gallery, top right hand corner website, first in line. Other than that, my call yesterday was for the market to trade up to 1066 where it would find temporary resistance and back off, but then attempt another run for up to 1080. So far that is exactly what happened. Yesterdays market closed at 1059 and we traded up to 1067 (1 point over) and backed off 13 S&P points and made a run to close at the high for day, 1069. We should see higher prices on the open which could include the 1080 forecast. I would not be surprised if we did see a reversal after 1080 is hit. This is just something I will be looking for. Good Trading, and be safe.