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ONLINE TRADING
Trading futures online is not magic. Even though the information is
moving at the speed of light, success in the market still requires
discipline, knowledge, and patience. There are several benefits to
online trading:
- Convenience. The financial
information you need for your trading decision - your outstanding
futures positions, the amount of cash you have in your account, and
the amount of margin required for your intended trade - can be found
on your computer screen.
- Speed. Futures prices can
move quickly. Once you have made your trading decision, you
want to place your order ASAP. Speed of the execution is
especially important if you are placing a market order. Online
orders get to the trading floor faster than telephoned orders.
- Lower Commissions. Brokerage firms
usually charge less for handling an online transaction because fewer
of their resource are tied up in executing a trade.
- Control. When you trade
online, you decide (no one else) what to do and when to do
it.
- Accuracy. Occasionally,
messages between you, your broker, and the trading floor can be
mis-communicated. Online trading reduces the number of steps
in the order process, therefore reducing the chances of a
misunderstanding.
Remember, the risk of loss exists with all futures trading, which includes e-mini futures as well. Only risk capital should be invested.
Getting Started:
- Hardware - make sure you have a
reliable computer. Your broker should be able to tell you the
minimum requirements (megabytes of RAM, megahertz speed and hard
drive capacity of gigabytes) need to run their online trading
program.
- Access - You can use a 56k
(56-kilobyte) modem and connect from your home phone, however, this
ties up your phone line and as you move around the web, a 56K modem will
start to seem slow. Other ways to connect are: DSL, satellite,
or cable modem. Again, your broker should be able to best
describe which works best for the type of trading you are planning
on doing.
- Trading Program/Software - generally this is
provided by the firm you are trading through. Usually you can
go to their website and download the software directly to your
computer.
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DAY TRADING
Day traders end each business day flat, with no positions. They are
immune to any adverse economic news that might break while the markets
are closed, and this immunity is deemed one of the advantages of day
trading. Because fundamental market factors change very slowly, day
trading decisions are mostly based on technical analysis. Price
support and resistance levels are especially important; They can be
established with a few days of price action.
The requirements for
successful day trading are (1) a liquid, volatile futures market; (2) a
futures brokerage firm that offers online order entry, low commissions, and
good trade executions; (3) access to up-to-the-minute market and price
information; (4) a willingness to spend a large part of the business day
tracking price movements and placing buy or sell orders; and (5) a strong
stomach.
Seasoned day traders
do not recommend having more than one futures position on at any one
time. If you are juggling two or more day trades, you won't be able
to give any one of them the attention it requires.
There are risks of
loss associated with Day Trading.
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POSITION TRADING
A futures position that is held overnight is generally referred to as a
position trade. Position traders keep their eyes on longer-term
price trends; they may hold the same futures position for several days or
weeks.
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Contact Us to help you
decide which type of trading is right for you!
Trading futures and options involves substantial risk of loss and is not suitable for all investors. |
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