| Futures Positions can
be divided into two categories: Position
Trades and Day Trades.
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. |