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.

 

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. 
Past performance is not indicative of future results. 


© Copyright 2004. InvestorsDepot.com All rights reserved.