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Futures Day Trading

Updated on May 24, 2011

What is Futures Day Trading?

Day trading means the regular session during the day where most investment trades are conducted. It does not mean a calendar day, or a 24 hour period. Day trading refers to the period between the opening and closing of one particular market. Futures day trading usually ends at four PM on the stock market, after which it is called the after-hours trading. The fact that one market opens as another closes does not extend the day.

The only market that does not close is the Forex market. Futures day trading in the Forex market includes trades that are only a few minutes long. A trader may buy a currency at the close of one market, and then sell it within seconds of the opening of the second market.

The common denominator that every stock investors share is the lure of money. There is money to be made. Investors can make a steady income. However, day trading futures is not a fool-proof business. There are risks involved. It is always wise learn what makes everyone lose money before you start investing your own.

This is especially true in Futures Day Trading. It is not any promise of wealth that increases the risk. It is the practice of day trading futures without knowing what causes value to decrease. When a professional investor sells their stock, there is always someone who missed the indicators, set up a faulty signal, or let their emotions drive them. They buy futures unwisely and end up losing their money.

Overshooting is a common mistake in futures day trading. When you chose a strategy, stick to it until the end. Do not keep changing for something new, the next best strategy, the world’s best scheme. All strategies will work when used properly. No strategy will work against human error. Changing strategies will only cause confusion and result in losing more money in the end when day trading futures.

People misunderstand the concept behind futures day trading. In theory, a trader cannot lose their entire stake. The commodity exists. A commodity always has a buyer. However, when buying futures taking possession of the commodity is not easy.

Just because you are day trading futures and have some control over the outcome of your transaction, you can never be fully sure that you'll be banking a win. A lot of experts will give out forecasts about where the futures market is going, but none are extremely accurate. All trading is basically a gamble, so it's best not to put all your eggs in one basket.

Steps to Successful Futures Day Trading

To first step is to sit down and write out your goals. Think of this as a marketing plan, or a business plan. Include budgets and projections.

  • Are you futures day trading to generate profits?
  • How much do you expect to make each month?
  • Are the goals realistic, mathematically?
  • How much time can you invest in day trading futures?
  • How much money can you invest?
  • How much can you risk on futures day trading?

What separates professionals from the novices is that the former have greater emotional control when the heat turns up. Remember, the market is unpredictable and no matter how much of an expert you say you are at it, there is no 100% fool-proof strategy to ensuring a win with futures day trading.

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    • profile image

      jen 6 years ago

      Awesome hub. I am not a expert trader but i can figure out that you have really good information about market conditions and recent trades. Thanks for sharing valuable information.

    • Julie-Ann Amos profile image

      Julie-Ann Amos 8 years ago from Gloucestershire, UK

      Ah, I'm not a former trader rb11 - I worked in investment banking for years but in Inhuman Resources. But they shipped me to the US to do my investment banking courses anyway so I've done all the theory and ghostwritten a lot of books on trdaing etc. I know all my charting and candlesticks etc very well and did trade for years for myself until years ago now the tech stocks crashed and I lost most of my portfolio overnight, as did everyone else!

    • Uninvited Writer profile image

      Susan Keeping 8 years ago from Kitchener, Ontario

      Excellent hub and great explanation of a very dry subject :)

    • rb11 profile image

      rb11 8 years ago from Las Vegas

      As a former trader you know that trading is news driven, then gyrates on greed and fear. The most common mistakes among amateur traders is money management, laying to much at one time. The other mistake is dipping into margin, the big brokerage houses can hold out for weeks when a position goes bad, an individual most times can't, thus is forced to tap out. This aspect is almost as important as the trading strategy itself. Keep informing the public, it's a good service.


    • wrenfrost56 profile image

      wrenfrost56 8 years ago from U.K.

      Hi Julie-Ann, another great hub, I love catching up with your work. I always learn something new or they make me giggle. Look forward to reading more.

    • Julie-Ann Amos profile image

      Julie-Ann Amos 8 years ago from Gloucestershire, UK

      Hi - yes I do - just follow the arrows above to navigate the trading hubs and I have quite a few more to come getting ready to publish.

    • emievil profile image

      emievil 8 years ago from Philippines

      I'm an accountant but for the life of me, I'm having trouble understanding futures, derivatives, and stuff. Thanks for this hub Julie. I'm just wondering, do you have any other hubs about this topic or derivatives in general? So that I can also read them. Thanks!