What are the Best Tips for Day Trading Futures?

Ron Davis
Ron Davis
The most important thing for day trading futures is using a working algorithm or methodology.
The most important thing for day trading futures is using a working algorithm or methodology.

Day trading futures can be a successful investment endeavor if the trader adheres to a few basic tips. A working algorithm that has been proven by paper-trading methods is key. The trader's personal finances and stress tolerance should be considered. Spending time analyzing trades can increase the trader's knowledge of trends. Forming positive personal relationships with others and staying realistic can also assist in successful trading.

The most important thing for day trading futures is using a working algorithm or methodology. No investor can make money if they are constantly losing money. If a trader is unsure whether an approach works, she can open an account with an on-line broker who has a paper-trading facility. A trading method must be successful in paper-trading for it to be successful in real time trading. Spending time analyzing past trades is an excellent way to notice trends in the market and predict future trades.

Most people have to adjust to the stress of real-time trading, which entails winning and losing real money. The trader should have enough money in her bank account to live for several months without making a profit trading. She also should keep her per trade risks in line with her bank account. A rule of thumb is to risk no more than 2% of the trading capital on any one trade. Many traders withdraw a fixed fraction of trading profits each month, and this practice not only pays bills but also helps to keep confidence up and stress down.

Day trading futures requires the trader be in good form every day she trades. To that end, she will want to maintain her physical health with regular physical exercise. Maintaining a balanced diet, avoiding or imbibing only moderately in alcohol, and practicing meditation may help the trader stay alert. Taking good physical and mental care of the body will help the trader deal with the stress of day trading.

Most traders find it useful to stay positive and realistic. Day trading futures when she is ill, fighting with her significant other, or functioning below par for whatever reason can result in long-term negative financial impacts. The trader will need to be realistic about how much capital she will need. Few traders earn as much as 20% per month, so the wise trader will not expect to support a large monthly living cost on a small amount of trading capital.

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    • The most important thing for day trading futures is using a working algorithm or methodology.
      The most important thing for day trading futures is using a working algorithm or methodology.