1. Trading 201: Day Trading Using fear and greed ( using Crude Oil futures as an example)
Crude Oil Futures volatility offers a "different market personality" than stock index futures. Here is some of the things you need to know about day trading crude oil futures:
By: Ilan Levy-Mayer, Cannon Trading Commodities Broker & VP
Crude Oil is one of MY favorite futures markets for day trading. Before I dive in and share with you how the volatility in crude oil fits my risk tolerance for day trading and provide a couple of chart examples, we should review some of the specifications of Crude Oil Futures.
Crude Oil Futures have monthly expirations. So each month we trade a different contract month, so one needs to know when the first notice day and last trading day for crude oil futures are, in order to always make sure we are trading the proper month with the most liquidity and avoid any chance of getting into a delivery situation.
Next is the contract size. Crude Oil futures are based on 1000 barrels. To be honest from a day trading perspective all I care is that each tick or 1 cent fluctuation is $10 against me or in my favor per contract. That means that a move from 92.94 to 92.74 = $200.
Another factor is trading hours. At the time I am sharing my thoughts with you, April 8th 2013 ( I wrote this one a while back but the examples and logic are still very current!) , crude oil futures trade on the CME Globex platform and trade from 5 PM CDT until the next day at 4 PM CDT. That is 23 of straight trading hours. I definitely don't recommend day trading this market 23 hours...but it is good to know the trading hours.
Volume in crude oil futures is pretty good to trade in my opinion. Averaging about 300,000 contracts per day.
One last pointer to touch on is the EIA (Energy Information Administration) report that normally comes out Wednesday at 9:30 CDT (on short weeks, holidays etc. , this report will be pushed to Thursday at 10 AM CDT). I tell my clients that this report is way too volatile and I like to be out 5 minutes before and not resume trading 5 minutes until after the report comes out. This report by itself deserves a writing but on short, the report provides information on how our stock pile is doing ( = supply/demand) and the market will move based on the numbers versus what was expected. Again as a day trader, your main job is to know about this report, when it comes out and in my opinion stay out of the market during this time...
Read the rest of the article along with chart examples, specific trade set ups and other trading tips which can be applied to many markets not just the crude oil market
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2. Hot Market: Soybean Bulls Are Off and Running; Corn and Wheat Supported
The soybean market is off on a bull run and has left corn and wheat behind. July soybeans hit a 20-month high this week as a steep price uptrend is on place on the daily bar chart.
The big bull move in soybeans is likely to provide upside pressure on corn and wheat prices, in the coming weeks.
Remember that this is the planting and growing season for U.S. corn and soybeans, which means higher price volatility is likely due to the likelihood of weather scares quickly popping up over the next three months.
7:30 AM CDT - Empire Manufacturing(May)
9:00 AM CDT - NAHB Housing Price Index(May)
11:00 AM CDT - NOPA Crush
3:00 PM CDT - Net Long-Term TIC Flows(Mar)
FN: May Lumber(CME)
LT: May Eurodollar(CME)
May Mx Peso(CME)
May Eurodollar Options(CME)
Jun Sugar-11 Options(ICE)
7:30 AM CDT - Building Permits & Housing Starts(Apr)
7:30 AM CDT - Core CPI & CPI(Apr)
8:15 AM CDT - Capacity Util & Industrial Prod(Apr)
LT: Jun Crude Lt Options(NYM)
6:00 AM CDT - MBA Mortgage Index
9:30 AM CDT - API & DOE Energy Stats
1:00 PM CDT - FOMC Minutes
2:00 PM CDT - Dairy Products Prices
LT: May Coffee(ICE)
Jun Platinum Options(NYM)
Jun Palladium Options(NYM)
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly
7:30 AM CDT - Philadelphia Fed(May)
9:30 AM CDT - EIA Gas Storage
2:00 PM CDT - Milk Production
3:30 PM CDT - Money Supply
9:00 AM CDT - Existing Home Sales(Apr)
2:00 PM CDT - Cattle On Feed
LT: Jun Crude Lt(NYM)
May Nikkei Options(CME)
May S&P 500 Options(CME)
May E-Mini Dow Options(CME)
May E-Mini S&P 500 Options(CME)
May E-Mini NASDAQ Options(CME)
May Russell Options(CME)
Jun 2,5,10 Year Notes Options(CBT)
Jun Bonds Options(CBT)
Jun Canola Options(CBT)
Jun Wheat Options(CBT)
Jun Corn Options(CBT)
Jun Oats Options(CBT)
Jun Rough Rice Options(CBT)
Jun Soybeans,Soymeal,Soyoil Options(CBT)
Jun Orange Juice Options(ICE)
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!
RISK DISCLOSURE: Past results are not necessarily indicative of future results. The risk of loss in futures trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.