Here is a subject that a lot of people don’t understand at all. Day Trading can be risky. So, it is something that you should stay away from unless and until you are absolutely sure about what you are doing.
There are a number of items about Day Trading such as the minimum mantaince requirementand more that need to be taken into consideration. With the blogs and write-ups listed in this section, you can learn a great deal about day trading.
We at Cannon Trading can help you understand the different concepts of trading and present you with the latest information on the same. Our team of professional and smart people can help you in your day trading transactions and more. In order to understand day trading more clearly, we advise that you go through all the write-ups listed in this category archive on Day Trading.
The recent sell off and volatility in crude oil grabbed many headlines these past few months.
Crude oil has been one of my favorite markets for day trading over the last 10 years or so because of it’s volatility and the fact that it either rewards you or punishes you very quickly…
I wish you and your family a happy, healthy 2015 and of course a successful trading year in 2015!!
Hello 2015….Volatility and downside pressure are the dominate force to start the new year, however we have seen this before more than a few times in the past only to witness the market rally fast and big within days….The million $$ question,: Is this correction any different or is this a buying opportunity….Must admit I have no clue…..
I think a break below 1978 can trigger a move down to 1909. If the market can hold and stay above 1978 we may see a run back towards 2046.
Regardless of this medium term outlook, the main thing for most of you day traders out there is that volatility is back, the pressure is now even going both ways (long and short), the ranges are wider, the moves are faster and one needs to adjust their day trading accordingly.
Daily chart of the mini SP 500 for your review below:
EP – E-Mini S&P 500, Equalized Active Daily Continuation
The FOMC interest rate decision is due at 14:00 ET in the US tomorrow ( Wednesday, Dec. 17th ).
FOMC days have different characteristics than other trading days. If you have traded for a while, check your trading notes from past FOMC days that may help you prepare for tomorrow.
if you are a newcomer, take a more conservative approach and make sure you understand that the news can really move the market.
The following are suggestions on trading during FOMC days:
Reduce trading size
Be extra picky = no trade is better than a bad trade
Choose entry points wisely. Look at longer time frame support and resistance for entry. Take the approach of entering at points where you normally would have placed protective stops. Example, trader x looking to go long the mini SP at 1965.00 with a stop at 1959.00, instead “stretch the price bands” due to volatility and place an entry order to buy at 1959.75 and place a stop a few points below in this hypothetical example.
Expect the higher volatility during and right after the announcement
Expect to see some “vacuum” ( low volume, big zigzags) right before the number.
Consider using automated stops and limits attached to your entry order as the market can move very fast at times.
Know what the market was expecting, learn what came out and observe market reaction for clues
This is another great example why a trading journal would be an asset, as you can go back and check your notes from previous FOMC days.
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 market 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 expiration. So each month we trade a different contract month, so one needs to know when is the first notice day and last trading day for crude oil futures in order to always make sure we are trading the proper month with the most liquidity and avoid any chance of getting into delivery situation.
Next is the contract size. Crude Oil futures are based on 100,000 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.
One way to eliminate fear and greed while day-trading:
Disclaimer
The methods described in this article are for educational purposes only. Past results are not necessarily indicative of future results. The author and the publisher assume no responsibility for your trading results. Trading involves a high degree of risk. No recommendation is being made to buy any stock, commodity, option or other financial instrument. Consult your financial advisor before starting any investment system.
It is a known fact that fear and greed can be one of your worst enemies.
One way I found that helped some clients to deal with the fear and greed and its related cousin, “getting out of winners too soon and staying in losers too long…” is entering multiple contracts when getting into a day-trade.
Obviously, one has to have the appropriate risk capital, margin requirements to do so but the advantage of trading more than one “unit” or splitting your trading size into two or more parts is as such:
If you enter a trade with one contract ( or if you are treating your trading size as one unit, meaning you enter a trade with 4 contracts and exit the trade with 4 contracts, that is considered treating your trading size as one unit), you can face a very quick dilemma, especially when day-trading. You get in and very quickly you are up 2 mini SP points….what do you do? Do you take profit? Bring your stop loss closer? How do you avoid getting out too early or too late?
Today’s action in stock indices was quite impressive! The volatility we are now seeing is so different than what we witnessed 2 months ago it’s almost like we are trading a completely different market!
We had almost a 50 point range on the SP today!! Much different than the 8-12 points range we saw couple months back….This calls for you as a trader to adjust, researched and be aware of the market conditions you are trading in.
The market is moving much faster. I was watching the DOM today off and on and the speed of the moves was extreme.
When volatility expands I have the following tips:
Reduce trading size
Be extra picky = no trade is better than a bad trade
Choose entry points wisely. Look at longer time frame support and resistance for entry. Take the approach of entering at points where you normally would have placed protective stops. Example, trader x looking to go long the mini SP at 1925.00 with a stop at 1919.00, instead “stretch the price bands” due to volatility and place an entry order to buy at 1919.75 and place a stop a few points below in this hypothetical example.
Consider using automated stops and limits attached to your entry order as the market can move very fast at times.
Time sure does tick a bit different in the commodities and futures world….
Some traders know time has passed quickly when it is time to change to the Dec. contract versus the Sept. contract, others may notice it when they think “wow, monthly unemployment is this Friday, time sure flies…” and still other traders, perhaps professionals and money managers notice it when one month ends and another starts and it is time to share monthly results with their clients…..
Either way you look at it, hope October will be a great trading month!
Today I noticed a couple of market behaviors I have noticed in the past and wanted to share with you.
The first is us Bonds trading behavior on the last trading day of the month on the last 15 minutes of the old pit session, i.e. 13:45 to 14:00 central time.
While I did not spend any time trying to predict the direction of the move, I seen it many times, the bonds will make a 10-15 ticks ( 15 tick in bonds = $500 per contract) move during the last 15 minutes as large traders position themselves ahead of months close.
Below is a 15 minute chart of Bonds from today….notice the very tight range all day long until the last 15 minutes….if you go back to the last trading day of the month, you will notice this pattern more often than not. Of course, I leave the important work to you…and that is which way and how can one try to take advantage of it….PS: My trade system below missed entering the short by 1 tick )-:
Custom USA – 30Yr US Treasury Bonds (Globex), Equalized Active 15Min Continuation
The second pattern for you to investigate if interested is the behavior of crude oil futures around “round numbers”. Today was obviously a HUGE move in crude ( down over $3 or $3000 per contract or 3.5%) but notice the 10 seconds chart I am sharing with ( yes, seconds, not minutes…) of what happened when crude broke below 93.00 and 92.00 today…..Once again, the million dollar question, how and can you take advantage of it? Obviously in this case it seems like there were MANY sell stops placed right below the round numbers which resulted in another accelerated move to the down side.
As of tomorrow make sure you are trading DECEMBER stock indices and CURRENCIES…..
I know many of you have read this one before but many others have not….
While it is not a “magic formula” I think the steps outlined should provide you the trader with some what of a base/ foundation of what you need to have in order to succeed in day-trading:
8 Steps to succeed in futures trading:
1. Education
Hopefully if you are already trading you have completed your initial education: contract specs, trading hours, futures brokers, platforms, the opportunities as well as the risk and need to use risk capital in futures, and so on. Understanding this information is essential to futures trading. The second type of education is ongoing: learning about trading techniques, the evolution of futures markets, different trading tools, and more.
2. Find a System
I am definitely not advising you to go on the web and subscribe to a “black box” system (using buy/sell triggers if don’t know why they are being generated). What I am advising is developing a trading technique: a general set of rules and a trading concept. As you progress, you may want to put the different rules and indicators into a computerized system, but the most important factor is to have a focus and a plan. Don’t just wake up in the morning and trade “blank.”
3. Survival
This is the key! Do what you need to do in order to survive this brutal business and give yourself the chance of being here down the road with more experience and a better chance of success. Survival is probably the biggest key for beginning traders. There is a saying in this business: “live to trade another day.” It is so true!
These last few days I actually “sensed” something in the market that I have not in a long time…The intraday short positions actually had a chance to win.
What I mean is with QE and FED policy of the last few years, it turns out that anyone trying to fight the FED and go short was simply blind (myself included) so while I think in the long term this balloon can be very loud when it gets poked…..in the short term the plays have been to buy the dips.
I am hoping that we are seeing real clues that this is changing and that “normal market factors” will dictate price action but I am sure the change will not be overnight as traders been conditioned since 2009 to be “scared” of the short side (with the simple pain of watching your short positions lose… )
So once again I am sharing my indicators/ ALGO which gave the first sell signal on the SP500 in a few months ( see chart below). If there is enough follow through we should see 1965 BUT simply read above
Would you like to have access to my DIAMOND and TOPAZ ALGOs as shown above
and be able to apply for any market and any time frame on your own PC ? You can now have a three weeks free trial where I enable the ALGO along with few studies for your own sierra/ ATcharts.
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.
ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NO INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.
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.
