Futures trading is done by two main parties, one of which is the hedger and the other one is the speculator. Where a speculator is there to trade for either their own accounts or that of their clients, a hedger always uses futures as a possible protection from losses. Hedgers can also be described as individuals or business owners who are more risk averse. Speculators and hedgers are likely to benefit from futures trading if the trader has a strong ability to analyze the markets and understands that future behavior. Though futures can behigh risk, they offer an equally high return and are thus very tempting.
In case you are new to futures trading you need to understand how things work. We at Cannon Trading are there to help with your understanding of all the elements of futures trading and also counsel and advise you with the same. Our knowledge base featured on our website, is a store house of information. In order to know every aspect of futures trading, you must read through these articles that have been listed in this category archive. Go through it and get better informed!
Cannon Trading / E-Futures.com
I got a short term sell set up on SP 500 as you can see in the daily chart below of the SP500 ( pit session or day session only)
Potential levels if selling pressure resumes tomorrow for your review below as well as possible upside targets if this turns out to be just a small break from the recent rally…. Continue reading “Futures Trading Levels, Short Term Selling on the S&P”
Cannon Trading / E-Futures.com
Wishing all of you a great weekend and successful trading month in May.
Below is some worthy reading material for the weekend.
RISK
It is a four letter word. As traders it is something that we thrive on and dread. We chase and fear. We look for and look to avoid. It is RISK. Without it, there is no opportunity for profit. Without it trading lacks potential. With it, failure and heartache are the consequences when it is abused.
Risk itself is not a bad thing. When it is misused by traders, it becomes a problem. Controlled risk presents traders with exciting and profitable opportunities. Uncontrolled, it brings the end to the dreams and careers of many traders.
How should we as traders confront risk? The first step is to respect it. Realize the damage it can do to our account equities when it is abused. The two most important tools that we have to control risk are stops and position size. Oh, I know, you hate stops. We all do. We have all been stopped out at the high or low only to see the market immediately move in the direction that we thought it would. But without using stops on every trade that we enter, disaster will eventually prevail. I have a love/hate relationship with my stop orders. I hate to place them, but love how they save me from large, unacceptable account crushing losses. It is the same for all successful traders. Those foolish enough to trade without stop protection are risking disaster on every trade. Unless you as a trader have developed perfect discipline to exit a losing trade quickly, and according to your pre-entry criteria, stops are mandatory. And admit it, at least to yourself…..do you have perfect discipline? I think not.
The other critical element in controlling risk is position size. By this I mean the percentage of your equity that you are risking per trade. I do not risk more than 3.5% of my equity on any trade. Some traders are comfortable risking 5% of their equity. This amount for me is an amount of risk with which I am comfortable. It allows for aggressive trading, and it allows me to stay in the game ( financially and psychologically) even after a series of losses. This aspect of strategy building is often forgotten by the novice trader. These folks have dreams of “the big hit” or the monster trade that allows their account equity to soar to heights unimagined by mere mortals. The problem is, oops, what if you are wrong? This type of trading/thinking is out of control. It leads to broken dreams and short careers. You must always remember that this is a highly volatile, sophisticated business. Treat it as such. If you want to gamble, jump on an airplane and visit Las Vegas.
The futures markets are highly leveraged, as we all know. Those traders that abuse risk by not respecting its power will eventually join the long list of former futures traders. Risk must be treated like a beautiful, intelligent woman. Treated with respect, wonderful things can happen. But, abuse it, or disrespect it, and suffer the consequences.
As a futures trader you have to embrace taking risk. Understand its impact. Respect it. Stay in control of it. Develop a trading method that makes risk an asset to your account instead of an enemy of your account. Risk/reward analysis is an important part of our everyday lives. Can I make it thru the intersection before the light turns red? Do I need to re-apply my sunscreen? Should I have one more beer before driving home? In trading, always keep in mind your risk versus the reward. A 50% gain in your account is not equal to a 50% loss of equity. A 50% winning trade puts you up by one half. But a 50% loss means that you have to double your equity to get back to your starting point. Respect your risk levels. Trade only using a risk level that you, personally, are comfortable with.
Rome wasn’t built in a day. Neither will your account be built in a day, or a week. Respect risk. Enjoy it’s benefits and your trading in rest of this year and in 2011 will produce profits and satisfaction. Enjoy the ride.
IMPORTANT PLEASE NOTE: TRADING COMMODITY FUTURES AND OPTIONS INVOLVE SUBSTANTIAL RISK OF LOSS. THE RECOMMENDATIONS CONTAINED IN THE LETTER IS OF OPINION AND DOES NOT GUARANTEE ANY PROFITS. THERE IS NOT AN ACTUAL ACCOUNT TRADING THESE RECOMMENDATIONS. THESE ARE RISKY MARKETS AND ONLY RISK CAPITAL SHOULD BE USED. PAST PERFORMANCES ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
For more on risk, trade management, trade set ups, technical indicators and more, sign up to have 2 weeks complete free access to my daily chart service where I share charts, signals, trading philosophy and more. Sign up at:
Daily live chart service Continue reading “Futures Trading Levels, Weekend Reading on Risk”
Cannon Trading / E-Futures.com
Last trading day for April is tomorrow…..while the last few months have shown that statistically, the market goes up the last couple of trading days, I am going to take a stab and look for the market to pull back if we can break below 1352 during the pit session….
60 minute chart of the BIG SP 500 ( the “pit session” ) for your review below with potential levels to watch if we do pull back. On the way up , I have 1362.75 as first resistance , followed by 1372. Continue reading “Futures Trading Levels, End of Month Statistical Trends”
Cannon Trading / E-Futures.com
Weekly newsletter along with free access to SP500 squawk box at:
Cannon Trading Inc. Weekly Newsletter.
Daily chart of mini Russell 2000 ( which I currently see as the leader of Indices as far as price action) below with potential upside and downside levels: Continue reading “Futures Trading Levels, Mini Russell 2000 Leads Indices; Newsletter”
Cannon Trading / E-Futures.com
Hope everyone enjoyed a nice, long weekend/ holiday!
Full week ahead, many reports including much anticipated FOMC this Wednesday, so be ready for volatile action in many markets.
Below you will see a short video taken from trading session last week during my daily live chart service, that can provide a glimpse into what the service entails:
During this daily sharing of intraday charts along with possible buy and sell set ups, I review the MINI SP 500, the crude oil futures and the euro currency. I go over some money management rules, trade set ups , trading philosophy and more.
If you have not had a trial before and would like to view what this service has to offer for you a s a trader, please sign up for free 2 weeks trial at the Cannon Trading Live Webinar site.
Current market in the news: SILVER….almost hitting the major $50 mark overnight, silver along with other metals and commodities in general experiencing higher volatility. Below is a daily chart along with some levels to watch. In the same subject, margins on silver have increased, new initial margin is almost$13,000. More at: CME Group Silver PDF
Note today’s HIGH volume, also making a new high but closing below the opening price. Price action in this market will be interesting to watch!
Cannon Trading / E-Futures.com
Wishing all of you a great long weekend and happy Easter. Markets are closed tomorrow, April 22nd in Observance of Good Friday.
Full schedule at the Cannon Trading Inc. Weekly Newsletter released on April 20th.
The CME Group report in PDF form also has the complete schedule.
Below you will see a link to a short video taken from yesterday’s trading session during my daily live chart service.
During this daily sharing of intraday charts along with possible buy and sell set ups, I review the MINI SP 500, the crude oil futures and the euro currency. I go over some money management rules, trade set ups , trading philosophy and more.
If you have not had a trial before and would like to view what this service has to offer for you a s a trader, please sign up for free 2 weeks trial at the Cannon Trading Live Webinar site. Continue reading “Futures Trading Levels, Daily Live Chart Service Demo”
Cannon Trading / E-Futures.com
and CME Group Holiday Schedule report in PDF form.
Cannon Trading / E-Futures.com
Market in the news today (and actually for last few weeks/months….) is gold. Hitting the psychological level of $1500. Below is daily chart along with possible levels if we continue higher and possible levels if we witness profit taking. Continue reading “Futures Trading Levels, Gold Reaches Psychological Level of $1,500”
Cannon Trading / E-Futures.com
We witnessed some volatility in the markets today after SP comments “downgrade of US debt”. I think volatility is here to stay for a while longer…..
Below you will see a daily chart of SP500 with possible levels of support and resistance. I think if the late session bounce stays below 1304 to 1313, then we can resume the developing short term down trend with next targets at 1279 and 1266. Wishing you good trading rest of the week! Continue reading “Futures Trading Levels, Volatility After S&P News”
Cannon Trading / E-Futures.com
May crude contracts rose 83 cents, or 0.8%, to reach $107.91 a barrel on the futures trading floor of the NYMEX after starting the day off negative. Gasoline contracts for May delivery lost 1 cent, or 0.3%, to reach $3.23 a gallon.
This and other news stories may be found at the Cannon Trading News Center Continue reading “Futures Trading Levels, Feature: the Cannon Trading News Center”
