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Category: Futures Trading

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!

Futures Trading Levels and Economic Reports for October 25, 2013

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

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1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Friday October 25, 2013

Hello Traders,

For 2013 I would like to wish all of you discipline and patience in your trading! 

 

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“LEVEX” will transmit alerts via text and/or email with potential buy and sell recommendations for different commodities along with suggested stops and profit targets. The alerts are based on technical analysis and using a computerized model developed by “LEVEX”.

Each day the program runs a market scan to look for markets that fit certain technical criteria / trade algorithm developed by LEVEX Capital management Inc. Once a market has been identified as a possible high probability set up, you will receive a trade alert with the trade idea.

Markets covered:

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Continue reading “Futures Trading Levels and Economic Reports for October 25, 2013”

Top Things to Consider When Choosing a Futures Broker

Posted on by Ilan

With many economists, researchers and traders calling for the next bull market in commodities, and you have disposable risk capital to take advantage of these potential trends you may be asking yourself – How can I begin my search for a solid reliable Futures Broker? I have included 9 items below that you should be cognizant of to assist you in finding a reliable partner for your commodity trading needs.

1. The Futures Brokers history

How long has the Futures Broker been in business? What is the commodity trading brokers regulatory history? you can check here by selecting BASIC then responding to the prompts to bring up a regulatory profile of the firms or individuals that you are interested in researching. http://www.nfa.futures.org/ Many times you will be able to find a nuisance regulatory issue and other times you may find regulatory actions that would cause you to pause. If you pause, move on to another broker as all legitimate Commodity Futures Brokers must be registered with the National Futures Association (NFA). if you can’t find your broker on the NFA website, you may not be dealing with a regulated entity.

2. Trading Platform choices

You would be looking for a Discount Futures broker if platform choice is critical to your trading strategy. Opportunities to use a variety of tools and risk management software to enhance your trading experience as an online, self-directed trader will vastly improve your traders toolbox. Preferably you will want to use a Discount futures broker that can offer a wide array of trading solutions software to execute your plan. Not all Platforms and Data feeds are alike and in this day of wifi and internet , the speed and accuracy of your software will be critical to your success, not to mention the bandwidth you will be piping into your computer.

Continue reading “Top Things to Consider When Choosing a Futures Broker”

Futures Trading Levels and Economic Reports for October 15, 2013

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

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1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Tuesday October 15, 2013

Hello Traders,

For 2013 I would like to wish all of you discipline and patience in your trading! 

Most Common Pitfalls To Avoid When Trading Futures-Commodity Futures

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500 experienced futures brokers were asked what caused most futures traders to lose money when comes to trading futures.

Their answers reflected the trading experience of more than 10,000 futures traders.  Download the PDF and find out what they said.

1.) Have a Plan

Many futures traders trade without a plan. They do not define specific risk and profit objectives before trading. Even if they establish a plan, they “second guess” it and don’t stick to it, particularly if the trade is a loss. Consequently, they over trade and use their equity to the limit (are under capitalized), which puts them in a squeeze and forces them to liquidate positions. Usually, they liquidate the good trades and keep the bad ones.

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2.) News Factor

Many traders don’t realize the news they hear and read has, in many cases, already been discounted by the market.

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3.) Trade Objectively

After several profitable trades, many speculators become wild and non conservative. They base their trades on hunches and long shots, rather than sound fundamental and technical reasoning, or put their money into one deal that “can’t fail.”

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4.) Know Your Size

Traders often try to carry too big a position with too little capital and trade too frequently for the size of the account.

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5.) Don’t Get Greedy when it comes to Trading Futures

Some traders try to “beat the market” by day trading, nervous scalping, and getting greedy.

Futures Trading Levels and Economic Reports for October 11, 2013

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Friday October 11, 2013

Hello Traders,

For 2013 I would like to wish all of you discipline and patience in your trading! 

Big upside move today in stock index futures.

The big question is : is this buy the rumor, sell the fact? is this just a relief rally on news that lack much substance?

The future will answer our question but in between anyone’s speculation can be right or wrong….

I think in the shorter term we need to see which is the path of least resistance first, the 1694 area or the 1681 level. We will probably get an answer to that tomorrow. Then we need to see the wider bands and what type of price action we get….Trading is definitely NOT an easy thing but if any of you found ways to make it easier, please share and I will try to spread the word!

EP - E-Mini S&P 500, Equalized Active Daily Continuation
EP – E-Mini S&P 500, Equalized Active Daily Continuation

Continue reading “Futures Trading Levels and Economic Reports for October 11, 2013”

Futures Trading Levels and Economic Reports for October 10, 2013

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Thursday October 10, 2013

Hello Traders,

For 2013 I would like to wish all of you discipline and patience in your trading! 

Short and to the point article written by my colleague, www.JimWyckoff.com  

 

Educational Feature: Dealing With Losing Trades

 

(Note: This feature is a favorite of mine, and I believe all traders need to address this issue every once in a while.)A main tenet of success in futures trading is the ability to accept losing trades as part of the overall trading process. This is not an easy undertaking–especially since many futures traders tend to be of a more competitive nature in the first place. Traders certainly don’t have to enjoy losing trades, but they must accept the fact and move on. Those who can’t accept the fact that losing trades are a part of futures trading usually don’t stay in the business very long.My wife is a school teacher, and one of her favorite acronyms–ADM–can be applied to losing futures trades. “Accept” it. “Deal” with it. “Move” on. (This is a part of the important psychological aspect of trading, and deserves much more discussion than I can provide in this feature.)I had lunch with one of my trading mentors a while back. We discussed losing trades. I asked my mentor how many losing trades in a row he has had to endure during his long and successful trading career. His reply was 13 in a row. I asked him how he coped with that. He said that while it was certainly not easy, he knew that losing trades are a part of the business and that he was in the business “for the long haul,” and that his trading methodology was sound. He added, “Ninety-percent of futures trading profits are made on 10% of the trades, which means most of the other trades are either small losers or break-even-type trades.” This is an important fact for all traders to keep in mind.My lunch meeting with my mentor was good for me because, even though we made no “break-through” discoveries on the path to increased futures trading success, we did reaffirm our own philosophies on trading and markets. My passion for trading and market analysis is fed immensely every time I talk with people in my profession, or attend the quality trading seminars.For many of you, the futures trading arena can be more fulfilling (and more fun) if you have someone, or some support group, with which to share your thoughts and strategies. If you are passionate about futures trading and markets, finding someone who shares that passion is a great trading tool within itself!That’s it for now. Next time, we’ll discuss another important issue on your path to trading success.

Continue reading “Futures Trading Levels and Economic Reports for October 10, 2013”

Futures Trading Levels and Economic Reports for October 3, 2013

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Thursday October 03, 2013

Hello Traders,

For 2013 I would like to wish all of you discipline and patience in your trading! 

I wrote this one before about different markets traders may want to look at for day trading or what I call “Day-Trading life outside of the mini SP”

Each market has different personality, different behavior along with different times of the day when it is most active. If you are finding that the ES is not giving you enough risk/opportunities then start monitoring a couple of other markets and perhaps explore them in demo / simulated mode.

I will try over the next few blogs to shed some light on other markets i think are suitable for day-trading along with what is unique about these markets, personality and most active trading hours.

Today I am going to start with interest rates, mostly the ten year and 30 year.

In most platforms, the symbols are ZB for 30 year bonds and ZN for 10 year notes. The current front month is December which is Z. So ZBZ3 for example.

Product Symbol ZB
Contract Size The unit of trading shall be U.S. Treasury Bonds having a face value at maturity of one hundred thousand dollars ($100,000) or multiples thereof
Price Quotation Points ($1,000) and 1/32 of a point. For example, 134-16 represents 134 16/32. Par is on the basis of 100 points.
Product Symbol ZN

 

Underlying Unit One U.S. Treasury note having a face value at maturity of $100,000.
Deliverable Grades U.S. Treasury notes with a remaining term to maturity of at least six and a half years, but not more than 10 years, from the first day of the delivery month. The invoice price equals the futures settlement price times a conversion factor, plus accrued interest. The conversion factor is the price of the delivered note ($1 par value) to yield 6 percent.
Price Quote Points ($1,000) and halves of 1/32 of a point. For example, 126-16 represents 126 16/32 and 126-165 represents 126 16.5/32. Par is on the basis of 100 points.
Tick Size
(minimum fluctuation)		 One-half of one thirty-second (1/32) of one point ($15.625, rounded up to the nearest cent per contract), except for intermonth spreads, where the minimum price fluctuation shall be one-quarter of one thirty-second of one point ($7.8125 per contract).
Contract Months The first five consecutive contracts in the March, June, September, and December quarterly cycle.

These contracts are often affected by many of the economic reports that come out at 8:30 Am Eastern and there is very active volume between the hours of 8 am EST and 3 PM EST

Volume on both contracts is very good. Ten years will often have 1 million contracts traded per day ( might be the second most active US futures market after the mini SP 500) and the bonds will avg. around 300,000 contracts.

These markets can experience very volatile movements during and right after different reports but then will often trade smooth or in an intraday trend the rest of the day.

Follow these two markets in demo mode for a while if you have not traded them before and get a feel for the movement, reaction to reports, execution etc.

If you have any questions, feel free to contact me.

Below is a 3 tick range bar chart of the US bond market or what i refer to as the 30 year bonds ZBZ3 from today

 

30 Year US T-Bonds
30 Year US T-Bonds

 

Would you like to have access to the DIAMOND and TOPAZ and 5T 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 the ALGO is enabled along with few studies for your own sierra/ ATcharts.  The trial comes with a 23 page PDF booklet which explains the concepts, risks and methodology in more details.

Continue reading “Futures Trading Levels and Economic Reports for October 3, 2013”

Crude Oil Guide: Brent Vs. WTI, What’s The Difference?

Posted on by Ilan

“U.S.-produced oil is a substitute, in terms of volume, to non-U.S. sources, and it’s geographically safe and secure, sending a hedge into the WTI price, not into Brent,” said Richard Hastings, a macro strategist at Global Hunter Securities.

Hastings made the comments when the price spread between the crudes traded at less than $1 back in July “Brent, in turn, reflects macroeconomic weakness from around the world, something which is less meaningful to WTI pricing,” he explained. 1

WTI (West Texas Intermediate), North Sea Brent and the OPEC (Organization of Petroleum Exporting Countries) Benchmark.

What Are the Major differences between these crude oil futures contracts?:

Sulfur Content: Some Crude oils are easier, less costly to refine into gasoline than others. Low sulfur crude is also known as Sweet crude. The commonly used measure of sulfur content is API gravity, is a measure of how heavy or light a petroleum liquid is compared to water. If its API gravity is greater than 10, it is lighter and floats on water; if less than 10, it is heavier and sinks. API is the American Petroleum Institute.

Continue reading “Crude Oil Guide: Brent Vs. WTI, What’s The Difference?”

Futures Trading Levels and Economic Reports for September 26, 2013

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Thursday September 26, 2013

Hello Traders,

For 2013 I would like to wish all of you discipline and patience in your trading! 

Slightly different note on today’s blog:

If you are currently trading a system or developing a system and need someone to auto trade it for you, I encourage you to contact us/ reply to this email and I will be happy to share how we can help. We are experienced brokers and follow the markets every day and are very capable of executing and auto trading variety of trading systems designed with different software.

We have in house the following platforms:

  1. CQG
  2. NINJA
  3. TradeStation
  4. TransactAT
  5. TradeNavigator
  6. Sierra

E-futures ( OEC) and more so if you have a system you like and do NOT want to spend all day monitoring it or if you developed / developing a strong system – let us know and will be happy to assist.

Continue reading “Futures Trading Levels and Economic Reports for September 26, 2013”

Important Factors When Choosing a Futures Broker

Posted on by Ilan

Choosing a Futures Broker can be somewhat of a daunting task. Most popular factors I see considered: cost, customer service, experience and knowledge. Going through the process of one’s own due diligence of researching your broker’s firm, trying a futures platform and comparing costs is a process one must take to find a broker that fits him or her.

Being a broker myself, I hear many concerns about cost before I even here about the type of future trading platform one would like to be set up with that fit his or her trading style. Please note cost should not be all when choosing a futures broker. Most reasonable and competitive commission quotes, for example the mini S&P cost less than half a tick. Unless you are trading high volume, less than half a tick should not hurt your account balance per round turn. When you look for “deep discount” commodity brokers, these brokers may provide you with an appealing commission cost but they may lack quality service and or even knowledge of the futures/commodities markets. This happens countless times in the industry; where clients will sacrifice service and knowledge of a broker for fifty cents less in commission because a lower commission cost seems to be more important for a client. Please be aware commission costs are only one ingredient of choosing a broker when trading futures.

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Futures Trading Levels

A more important component, I believe to be than cost when choosing a futures broker is customer service. Always note how long it takes your broker to respond for example to an email you send him or her. Does your broker respond in a timely manner? If your request was urgent did he/she give you the attention that’s required to solve the issue? These are very important factors one must consider when choosing a broker. If you, the client, end up with a commodities broker who is non responsive and not willing to help when the time is needed, there will be no value in you having a broker.

Look for the added values your broker can provide to help increase your success in futures trading, such as experience and knowledge. In my opinion, a great futures broker wants their clients to be successful in futures trading. Never be afraid to use your broker to pick his or her brain about the futures markets you are trading; go over strategies that you are using but may not be working for you. You choose your broker for a reason and your broker’s job is to service your futures account; be able to help you with your trading platform and every so often give his or her opinion of the markets you are trading if it’s asked by the client. In many “deep discount” firms, brokers seem to lack this type of service. I have seen many times where the client is left to figure out the platform themselves and are trading blindly because they lack direction from a licensed broker.

Although I agree that cost is a large component when choosing a broker, always consider the other factors such as customer service, knowledge and experience. Because if a broker lacks those three qualities but can provide you only cost, you may see your account having a shorter life span in the futures markets.

SPECIAL NOTE: 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.

A Quick History of U.S. Futures Trading

Posted on by Ilan

Futures contracts are one of the most important financial innovations in history, but they are often misunderstood. These contracts are used to transfer risk between different parties. Futures markets originated as a way for producers to stabilize their income and/or raw material supply amid market fluctuations, but it soon grew into a way for speculators to bet on the direction of a given commodity. These two market forces interact to create the futures markets that we know today and each plays a critical role in the market’s dynamics.

Forward contracts vs. Futures contracts

Before the North American futures market originated some 150 years ago, farmers would grow their crops and then bring them to market in the hope of selling their inventory. But without any indication of demand, supply often exceeded what was needed and unpurchased crops were left to rot in the streets! Conversely, when a given commodity – wheat, for instance – was out of season, the goods made from it became very expensive because the crop was no longer available.

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Futures Trading Levels

Continue reading “A Quick History of U.S. Futures 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.