1-800-454-9572 info@cannontrading.com

Support & Resistance Levels

This Blog provides futures market outlook for different commodities and futures trading markets, mostly stock index futures, as well as support and resistance levels for Crude Oil futures, Gold futures, Euro currency and others. At times the daily trading blog will include educational information about different aspects of commodity and futures trading.

Get Real Time updates and more on our private FB group!

Basic and Effective Strategies for Trading in Volatile Market Conditions

By Mark O’Brien, Senior Broker
It’s a well-known saying – attributed to John Maynard Keynes: “Markets can stay irrational longer than you can stay solvent.” Two conclusions you could derive from Keynes’ observation: 1.) timing any market is not practicable and 2.) using leverage in volatile markets calls for genuine caution.
We are in the midst of a remarkable display of volatility in nearly every commodity asset class and futures traders can find entering trades a formidable endeavor. The question of where to place protective stop orders becomes more of an informed guess than before these recent months.
But this should not deter traders from entering markets, because there are numerous strategies – by and large incorporating options – that can allow your trades to withstand persistent up-and-down price action.
One of the simplest and more common strategies for futures traders is the incorporation of a purchased call or put option against an associated short or long futures position. Depending on the option’s strike price and expiration date, the maximum risk to an adverse move in the market can be precisely calculated. In addition, the risk to an adverse move in the market during the option’s lifespan up to its expiration date – based on the futures contract’s price – can also be very closely calculated. At the same time, the position’s profitability can also be determined as a result of favorable market movement – over time and price.
This strategy has the important advantage of limited risk and price tolerability during adverse moves in the market that stop orders do not provide. The trade-off comes at the cost of the purchased option and its overall loss in value as a result of time decay during its lifespan as well as its loss in value incurred during a favorable market move for the futures contract.
Contact your Cannon Trading broker for additional information on this strategy and assistance in calculating a particular long option/opposing futures position to see if it relates to your trade style’s risk considerations.

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 when it comes to Futures Trading.

Futures Trading Levels

05-05-2022

 

 

Improve Your Trading Skills

Get access to proprietary indicators and trading methods, consult with an experienced broker
 1-800-454-9572 Explore trading methods. Register Here


Economic Reports, Source: 

Forexfactory.com

 

 

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 here in 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 judgement in trading.

Posted in: Future Trading News   | futures trading education  
Have A Questions? Open an account Free Demo Account Free Demo Account

Questions?

Valid first name is required.
Valid last name is required.
Phone number is required.
E-mail is required.
Message is required.
Phone (USA)
Phone (International)
Our Approach

You and your broker will work together to achieve your trading goals. We develop long term relationships with our clients so that we can grow and improve together.
Learn More About Choosing Cannon

Our Platforms

Please click on one of our platforms below to learn more about them, start a free demo, or open an account.
TransAct AT
E-Futures
Shogun Trade Executer
Firetip (Mac Compatible)

Trading Expertise As Featured In

Trading Tips You Can Use Right Away!


Watch 4 short videos on the topics of:
  • Using Bollinger Bands and Parabolics
  • Using range Bars for Day-Trading
  • The concept of Price Confirmation
  • How to Use Support & Resistance Levels
  • License 3 Broker at your Fingertips
Loading
Loading

Loading

Partners

Loading
Loading

Loading