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Look To The Futures Market For Day Trading Ideas
Buying and selling the futures markets is similar from a chart perspective as buying and selling the stock market. The primary distinction is the futures markets are naturally leveraged (modest amount of funds controls a relatively significant investment). Still if you use margin on stocks, traders don't accomplish the leverage of the futures market. This is what tends to make the futures markets appealing as a day trading vehicle, or as a swing trading vehicle. Seldom do people hold futures investments for the long term - at most the bet might be a number of months.
If all you would like to do is day trading, then the futures markets really should be on your list to consider. If you have the SEC needed $25000 bare minimum to day trade stocks, then you can simply day trade some futures also by opening a futures account. There is usually somewhat more volatility day trading in the futures markets than in the stock market, and this can grant some great possibilities. Most futures companies will ask that you put up approximately $5000 initially to open an account, certain brokers might be higher. Intraday required margin to trade a contract or two are typically much less than the overnight margin requirements. The reason being overnight there can be large gaps in price brought on by news events and you are required to maintain enough cash in their account to cope with that level of volatility. Furthermore, it will be possible if you maintain futures overnight (or even intra-day if you do not utilize stops) to have your account go into a debit balance as a result of the leverage. Most brokers will in no way let this occur and will close out all your positions prior to this happening. This type of event is a possibility and the risks should be understood. Intraday it is uncommon, but overnight it can happen with greater frequency.
While these hazards should not be ignored, they should not stop you from thinking about trading futures either if you are a day trader. From a technical standpoint, trading the futures markets is very similar to day trading the stock market, with the exclusion that there are not any "news events" on the futures such as analyst upgrades or downgrades to concern yourself with. Global financial events and news items happen all the time, and these affect both index futures and stocks who trade off the futures, so this is nothing new. There are many places now where you can get a no cost demo account to practice day trading the futures markets. If you discover that you benefit from doing it, consider adding the futures markets to your current trading.
The futures work very well for trying out a day trading robot, because greater volatility. The futures markets are often a good choice for any form of auto trading robot because they tend to be more held in a range than stocks. While an individual stock can run from 10 to 200 in a few months of time, the futures markets do not have this big a push, although they do trend up and down over months of time.
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