5 Things You Must Know Before Trading Futures

so you want to trade Futures here are five things that you should know before you even start one of the easiest ways to prevent unnecessary losses is to just simply have your together before you start so many people jump the gun they see someone talking about something they see it on Tick Tock they see it on Instagram they see it on YouTube and they're like oh my gosh I could do that let's go they take the bare minimum steps they figure out kind of a broker they like okay let's put some money in let's go and they don't do it just a little bit of work ahead of time to get themselves set up before they start trading I think we've all been there to some degree but after this video in just a few minutes you're gonna have a really nice step-by-step process to get you set up and on the right track to start your own trading career let's just Dive Right In the first thing you need to do okay we're gonna ask the question what are you Trading talking Futures here in this video but there's a lot of different Futures that you could trade you want to trade the s p you trade in micros you trade in crude oil you trade in crypto trading Bitcoin Futures there's a lot of things that you can trade and I will tell you first hand when we start we think we can trade everything we think these patterns these things all these things are so easy they're going to apply over here over here over here and they certainly could but each product each market that you get yourself into it makes sense to have a little bit more background a little more understanding or at least some time on the screens the charts or at least spent researching and back testing before you start trading you know one strategy over here and applying it over here and over there but before I even get into that like what are Futures well Futures essentially are a derivative right the type of derivative contract agreement if you will and you're saying hey I I'm agreeing to buy or sell a specific asset commodity whatever it is security at a specified future date end time for a set price I guess date and time same thing for a set price one of the most popular exchanges will be CME Group many of you will probably be familiar or if you're not familiar look up CME Group just to understand what they're all about what they have available to trade because they've got a ton where that came from and then you'll want to have a brokerage platform that aligns and allows you to trade Futures and there's a ton out there we've got some videos here on the channel that have covered a couple different brokerage platforms there's so many out there it really there we can make a video covering maybe a top five or a top couple list in the future but it really comes down to just trial and error a lot of them are going to be very similar it just comes down to fitting your needs different fee structures different platform fees and all these different things do they allow you to trade what you want to trade so as we understand what we're getting into what Futures are why do people want to use them in the first place well there's really a couple different uses speculation I'm sure most of us as I say the word speculation you're like oh yeah here that's actually what it is we are legitimately speculating on price based off of a technical or a fundamental signal or whatever pattern or whatever we trade whatever Edge you want to call it we are speculating on price and we're going to be trading Futures contracts to capture larger gains than if I was to just you know buy the S P 500 and get a 0.25 move you know what I mean so that's we're gonna now bigger money hedge funds many times you'll see them actually use Futures to hedge like legitimately hedge their positions and whatnot in their portfolios so there's really like kind of like two ways to view it you can be the speculation guy which is looking to make money off of price action movements I think price is going to go up or down here because of this this and this I'm going to speculate take a position boom or you could be the Hedge player and use Futures to hedge portfolios number two context when we get into context we have to understand what markets we're trading like we kind of mentioned before so let's dive deeper into this right are we treating the s p are we trading crude oil are we trading the bond market if we know what we're in great we've got a framework we've got a starting point now let's dive into contract expirations when do the contracts expire and if for example you were to pull up CME Group and you said I want to trade the S P 500 futures pull up CME Group jump on through and they're going to have detailed information as to expiration dates and all that stuff so it's just a little bit of research it does not take very long but make sure you're aware of these things okay so when the time comes okay it's time to move on to the next contract that expires at this date because now we've reached the end of these okay just so you are aware of that going in on top of context there's news and data releases why this is super important because people overlook this like way too much and it's not that complicated but if you don't have an understanding to the news that drives this Market or that will affect price you shouldn't be trading in that market so for example there's different oil storage reports that come out so if you're trading crude oil or you're trading natural gas they have similar reports you need to understand when those reports drop and what times of day those reports drop because if you are in a trade and the report drops you can get some crazy volatility that could stop you out then go your way you just want to avoid that or maybe you don't want to avoid that but at a minimum you need to know when that's coming so you can prepare yourself for that trade for that event or for whatever you need to do ahead of time the next thing would be like for example if you trade the s p or the NASDAQ or the Dow if you're trading those markets and there's an fomc meeting or there's a press conference and Jerome Powell is speaking or there's jobless data that comes out or there's a CPI release you should be aware of those times and for example you can use the you know on marketwatch.com there's a U.S economic calendar great if I'm trading the US markets this is a great place to start because they're going to have dates and times for when all of these releases are coming out another one could be financialjuice.com they have different platforms different versions here but you can go in here and get a ton of information and a ton of news right here on financial juice so a couple sites to kind of get you going but again if your understanding of the market you're trading you'll have a pretty decent list it's not a difficult Google search away to find when the releases come out when big news drops and of course as you start to trade these environments and trade these markets you'll start to get a feel for what news moves things and what news does not okay so now let's get into the good stuff of the actual money but before we do so I do want to thank the sponsor of today's video jigsaw trading jigsaw trading offers Traders an edge in the markets through powerful and intuitive trading software with Advanced tools for order flow analysis visualization execution and advanced analytics and trade journaling jigsaw trading gives Traders a real-time view of Market activity and helps them make better informed trading decisions whether you're a beginner or an experienced Trader jigsaw trading has something to offer from their starter package to their professional package plus their team of expert Traders is always available to provide guidance and support take your trading to the next level with Jigsaw trading 14 day money back guarantee try it today thanks for jigsaw for sponsoring today's video alright awesome so let's get into number three that's money when it comes to money we need to understand the margin requirements so what does that even mean how much money essentially do you need to have in your Futures Trading account in order to trade the contracts that you want to trade so for example I know tradovate is a account that allows you to have like 50 bucks minimum in your account so one could trade with like 65 75 80 bucks in their Futures account and trade the micro e-mini s p futures or the micro mini Russell I believe are the two you could trade with that size and so you have to know per broker this is something that changes depending upon the broker but based on your broker as long as you know what the margin requirements are what is the amount of money that I need to have in my portfolio to place this trade okay and then what are they going to do if you hit a certain drawdown there are potentially fees with that so this is going to vary broker to broker I know for example that uh tradovate is one of the easier ones to get started for beginners because it doesn't require you to have a lot of funds invested or have a lot of funds in the account I believe tradestation would be like kind of another tier up where you could get started for like a couple hundred bucks and trade the micro mini S PS and then if you go to like let's say an interactive brokers I believe you have to have may have to have like two thousand dollars I don't quote me on that exactly and these numbers could change based on the broker but for example like those are things that you'll have to know ahead of time before you get in and start trading with the broker right so okay if you know you want to trade with interactive brokers and you have 500 hours well guess what you're probably not going to be able to trade with interactive brokers okay so I got to use this platform do I want to use that platform these are things you need to know going in and they're all easily accessible upon the brokerage platforms websites or it's a simple email away and many times I'll get back to you the same day you'll also find contract fees pricing which also is a factor because many not many almost everything is going to cost right so when you are trading Futures there will be fees think of it as like commissions kind of the same thing many U.S Equity Brokers these days do not have commissions so Weeble Robin Hood TD Ameritrade doesn't have commissions I believe for stock trades but that said there will be commissions and fees associated with future trading you're not going to get around that that will be part of the game building off of that Capital risk management comes down into the money category as well because you need to know how much you're going to risk so let's dive in or let's talk about the micro e-mini s PS for a perfect example if you are a beginner and you want to start trading the micro sign talking to the micros a lot because as a beginner if you're watching this video it's a good chance you haven't even gotten started or you're just brand new and the micro e-minis are great you can trade like micro crude oil micro s p like micro Bitcoin so you're not risking a ton of money on these trades for every one point move and inside of each point move there are like four ticks so you have a 0.25 0.5 0.75 and then the whole point on the My Career mini snps for every one point okay the p l will fluctuate five dollars so if I enter at 48.62 flat 48 62.00 and it goes one point higher 48 63.00 my and I was I was in a long position I would be now be up five bucks okay per one micro e-mini s p contract again pricing structure will change depending on what you're Trading but I need to know that again you can find that on CME groups website you can also do a quick Google search and the answer is right your fingertips depending on what you're going to trade backing into that now because we now know how much we could lose or make based off of a trade now we can back into risk management how much money I'm willing to lose on this trade and so on we got a visitor in the background oh and I think she's peeing yep potty training is going well here as you can see uh we were just outside you know what what am I going to do what am I going to do I can't I can't get mad okay let's build this deeper number four is going to be the trading plan here is where technical analysis risk reward comes in and then a systematic approach let's unpack it technical analysis this is not a technical analysis video we're not talking about techno analysis here however that's probably going to be a pretty big piece to your trading we've got plenty of videos on this channel that dive deep into technical analysis that also dive deep into different strategies indicators volume everything you want to know or a lot not everything a lot of stuff that you can go deeper into here other channels YouTube wherever you want okay that's a great piece to start with now we can actually build out our wrist reward profiles because if I'm taking trades based off of this pattern here's my stop loss that means I'm going to risk six points six times five I'm going to risk 30 bucks per contract that I trade Aid I'm going to look to take profits at 10 points okay great that's 50 bucks profit on the micro mini S PS great 50 bucks profit per contract I'm looking to make my risk is 30. that's a decent risk for a profile let's trade that and I say that because now it needs to become systematic we see the setup see the pattern have the trigger the requirements are met we take the trade and we're systematic about it we don't need to start saying I think I think this I think that and I'm going to try this and no that's not trading that's gambling that's guessing that's having fun messing around that's not training number five is actually trading okay I would highly highly recommend you try a demo account first why would that be important and what even is that you could get started with a demo account on almost any of the platforms the Brokers platforms out there that you can trade Futures on interactive brokers trade of eight I'm pretty sure tradestation go go and the list goes on and on okay you can also not even have to open a brokerage account go on tradingview.com there'll be a link to that in the video description box sign up for free go down to the trading panel open this up go to where it says paper trading connect that for free and trade Futures right here now if you want to go deeper you can pay for the platform we pay for the platform and stuff because there's a lot of perks to having the paid versions and then you can also pay for real-time quotes and that's a whole other story but you could do that we've got a video covering how to paper trade on trading view on the channel but I'd highly recommend you start on a demo account a paper trading account a fake money account just to take at least your first couple trades get used to the platform don't just randomly jump get used to the platform okay now that we're used to the platform great in a perfect world you traded for a couple of months prove profitability then go to real money not everyone's going to follow those rules not everyone believes that's the best way to do it that's just a recommendation but I'd recommend demo at a minimum because demo will be great to kind of just get things spinning make sure you know how to execute orders placing orders stop losses take profits great once you see how it works now you're not going to make stupid mistakes once you're live and have you know oh my gosh I didn't realize I put 10 instead of one contract now I'm over leverage and now I lost a ton of money and I didn't those things again are avoidable and that's the purpose of this video so hopefully this video helps you guys out if it does great hit the Thumbs Up Button consider liking the video sharing it with a friend check out the sponsor jigsaw trading with the link in the video description box as well as other resources and we'll see you in the next video peace

Channel: TC Trading

Views: 14,209

Keywords: TC Trading, Trading Tutorials, Trading, Futures Trading for Beginners, Introduction to Futures Trading, Futures Trading Basics, Beginner's Guide to Futures Trading, Futures Market Explained, Futures Trading Strategies, Learning Futures Trading, Futures Trading Education, Futures Trading Tips, Futures Trading Tutorial, Understanding Futures Contracts, Futures Trading Platform, Futures Market Analysis, Futures Trading Charts, Futures Trading Risk Management

Id: E2PZLNKZr44

Length: 16min 2sec (962 seconds)

Published: Thu Jul 13 2023