Futures Day Trading 101
A lot of research has been done on the effect of expiration on stock futures. For example, Suliga and Wojtowicz (2019) conducted an extensive analysis on the subject. One of the most notable findings was that speculative changes to the underlying assets are typically temporal in nature. On the flip side, the rational investor is more interested in an incorrectly priced asset. The result is that intraday trading becomes more intense close to the 5-minute mark. This is a good thing for pros, but it can be a bad thing for novices.
As with any type of futures trading, a few tricks are kept in mind. For instance, the effects of expiration on volatility are often weakened in the hours leading up to the delivery. Likewise, the new rules for short selling on the WSE have attenuated the volume effect. Another trick is the ability to exit positions by 11am. It's no secret that professionals are looking for decent moves. But this doesn't mean that the average Joe is not able to take advantage of these opportunities.
A more thorough analysis of the data reveals some noteworthy statistics. For example, the true reversal day gets going at around eleven o'clock in the morning. A more robust study of the same data reveals that the biggest movers and shakers occur during the last two years of the sample. There is also a correlation between the price reversal and the number of speculative IPOs during the same period. These factors suggest that the sex of the marketplace is skewed towards the savvy investor.
While the results show that the price reversal effect is not without merit, the effects are still limited to a handful of specific commodities.
Order flow is still valid in futures trading strategies
Order flow is a tool that many traders use in order to better understand the market. It shows the amount of buy and sell orders that are waiting to be executed at a given price point. Traders can use this information to determine whether prices are moving upward or downward. They can also see which resistance and support levels are relevant.
Order flow is also a useful way to predict short-term changes in prices. In order to do this, traders need to know the imbalance in supply and demand. When more sellers than buyers are willing to buy, the price moves lower. Similarly, when more buyers than sellers are willing to sell, the price moves higher.
Order flow is a crucial tool for professional traders. During periods of high volume, the market is likely to experience heightened activity, which can result in higher prices and enhanced volatility. As such, accounting for this spike in order flow is a prudent risk management strategy.
Order flow also helps traders identify areas of greater risk. This can be done by observing the depth of the market window. A deep market window indicates that prices are attracting more traders. Often, this results in a more profitable trade. Also, it indicates a trend correction.
Trading with order flow may seem intimidating to many novice traders, but it is actually an effective tool for learning about the market. Traders can learn how to identify a market's direction and avoid hunting for trades.
Understanding the depth of the market window can help traders identify opportunities for more profitable trades. The higher the volume of traded orders, the deeper the market.
Institutional and retail participation is a common phenomenon in the futures market. During periods of breaking news or political conflict, traders can expect to see a large influx of institutional traders. These traders often purchase when asset prices are below average. However, they will sell when prices are above the average.
Avoidance of slippage
During futures day trading, avoiding slippage is important. Slippage occurs when the bid price moves lower or higher than the ask price, or the execution price of a trade is lower or higher than the intended cost. Generally, slippage is associated with higher volatility and fast moving markets.
There are several ways to reduce or eliminate slippage. The first is to avoid high volatility periods. Second, you can use limit orders to ensure your assets are purchased at the desired price. Third, you can follow the appropriate exit and entrance points. Finally, you can adopt a “day-to-day” approach to avoid large deviations in your expected and actual trade prices.
Using the appropriate trading methods can prevent slippage, but there is no way to eliminate it completely. Instead, you can accept it as a trade-off, and mitigate its effects by using the right market timing techniques and proper order placing practices.
One of the best ways to avoid slippage is to trade during non-peak hours. Peak hours are defined as times of high liquidity, which increases the chances that your order will be filled. Also, avoid trading during news-related periods, when liquidity is at its apex.
In addition to these strategies, you can also use the stop-loss function on a trade. This means your trade will close if the price of the asset reaches a specified level. If your broker is unable to fill your order, your order may be refilled at the next-best available price, which can be a better solution.
While there are many ways to minimize or eliminate slippage, the following are the most practical.
First, the most obvious is to know your exit and entry points. Secondly, use stop-limit orders to eliminate unwanted discrepancies. Finally, adopt a “day-to-day” strategy to minimize the impact of slippage.
Find a live futures trading webinar
If you're a beginner, or just interested in learning more about futures trading, then one of the best ways to learn is through a live futures trading webinar. These are essentially live online seminars that provide attendees with access to expert traders who explain trading concepts and techniques. A webinar is usually divided into two parts: the first provides an introduction to futures trading, while the second offers more in-depth market analysis and strategies.
The best way to find a live futures trading webinar is to search through a company's website. Many companies have webinars that cover various topics, such as how to read charts, or the advantages of futures trading. In addition, some companies even offer VIP members access to their live trade room. Here, you'll get to hear traders' interviews and watch videos of other experienced traders. This will give you an idea of what they're doing in the market, and how they choose their positions.
One of the most popular webinars in the futures industry is offered by cannon. This is a company that hosts webinars on a wide range of topics, from how to day trade futures to how to use technical indicators. To sign up, you'll need to have a valid email address and phone number, and you'll need to register soon. After that, you'll be able to sign up for the live futures trading webinar that's held once a month. You'll receive an email notification when it's scheduled, and you'll be able to join the live trade room on your computer.
For more information on cannon's webinars, you can check out their website. You can also find out what others are saying about them by checking out their reviews
Olga Steiner
https://financeworld.io/!!!Trading Signals And Hedge Fund Asset Management Expert!!! --- Olga is an expert in the financial market, the stock market, and she also advises businessmen on all financial issues.