Day Trading Futures
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With a 24-hour period, day trading futures can become fast and furious. Add lightning fast speed to the volatility of the stock market and one can readily imagine what it is like to trade from sunup to sundown. Day traders typically buy and sell futures, contracts to pay a certain amount for shares that might fluctuate wildly within minutes, hours or by the close of trading. To place orders, traders must not only be knowledgeable of stocks and commodities, but also experienced and confident enough to handle the added pressure of high-speed, high-risk investing. One wrong move and fortunes can be lost from one minute to the next, as emotions run high waiting to see actual prices commodities wind up selling for in the global marketplace.
Executions made by day trading futures must be lightning fast because the markets are subject to change with the weather, rumors of war, or other factors which determine or impact production. Commodities are products which are either grown or occur in nature. Soybeans, wheat, crude oil, livestock, and precious metals are all regularly traded on Wall Street. But the prices at which these products are bought and sold worldwide can fluctuate according to supply and demand. The supply of certain consumable goods is determined by the weather, international conflict, or other domestic and foreign economic indicators. If Iowa experiences abnormal droughts, farmers cannot grow sufficient amounts of wheat to supply the nation's consumers, particularly companies that depend on supplies to manufacture other products or to feed livestock. A shortage of wheat will result in a greater demand and a higher price, not only in the futures market, but also in the supermarket. In uncertain economic times, only God can sustain His people. "Give us this day our daily bread. And forgive us our debts, as we forgive our debtors. And lead us not into temptation, but deliver us from evil: For thine is the Kingdom, and the power, and the glory, for ever. Amen" (Matthew 6:11-13).
Day trading futures in wheat or any other commodity requires studying consumer buying trends, forecasting and analyzing past performances, and anticipating declines due to inclement weather trends or threats of global conflict. Researching markets, following news reports detailing current events which directly impact stocks, and forecasting futures prices are all time consuming and tedious exercises which enable veteran investors and brokers the ability to accurately assess economic indicators and make informed decisions about what, when, and at what price to buy or sell. But commodities trading is not for novices or for the weak at heart. Making a bold buy when the markets open and waiting to see how stocks fares at the close of trading can be nerve wracking at the least. The more investors trade, the greater trepidation they can experience about taking a loss.
Fearless investors who engage in day trading futures usually place two to three orders within a twenty-four hour period. By the close of the day, those orders placed for commodities futures could experience a net gain or loss determined by factors totally out of the trader's control. But the distinct advantage in day trading futures is that investors don't have to wait overnight to find out if the price they traded was too high or low. If a day trader bought commodities futures below the market value, the choice is theirs to sell at a higher price, but there are only twenty-four hours in which to trade again. However, if the market value exceeded an order, traders realize a net gain and can rest happy.
Another requirement for day trading futures is to not only be familiar with commodities and have the ability to forecast values, but also to be careful about monitoring brokers commissions and fees. Win or lose, commissions can quickly add up with each investment, especially due to the speed at which orders are entered. If trades last for a few minutes or hours, zealous investors may wind up losing their shirts by trading with too rapid a succession. Trading futures in a volatile market is somewhat like gambling on a slot machine in Las Vegas. It only costs a quarter to play, and playing looks like fun. Trying to match up three lemons at a time to win the jackpot seems easy enough; so gamblers keep pumping quarters into the machine in rapid succession, hoping to win. By the time players decide to give up, the amount of money that might have been won has already been spent feeding the slot machine. To avoid recklessly feeding the "kitty," new traders may want to solicit the aid of experienced advisors or open a managed account with firms that are well versed in valuing stocks and trading in the futures market.
For novices, day trading futures may be a big gamble; but for the experienced investor, trading in lucrative markets can pay off big. The most traded stocks are those which are secure and offer relatively high yields. Precious metals, such as gold, platinum, and silver coins, hold their value and increase in price. Gold is predicted to nearly double, possibly reaching $2,000 a troy ounce, as the value of the U.S. dollar continues to decrease globally. Crude oil prices ebb and flow with the potential for war and conflict in the Middle East; but, overall, prices are stable. Another high-yield secure investment for day trading futures is the government-backed 10-year U.S. Treasury notes. By studying the markets, researching consumer buying trends, and staying abreast of regional, national, and global news; traders should be able to continue trading to realize net gains.
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