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Live Futures Trading: Pre- and Post-market Session Planning

by | Tips & Strategies

Live futures trading is a taxing endeavor that requires extensive preparation and analysis. Dedicating adequate time to the discipline of active trading, and all it entails, is essential to approaching the market from a position of strength.

Modern futures markets exist as digital venues, open for business 23 hours a day, five days a week. No matter the timing or duration of your trading day, each session is best broken into three distinct trading sessions: pre-market, live-market, and post-market.

Adapting to evolving conditions is a prerequisite for achieving longevity in the marketplace. Simply put, what worked today may not work tomorrow. In order to stay competitive over time, a trader must have an idea of where the market has been, where it may go, and how to optimize performance along the way.

Basic Training for Futures Traders

The Pre-market Session

Every trader has a specific period of time that is designated for active trading. It may constitute the entirety of the day or merely minutes. The allotment of time immediately preceding active trade is the pre-market session.

Victory loves preparation, and the pre-market session is the time to prepare. Several important tasks addressed during the pre-market lay the groundwork for the coming live futures trading session:

  • Technology spot-check: Ensuring that your software, hardware, and connection to the exchange are functioning properly is a must. It’s also a good idea to perform a quick diagnostic of both your trading platform and connection to the exchange.
  • Overnight analysis: A study of price action since the previous close is an essential part of placing the forthcoming live session into context.
  • Calibrate strategy: Identifying important technical levels and advantageous scenarios before live trading begins is beneficial to capitalizing upon opportunity.

The pre-market session may occur at any time, day or night. However, regardless of the exact timing, performing the necessary market prep before actually taking a trade is key. For instance, if you’re implementing an e-mini trading strategy featuring the S&P 500, then the New York cash open at 9:30 a.m. EST may be particularly important. In order to hit the ground running, it’s imperative that the trader has performed necessary pre-market due diligence by the time the opening bell on the NYSE rings.

The Live Futures Trading Session

The live futures trading session, or live-market session, is the period in which a trader enters the market in hopes of realizing a profit for their efforts. From bell to bell, market participants carry out a collection of duties directly related to strategy execution:

  • Trade identification: Receiving signals, conducting analysis, and recognizing setups in real time serve as precursors to market entry.
  • Order placement: Limit, market, or stop orders are placed at the exchange in adherence to a clearly defined strategy.
  • Position management: The proper alignment of stop losses, profit targets, and position size is a prerequisite for profitability. Making sure that a trade is behaving according to desired parameters is a big part of limiting risk while maximizing reward.

The live-market session may last only minutes or the entire trading day. For instance, a scalper may define the moments surrounding an economic release as being a unique session, while an electronic systems trader may engage the markets on a near 24-hour basis.

Ultimately, it is up to the trader to decide exactly when to actively engage a specific instrument or group of instruments.

The Post-market Session

The digital futures marketplace is almost always open for business. Nonetheless, whenever a trader ceases active trading for the day, the post-market session begins.

The post-market hours are critical to performance evaluation and consist of several important tasks:

  • Market analysis: Determining what transpired during a given session and the catalysts driving the behavior may aid in strategy improvement.
  • Trade recap: An in-depth synopsis of the trades executed during the live session can be used to construct a statistically verifiable track record.
  • Journal: A thorough documentation of the session’s activities can be an invaluable part of identifying strengths and weaknesses. From fine-tuning the software trading platform to eliminating emotional trading, the journal can establish tendencies and areas in need of improvement.

By far, the post-market session can be the most sobering part of the trading day. In the event that a significant daily loss was taken, the post-market can be an intense period of introspection. However, it’s during this time that hard lessons are learned and closure on the day’s work is attained.

Getting Started with Trading Sessions

Live futures trading is an epic challenge. If a trader is not prepared, competent, and constantly evaluating performance, then failure is all but assured.

For tips on how to become involved in futures while avoiding many of the common pitfalls of live futures trading, take a look at Daniels Trading’s free e-book “Basic Training for Futures Traders.” In it, you’ll find valuable insights and observations contributed by experienced futures trading brokers.

Basic Training for Futures Traders

Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

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