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Futures Day Trading for Beginners

July 1, 2020 by Daniels Trading| Futures 101

Every year, legions of aspiring traders enter the futures markets hoping to make a living buying and selling contracts. The upsides are obvious: financial and personal freedom. Unfortunately, the number of losing traders far exceeds the tally of winners.

Be forewarned: The path to becoming a winning trader can be long and treacherous. Nonetheless, if you’re interested in a career in the markets, then a few lessons on day trading for beginners can help you avoid hidden pitfalls and even financial catastrophe.

Lesson 1: The Personal Inventory

The old axiom “Know thyself” is especially relevant in futures trading. Before ever placing a market order, it is imperative that you have a good idea of your strengths and weaknesses.

Understanding your competencies in several key areas is useful in optimizing performance:

  • Quantitative reasoning: Futures trading is a numbers game. Price levels, technical tools, and fundamental analytics are all expressed numerically. If your arithmetic skills aren’t up to snuff, work to improve them immediately.
  • Attention span: Day trading takes long hours of study and evaluation. The ability to maintain focus for long periods of time is an inherently valuable trading skill.
  • Resilience: Losing money is an unavoidable aspect of active trading. Accordingly, being able to quickly bounce back from a loss is a key part of achieving long-term success in the markets.

If you wanted to write a book titled Day Trading for Beginners , conducting a personal inventory would be a great first chapter. Remember, no one is perfect―being in tune with your capabilities is essential to winning in the markets.

Read our guide, Basic Training for Futures Traders, and discover 50 of the best tips from experts.

Lesson 2: Secure Adequate Resources

No matter what type of trader you are, there are several resources that must be secured before entering the markets. Having a basic amount of the following assets is non-negotiable:

  • Risk capital: The beauty of modern futures trading is that you don’t need $100,000 to get started. However, a sufficient amount of money is necessary, specifically one large enough to allow you to safely pursue your financial objectives.
  • Knowledge: Although it is impossible to know everything about the capital markets, a robust knowledge base is required. Market behavior, the value of technical and fundamental analysis, and how to operate your software platform are three essential areas of study.
  • Time: Making money in futures takes time. From hands-off systems traders to discretionary participants, minutes, hours, days, and months will be required.

No ifs, ands, or buts―you must have money, knowledge, and time to have a shot at winning in the markets. If any of these inputs is lacking, your bottom line will become a product of dumb luck, not skill.

Lesson 3: Build a Trading Plan

No matter whether you’re changing a light bulb or trading corn futures, you need to have a plan. In the case of active trading, a comprehensive plan gives structure to the way you conduct day-to-day business. Without a plan, market participants are prone to fall victim to the hazards of undisciplined, emotional trading.

Although a curriculum labeled “day trading for beginners” sounds elementary, building a viable trading plan is anything but. These three facets, which vary in complexity, serve as integral parts of any strong trading plan:

  • Trade selection: Identifying opportunity in the marketplace is a critical element of the trading plan. The plan uses strategic principles to determine when market conditions warrant entry.
  • Trade management: Trades may be executed in countless ways. The trading plan dictates the order types to be used as well as when to take profits or cut losses.
  • Money management: Implementing the proper tenets of money management is the key to sustaining profitability. Money management involves three key tasks: aligning risk to reward, understanding position sizing, and preserving accounts.

A comprehensive trading plan includes parameters governing trade selection, execution, and money management. When applied to the market consistently, a good plan produces quantifiable, replicable results.

Futures Day Trading for Beginners

In reality, day trading for beginners is a deep and broad topic. Nonetheless, after completing a self inventory, gathering necessary resources, and building a plan, you’ll be well on your way to participating in the futures markets.

To learn more about how you can become active in futures, check out Daniels Trading’s e-book Basic Training for Futures Traders. Featuring tips on how to set goals, optimize performance, and become a disciplined trader, it is a valuable guide for anyone getting started in the marketplace.

Basic Training for Futures Traders

Filed Under: Futures 101

About Daniels Trading

Daniels Trading is division of StoneX Financial Inc. located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading was built on a culture of trust committed to a mission of Independence, Objectivity and Reliability.

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.

© 2023 StoneX Group Inc. All Rights Reserved

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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.

© 2023 StoneX Group Inc. All Rights Reserved

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