• Stock Investing Blog
• Trading Options
• Forex Trading
• Options Trading
• Stock Market Basics
• Fund Information
• Investor Definitions
• Stock Market Forums

• Stephen Cooper
• Easyonlinepaydayloan

Home >> Stock Forums >> How to trade futures/commodities?

How to trade futures/commodities?

StockHunter said: "Hey all, I will eventually look into trading futures/commodities later in my life (when I reach my dollar goal for this venture) and had a few questions. 1.) Does one treat them exactly like stocks? Can I trade them with the same chart reading strategy I currently use for stocks? 2.) Can I "daytrade" them just like stocks? Or is there a minimum holding time before you can exit your trade? 3.) How is voulme during "after hours" (before 9:30am EST and after 4pm EST)? Is it practical to think that you could trade 24 hours a day, or does volume go untradeably low in "after hours"? Lastly, is there a good free web site (i.e. investopedia) that can help me futher understand futures trading?"

prohobo said: "ETFs are an easy way. They trade like stocks and probably for the retail person the easiest way to get involved."

StockHunter said: "Yes, but can you: 1.) Daytrade ETFs? 2.) Trade them after hours like futures?"

prohobo said: "[QUOTE=StockHunter;70005]Yes, but can you: 1.) Daytrade ETFs? 2.) Trade them after hours like futures?[/QUOTE] Yes you can daytrade them. (We trade some of them pretty heavliy and have flipped position intra-day). As far as after hours - I think some of them are on some ECNs - so sure - why not. I never trade after hours (or rarely to cover a position or lock in somethin) - but I have never traded an ETF after hours - but I have seen the Qs trade pre-market so I would assume so."

StockHunter said: "[QUOTE=prohobo;70053]Yes you can daytrade them. (We trade some of them pretty heavliy and have flipped position intra-day). As far as after hours - I think some of them are on some ECNs - so sure - why not. I never trade after hours (or rarely to cover a position or lock in somethin) - but I have never traded an ETF after hours - but I have seen the Qs trade pre-market so I would assume so.[/QUOTE] Ok, I might look into them then. What I am looking for is to be able to trade something after the NYSE and NASDAQ close, I already trade them during the reg. hours. Thanks for the help!:respect:"

prohobo said: "I would the guess the volume would fall off. If you have access to Asia/Euro markets that is one way - the others is to trade the futures."

Roger said: "Trading ETF is indeed an easy way, and actually the same as trading normal stocks. In case of trading futures you should be more careful. Only invest in it when you are realy familiar with them. Investing in futures is very different from investing in stocks. With investing in futures you dont buy the asset, but the OBLIGATION to buy the underlying. In fact no cash payment is needed except that you need to keep a margin. This implies that the initial value of the future is zero. Because of daily settlement the value is set to zero after each trading day (there is only value during trading hours). This daily settlement is the big risk. If the future prices are going down the difference will be subtracted from your margin, and if the margin becomes lower and lower you will face the feared margin call. Although no cash is needed for the pure investment, your loss can be unlimited. This makes future trading so risky. Besides that the contracts are standardized in big units (especially for a private investor), and every tick is a lot of money."

StockHunter said: "[QUOTE=Roger;70765]Trading ETF is indeed an easy way, and actually the same as trading normal stocks. In case of trading futures you should be more careful. Only invest in it when you are realy familiar with them. Investing in futures is very different from investing in stocks. With investing in futures you dont buy the asset, but the OBLIGATION to buy the underlying. In fact no cash payment is needed except that you need to keep a margin. This implies that the initial value of the future is zero. Because of daily settlement the value is set to zero after each trading day (there is only value during trading hours). This daily settlement is the big risk. If the future prices are going down the difference will be subtracted from your margin, and if the margin becomes lower and lower you will face the feared margin call. Although no cash is needed for the pure investment, your loss can be unlimited. This makes future trading so risky. Besides that the contracts are standardized in big units (especially for a private investor), and every tick is a lot of money.[/QUOTE] Thanks for the info! I will proceed with caution when I start looking into futures, study up as much as humanly posible, and probaly do a TON of papertrading. Know any good books/sites that teach the basics?"

Roger said: "stockhunter: [QUOTE]Thanks for the info! I will proceed with caution when I start looking into futures, study up as much as humanly posible, and probaly do a TON of papertrading. Know any good books/sites that teach the basics?[/QUOTE] I dont know directly any books or sites, but i dont think it is not hard to find them. I recommend indeed to start with fictive trading. This is a nice way to get familiar with it. The thing with futures is to understand the nature of them. They have a different nature then stocks. When you invest in stocks you own the shares and they have value. Futures you should see as an agreement (delivery in the future) in which value is created over time. Once you see through this it will be a lot easier and you understand them better."

StockHunter said: "how is volume in after hours? is it day-tradeable?"

hasse_john@yahoo.com said: "You can daytrade from a technical perspective (or a fundamental one) in a number of areas. I rather look for a longer term trend, and try to ride it. I am currently negative the S&P, and doing very well. The trick is to expand the position at the right rate, and get out at the right time. You can get some awesome leverage, and it can smack you. I was looking real good in metals about 2 years ago, and let it all go. (hopefully I have learned from that experience)"

Roger said: "stockhunter: [QUOTE]how is volume in after hours? is it day-tradeable?[/QUOTE] To be honest i am not familiar with this. check what type of futures, because here are huge differences. Some futures are very popular, while others have hardly volume."

StockHunter said: "[QUOTE=Roger;71030]stockhunter: To be honest i am not familiar with this. check what type of futures, because here are huge differences. Some futures are very popular, while others have hardly volume.[/QUOTE] whats the most popular ones? like the top 20"

Roger said: "stockhunter: [QUOTE]whats the most popular ones? like the top 20 [/QUOTE] I know by heart that very popular are the futures on the s&p500 for equities. Besides that the main currencies (dollar versus euro/pound/yen) are of course popular. And then you have commodities with of course the oil futures. These oil future traders are criticed for driving up the price lately. I will try to find a list or something with the most popular ones."

StockHunter said: "[QUOTE=Roger;71294]stockhunter: I know by heart that very popular are the futures on the s&p500 for equities. Besides that the main currencies (dollar versus euro/pound/yen) are of course popular. And then you have commodities with of course the oil futures. These oil future traders are criticed for driving up the price lately. I will try to find a list or something with the most popular ones.[/QUOTE] ok, thanks!"