Day Trading of Futures Contracts : NobleTrading Blog

Friday, December 19, 2008

Day Trading of Futures Contracts

Day trading of futures contracts is a trading strategy which need discipline, knowledge and experience. There are many liquid futures contracts and markets which can be day traded. Increased margin available for futures contracts make them perfect for day traders. But, to profit from day trading, the trader should have a good day trading plan, day trading software.

Good market and contracts for day trading: Most futures day traders prefer E-mini S&P market for day trading because of its high liquidity and quick order executions via electronic trading. Liquid futures contracts like E-mini Nasdaq and E-mini Russell futures, Dow futures, 10 year T-Notes, Crude oil futures, Soybean futures, and futures contracts on currencies like Japanese Yen and Euro are most often day traded.

Advantages of Day Trading of Futures Contracts

No overnight position holding risk.
Increased margin allowing traders to control contracts that worth many times the account size.
Quick learning, as traders need to watch the market as closely as they can.

Disadvantages of Day Trading of Futures Contracts

Not suitable at all for novice traders.
Increased commission charges, because of rapid buying and selling, can eat up the profit.
Small mistakes can cost high.