Online Futures Trading Systems
Online futures trading offers a profitable opportunity for traders working from all over the world. All that is required is a computer, an internet connection and, of course, a profitable trading system.
Online futures trading is a complex and competitive business where a proven trading system is essential. Online-FuturesTrading.Com provides information and resources to assist traders in formulating a trading plan and successfully implementing that plan.
Do You Have A Plan?
All professional traders have a trading plan. Trading futures is a zero sum game and those with a plan (and the discipline to apply it) will succeed over those that have no plan. A plan details the particular market anomaly that you intend to exploit - your edge. Human emotion creates anomalies - essentially, the fear and the greed of those that have no trading plan.
Creating a trading plan and rigidly applying that plan allows the professional trader to eliminate emotional responses from his trading.
Your trading plan is your online futures trading business plan. It pulls together all the elements of a trading system and provides a written record of how you are going to trade:
Market overview - An assessment of the market that will be traded. I.e. e-mini S&P500.
Trading concept/timeframe - what you are trying to achieve. I.e. capture trend days from start to finish.
Trade Entry criteria - The set up and the trade entry plan. I.e. Take the opening 30 minute range and enter on a stop order a break of the high or low.
Trade Exit criteria - Initial protective stop, trailing stop calculation and targets if applicable. I.e. an initial stop of 5 pts and a trailing stop of 5 pts. Exit at the end of the day if not stopped.
Money Management - How you will calculate the number of contracts to trade. I.e. 1 contract for every $5,000 of equity.
Backtest results - Including all the trades, the total points won, total points lost, maximum drawdown, average drawdown. Losing trades in a row, winning trades in a row.
Record Keeping - It is essential to record every trade made. Actual trades should be compared to 'theoretical' trades, those that your backtest procedure would have taken. Any differences should be highlighted and notes made as to why they have occurred.
A plan should be written for each different system or market that is to be traded. We recommend diversifying markets and systems to reduce equity drawdowns.
A trading plan should be constantly monitored for improvements. This should, of course, only be done outside of trading hours and only after careful backtesting. The trading plan should be constantly evolving and improving over time.
In the Free Beginner's Guide To Online Day Trading e-book we develop a full trading plan for trading the e-mini futures, including backtest results from January 2003 to date.
Have you considered online stock market trading in the past but found the costs prohibitive? Have yo ever considered the benefits on online futures trading?
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