Tuesday, September 19, 2017

Futures trading plan

If you are about to make extra money in futures, you have to make a futures trading plan. In fact, it is similar to a Forex trading plan.

First of all, why you want to trade futures? Rookies just want to make extra income in futures market. But I am going to learn how to trade futures and how to determine the general trend on the daily chart.

Second, have you ever determined what your realistic goals are for futures? Many beginners have set really high goals, but veteran traders make a yearly goal about 13%.

Third, I should try to avoid large losses. So I will open a demo account and practice my futures trading strategy.

Fourth, I will open a futures trading account with $20000. But I just use a small percentage of it. I will never risk more than 10% per trade.

Fifth, there are many different commodities that are available to trading. For example, crude oil, gold, silver, wheat, E-Mini, Forex futures or VXX. But, I just focus and trade on EURUSD futures.

Sixth, I have to develop a checklist before trading futures. It can help you find more trading opportunity.

Seventh, what about your futures trading strategy?
  • I will use the time frame analysis to find the entry and exit points.
  • Use a trend line to identify the general trend on the weekly chart.
  • If I had identified the direction of the trend, I will trade with the moving average strategy on the 1 hourly chart.
  • Once I have determined a ranging market, I will trade with the grid trading strategy.
Eighth, what time frame will you trade? I will use the multiple time frame analysis to find the entry and exit points. For instance, Daily and weekly chart.

Ninth, How to maintain a futures trading journal?

I think it is important to keep a futures trading journal. So I have to update my futures trading journal every day.

Here is my forex trading journal excel template. I think it is similar to a futures trading journal.

At last, there is an old saying, "if you fail to plan, you are planning to fail". Therefore, you must establish a futures trading plan now

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