Futures are an attractive market for day traders. To trade stocks you need at least $25,000, but today trade futures you can start with as little as a few thousand dollars.  The amount of capital you require to day trade will depend on the futures contract you trade and your brokers “margin” requirements. If you have a small account, you’re limited to futures contracts which have low day trading margins. If you have a large account, then you have more flexibility in what to day trade.


How to Pick a Futures Contract to Day Trade

To find the right day trading futures contract for you, consider volume, margins, and movement. Some of the most  heavily traded futures contracts on the Chicago Mercantile Exchange (CME) are the E-Mini S&P 500(ES),  Crude Oil WTI (CL), currencies and Gold (GC). Traders then need to look at margins and price movement to determine which suits their finances and trading style.  ES and CL have higher margins than the other contracts. Therefore, it follows you need a larger account to trade it. Oil is also quite volatile. Therefore, price movement must also be considered.

To establish movement, two things must be considered: point value, and how many points the futures contract typically moves in a day. The follow list provides the contract, the tick value and daily average movement in points.

  • E-Mini S&P 500 (ES) – .1 tick = $12. 50 tick value. 21.41 average daily range.
  • Gold (GC) – .1 tick  = $10.00 tick value. 12.34 point average daily range.
  • Crude Oil WTI (CL) – .1 tick  = $10.00 tick value. 1.3 point average daily range.

The above volatility is based on Average True Range (5) as of September 30, 2018. The daily range will fluctuate, but this provides a good estimate for comparison of volatility between futures contracts.

Deciding Based On These Factors

Holding a single contract through a typical trading day could see your profit/loss take a $1,000 to $200 swing. Not that you should buy-and-hold a contract all day; this is just an example to highlight volatility.Traders find futures produce enough action to create consistent income, but are challenged trading in a market rigged to the favor of the “Smart Money”. You can view a 1-minute chart (or any time frame that suits you) and see there are lots of opportunities to get into and out of trades as the price fluctuates throughout the day. If you use JIN Trading system, the trade criteria will present you with a dozen or two high probability trades.

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