Dow Jones Average Investing Intro
Only those who know what they are doing should even entertain the idea of trading futures. The average person is drawn to futures because they have delusions of hitting the big one; usually, they end up taking a monumental beating. You can make thousands of dollars are a day or lose it all too and that’s what one should focus on; the “loss factor”. Hence the order of battle should look something like this
Stocks, Options and then futures; however, before you get into futures make sure you have mastered stock and options trading. Secondly, make sure you are banking profits in both markets. Some of these profits can then be diverted towards futures.
Futures trading provides you with an endless array of markets
One of the main benefits of playing the futures market is that there is always a bull market at any given moment. As so many markets are covered it is virtually impossible not a segment to invest in. Bulls can find bull markets and bear can find many markets to short. However, that is about the only benefit associated with futures for the novice player. After that, it is all downhill for the novice player and that is why only less than 10% of market participants succeed when it comes to futures.
A futures contract is a legally enforceable agreement to make or take delivery of a specific quantity and grade of a particular commodity during a designated delivery period. Making a delivery is a “short” position while taking delivery is considered “long”. The designated delivery period is also referred to as the “contract month”.
Each commodity has different expiration months, though the most common are March, June, September, and December. It is rare for futures products to trade every calendar month, so it is important to note the cycle and expiration dates of your chosen product before executing your trades.
The amount you could lose is even potentially unlimited and therefore could exceed what you originally deposited. Why?
The reason is that trading is highly leveraged, with a small amount of money used to establish a position in assets having a much greater value. But, while trading futures is associated with risk, and it’s important to be cognizant of that risk, it also promises a potential for unlimited income, and therein lies the reason for the risk. The key is balancing the two (and trading education always, always, always helps). Full Story
Futures Trading demands persistence and perseverance
In no other market are your skills of endurance tested as much as they are here. Novice traders should focus on markets that have low margin requirements with small drawdowns; you need to have money to jump into the markets again.
For example, avoid the natural gas and palladium markets. Oats, corn, wheat, cocoa, cotton, coffee, sugar, orange juice, pork bellies, individual currencies (look under margin requirements below for more info), etc. do not require huge margins. Additionally, potential drawdowns are less.
Tread and trade with caution for it’s very easy to lose 10-50K and for many that could represent their entire savings.
Dow Futures Investing and Futures Trading Resources
Futures contract and margin info
Places you can open a demo account
Dow Jones Average Futures Trading Update, Aug 5, 2019
Now the markets are pulling back and we are getting triggered into some of these plays. Don’t let market volatility change the angle of your perception. The masses complain about better prices when their wish comes true, they panic and flee to the hills and that is what they call investing. They are either oscillating between misery or euphoria and both have a dangerously short lifespan.
The trend is your friend anything that falls outside or in between that is your enemy. Never fight the trend for the outcome is always the same; the outcome in case you have not figured it out yet is that you will end up on the losing end. We continue to monitor the weekly charts closely as a bullish MACD crossover could lead to an explosive upward move. However, if the crossover fails to complete the markets will finally let out a nice dose of steam.
According to the TI Dow Theory
The Dow the utilities that lead the way, and then the Dow industrials or transports follow. In the current setup it the Dow industrials triggered the second buy signal, and now the Dow transports are close to trigging a buy signal. After this buy signal is triggered, it will pave the way for the Dow to blast well beyond 29K and possibly well past 30K. For the next 6-12 months, stocks in the transportation sector should outperform the overall market. Risk-takers (and we mean risk takers) can look into getting into TPOR, this is a 3X leveraged ETF that seeks to return 3X the daily returns of IYT. It could easily trade north of 45 over the next 6-9 months.