Do Not Overlook Futures Day Trading
Buying and selling the futures markets is very similar from a chart perspective as buying and selling the stock market. The major difference is the futures markets are inherently leveraged (small amount of capital controls a relatively significant investment). Even if you use margin on stocks, traders will not approach the leverage of the futures markets. This is what can make the futures markets desirable as a day trading vehicle, or as a swing trading vehicle. Seldom do people invest in futures for the long term - at most the bet might be a handful of months.If all you desire to do is day trade, then the futures markets ought to be on your list to trade. If you have the SEC manditory $25000 bare minimum to day trade stocks, then you can easily day trade some futures at the same time by opening a futures account. There is typically a bit more volatility day trading in the futures markets than in the stock market, and this can offer some great opportunities. Most futures brokerages will ask that you put up about $5000 initially to open an account, certain brokers might be higher. Intra-day margins to trade a contract or 2 are usually much less than the overnight margin requirements. The reason being overnight there can be large gaps in price caused by news events and you are required to keep enough capital in your account to handle that level of volatility. Additionally, it will be possible if you maintain futures overnight (or even intraday if you do not employ stops) to have your futures account go into a negative balance because of the leverage. Most firms will by no means let this occur and will close out all your positions before this happens. This type of event is a possibility and the risks should be understood. Intraday it is infrequent, but overnight it can happen with higher odds.
While these risks should not be downplayed, they should not stop you from thinking about trading futures either if you are a day trader. From a technical standpoint, trading futures is very similar to day trading the stock markets, with the difference that there are no "news events" on the futures such as analyst upgrades or downgrades to worry about. Economic events and news items happen all the time, and these affect both index futures and stocks who trade off them, so this is nothing new. There are many places now where you can get a cost-free demo account to try out day trading the futures markets. If you find that you enjoy doing it, consider adding the futures markets to your current trading.
The futures markets work very well for trying out a day trading robot, because there is more volatility. The futures markets are often a great selection for any type of automated trading robot because they tend to be more range bound than stocks. While an individual stock can run from 10 to 200 in a few months of time, the futures markets do not have this big a run, although they do trend up and down over months of time.
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