5 Day Trading Techniques That Futures Day Traders Should Add To Their Arsenal

Futures traders follow several techniques – trend following, contrarian investing, range trading, scalping, news playing – to earn money in the marketplace. A traders’ expertise in these techniques will help them make consistent profits.

There are several basic day trading techniques by whichfutures daytraders try to make profits. Apart from those techniques, contrarian or reverse techniques are also used by day traders to trade particularly against irrational behavior. Adjusting their techniques and remaining flexible according to the changing conditions of a futures market is important for a futures day trader.

1. Trend Following

Trend following is a technique in which futures daytradersassume that futures that have been rising steadily will keep on rising, or assume that futures that are falling will keep on falling. When a futures contract has been rising, trend following futures day traders buy it, and if one of their own is falling, they short sell it, expecting the trend to continue.

2. Contrarian Investing

This is a market timing strategy in which futuresday traders assume that a futures that has been rising steadily will change its direction and begin falling, or assume that a futures contract that has been falling will being rising. Contrarian futures day traders buy futures contracts that have been falling and short-sell futures contracts that have been rising because they expect the trend to change.

3. Range Trading

Range-bound trading is a technique in which futures daytraders watch futures contracts that have been falling off a resistance price or have been rising off a support price. This means that the futures contract falls back to the low after hitting a high, or hits high soon after falling to the low. Such a futures contract is referred to as "trading in a range," and this is the opposite of trending. Therefore, the range futures day traders buy a futures contract at or near the low price, and sell it at the high price. A technique related to range trading is to look for moves beyond a range that is already established, known as a breakout (price moving upward) or a breakdown (price moving downward). Then the trader may assume that prices will continue in the same direction for a certain amount of time even after the range breaks, whether upward or downward.

4. Scalping

Originally, scalping was known as spread trading. Scalping is a technique in which futuresdaytraders act as speculators to exploit small price gaps that the bid-ask spread has created. Normally, a position is established and liquidated in matter of minutes or seconds. When scalping high liquid futures contracts, futures day traders can take quick profits and minimize their loss exposure or risk. The basic idea behind this technique is to exploit the fact that a futures market can become quite inefficient after an increase in volatility and to exploit the extent to which the trading range has expanded. Go to eminitradingsystems.com, where you can learn about day trading techniques.

5. News Playing

This is the primary realm of every day trader. When tradingfutures, daytraders simply buy a futures contract after good news about it has been announced, and short sell a futures contract if a bad news about it has been announced. Enormous volatility is provided by such events in a futures contract, and so there is usually an excellent chance for quick profits or even losses. Whether the news is good or bad depends on the futures contract’s price action. Find information here about Emini S&P futures day trading course.

Indeed, futuresdaytrading contains a variety of styles with their own particular qualities and risks, the use of the above day trading strategies can come in handy.

Author of this article enjoys listening to the Cfrn Emini Futures Live Market Commentary each day and also watching the Cfrn Professional Emini Traders place live trades in their Live Emini Trading Room. Website: http://eminitradingsystems.com/