where would you get very basic futures trading training?

Discussion in 'Educational Resources' started by Nick Nikolo, Aug 14, 2021.

  1. Been trading stocks, options, even forex for years but never had any experience with futures. Just recently opened a futures account to test the waters. I am looking for a small number of 1 hour zoom sessions where someone would walk me through chart setup, order placement, etc and answer questions like how you protect yourself from cascading limit moves, and other gotchas.
    Of course, I'd be happy to pay for this service.
    This is not a solicitation for coaching from someone on here, just looking for a referral to someplace outside elitetrader, a legit trader or school.
    Think of it as getting "certification" of knowing the basics of futures trading.
  2. Overnight


    murray t turtle likes this.
  3. Thanks. This is a little too basic though.
    I know about ticks, points, expiration, rollover based on time/volume, order types and stuff like that.
    I want to be able to ask questions, like how you protect yourself from cascading limit moves such as those that occurred when Covid hit in 2020. For several days in a row every day was a limit down day. The answers I read were "use diagonal spreads" or "use options". In the past I have observed that options on futures may be illiquid in the extreme.
    There is nothing like talking to a trader who has been in that realm for years to answer questions, for a fee.
  4. Overnight


    Two questions...

    1. What markets were you looking at that had limit-down days? You are confusing a trading halt for the entire day with a breaker-trip. The only way it will happen again is if we have nuclear war, or BSE/Rabies gets airborne.

    2. You are looking for options to hedge your futures positions? If so, seek out folks like @destriero . He knows about such things.
    murray t turtle likes this.
  5. sure.
    1. I am interested in SP500, Nasdaq 100, maybe Russel 2000, Crude Oil and Gold. When Covid hit the SP500 futures reached their max daily limit within seconds of the open, for several days in a row. I take this to mean that for 5 days in a row your stop loss orders could not be filled, and you were on the hook for perhaps 100x your trading capital. E.g. you had $20K trading capital to begin with, and 5 days later you owed $2M or more because you couldn't sell at any price... By contrast the SPY etf was tradeable all the while.
    2. I was just pointing out that online research came up with "use options" to hedge losses due to limit moves or "use diagonal spreads", with one big caveat, that they are liquid too since options themselves may have their own max limit moves.... If there is a better way to hedge I'd love to learn from someone who has been through hell and high water. Yet another theoretical solution is "guaranteed stop orders". Some brokers offer them like TD365, Oanda, IG but I don't think that futures brokers in the USA offer these kinds of orders.
    Last edited: Aug 14, 2021
  6. Overnight


    That's not true.

    But guess what March 2020 taught us? Who cares? Just buy and hold. If we get another 30% drop? BUY AND HOLD!
    murray t turtle likes this.
  7. It seems to me that you are conflating a stock trading halt with a futures daily limit move halt.
    Surely, the stock/etf halts were occurring every so often and resumed 15 minutes later. I am not disagreeing with you.
    My understanding about futures however is that once you break thru the 3 daily circuit breakers that's it, can't trade again until the next day. If you can't get your stops filled on a 20% or 40% drop, it's gonna hurt. We might be approaching a day of reckoning soon where large drops occur in quick succession.
  8. Overnight


    A bit fuzzy on it at this point, but during the Wall Street RTH, CME Futures breakers follow the NYSE breaker rule of 7, 13 and 20 percent. During ETH, Futures follow a 7% up/down limit. It is just a limit, not a cessation of trading.

    You can see this on occasion in livestock futures. They currently have a 4.5 point up/down limit. If the limit is hit, that's, well, the limit. But the ladder can move back away from the limit and trading continues.
  9. KevinBB


    Interesting conversation. It made me get out the abacus to see how two days of limit down pricing would affect my account.

    If you're a day trader, this probably doesn't apply to you, but my plans are to hold each position for a month or two, or as long as the trend continues.

    For MES, the micro S&P500 futures contract, the current limit down maximum of 20% is 891 points (this page), at $5 per point = $4,455 per contract. A next day limit down drop of 20% is a further $3,570 per contract. Say a round $8,000 for the two days at limit down.

    My system allows for a maximum of 4 x MES contracts at one time. $32,000 for two days limit down. Maximum. Say the same for a few Dow futures contracts held at the same time.

    Thankfully I'm still within portfolio limits, and also within projected maximum drawdown limits, assuming my calculations are correct.

    Back to being on topic (training for futures trading).

    The important thing for me out of this conversation was that position sizing is an important part of any trading system, however this is only one part of the system. Holding a diverse portfolio of contracts, as uncorrelated as possible, is another part of any good system.

    As @Overnight pointed out above, there are others in the forum who can much better advise on other methods of hedging a portfolio.

    Last edited: Aug 14, 2021
  10. JSOP


    Books, Investopedia and then open a demo account to work out a system and then a live account trading small size.
    #10     Aug 14, 2021
    ChaelBu likes this.