What type of trading should you choose on the futures markets?

Indeed, there is also a notion of risk depending on the type of trading you have adopted. In principle, the more positions you take on the futures markets, the more risk you will take for your capital. So, you must have a psychological risk-taking capacity to withstand taking a large amount of positions per day. Additionally, futures markets allow the use of leverage and therefore this increases risk. This is why scalping, day trading and swing trading do not have the same leverage when you take a long position or a short position.

For a beginner trader, swing trading is perhaps the simplest type of trading to set up. Indeed, we will see that this trading method is quite simple. We will therefore define exactly what swing trading is and also give you tips and a psychological approach to trading successfully in swing trading on the futures markets.

What is swing trading?

Swing trading is a type of medium and long term investment or speculation. That is to say, you will buy or sell the market for a period of several days, several weeks, or even several months. This therefore assumes that you have analyzed a financial asset over long periods of time to establish your trading plan.

The advantage of swing trading is that you will limit the risk for your trading portfolio. In fact, you will take a position on an underlying with little leverage. This therefore ensures that you have the possibility of taking other swing positions on other assets in order to diversify your portfolio.

How to trade well in swing trading?

To successfully trade swing futures, you must take the time to identify important price levels on the underlying you are analyzing. That is, monthly and weekly supports and resistances should be plotted on your chart. Next, you need to identify long-term trends. This is where you can tell if the stock price is entering an area with a potential trend reversal.

Indeed, swing trading is essentially trend reversal trading on important price levels. So, you will have to take into account a measured leverage effect because you will have relatively far stop losses. In addition, you will also have to pay attention to the risk return of at least one to two in order to have a profitable trade.

Finally, if you want to do trend following swing trading, using moving average bounces and pivot points can be an excellent solution.

Day trading: short-term trading on futures markets

Day trading is a type of speculation that is one of the most profitable when you perfectly master your trading technique. Thanks to your market analysis and your graphical analysis, you will be able to take positions that will be scalable but above all profitable. We will see what day trading is and we will give you tips for success in this type of trading.

Day trading is a type of trading where you take a few positions during the day based on your technical analysis and your fundamental analysis. Intraday trading is prepared every day by setting up a trading plan that adapts according to market conditions.

You will sometimes trade trend reversals, sometimes have a trend following strategy and also range trading. It is your graphical analysis that will determine each day where you will look for trading signals to take one or two trades during the day.

Succeed on the futures markets in day trading

In day trading, sometimes a plan does not come true. In this case, you have to remain patient and not trading is also part of trading. It is very important not to engage in overtrading or trade out of boredom because you are certain to lose money on your capital. In addition, it is essential to follow your trading plan to the letter.

The secret of intraday trading is to stick to your plan because it will almost completely remove the psychology from your trades. In fact, the plan tells you when to take a buying or selling position by looking for technical signals according to the zones you have determined.

Scalping is perhaps the most difficult type of trading because it is the most risky for your capital. This is because short-term trading requires you to take positions on the financial markets often. We will therefore see what exactly scalping is and also give you some techniques for trading successfully by scalping the markets.

Scalping is the action of stringing together trades over the very short term. The objective is to win one or two points and collect the profit. It is the accumulation of winning trades that will achieve the day’s performance. But as mentioned above, taking several positions increases the risk of loss. This means that scalping is a trading technique that requires a lot of experience.

When you scalp, you have a very precise trading plan on trend lines, rebounds on moving averages or even breakouts of supports and resistances.

How to succeed with scalping on the futures markets?

To be successful in scalping you need to have a lot of experience as it is the most psychologically difficult trading to do. This is why your plan must be very precise. Indeed, your gain sometimes depends on one point so your supports, resistances and trend lines must be perfectly drawn.

In addition, you need foolproof psychology because you will need to take your losses very quickly if a trade goes wrong. Indeed, the very short term means that you hold a position for a few seconds or even a few minutes if you ever have a movement that gives you more points than expected.