February 2, 2023

How to use day trading on futures

What is Day Trading?

Day trading refers to a certain type of trading where you buy and sell stocks, futures contracts, and other underlying securities within a single trading day. That means all positions are opened and closed on the same day. It is also known as intraday trading and its main advantage is that traders can make quick profits in a short time frame.

Day trading can be done using technical analysis or fundamental analysis. Technical analysis involves using chart patterns and indicators to predict future price movements. Fundamental analysis on the other hand involves assessing the current state of a given company and its industry or sector which is used to inform trades.

Advantages of Day Trading

One of the main advantages of day trading futures is the ability to capitalize on market volatility. When prices move quickly and frequently, day traders can take advantage of these quick price movements by buying and selling at the right times. This gives traders the opportunity to make larger profits with smaller amounts of capital compared to traditional investment strategies.

Another advantage of day trading is the liquidity of the markets. Futures markets are highly liquid, which means that traders can get in and out of trades quickly and easily. This ensures that traders do not miss out on any potentially profitable opportunities.

Finally, day trading on futures contracts allows traders to trade without having to wait for the expiry of the contract. This means that traders can take advantage of quick price movements without having to commit to holding contracts for longer periods of time.

Risk of Day Trading

Day trading is a high-risk activity and requires a lot of patience and skill. Many traders fail to understand the risks involved in the process and end up losing a significant amount of money. One of the main risks associated with day trading is the volatility of the markets. Prices can move quickly, and traders must be prepared to exit the position if needed to avoid losses.

Another major risk associated with day trading is the complexity of the contracts and the market environment. Futures are derivatives products that can be difficult to understand. Additionally, markets are constantly changing so traders need to stay on top of news and events in order to make informed trading decisions.

Finally, day trading futures also involves commissions, fees, and other costs associated with each trade. Traders must factor these costs into their overall trading strategy.

Key Points to Consider When Day Trading Futures

When day trading futures, there are a few key points to keep in mind. First, traders should always consider the risks involved with day trading before entering any positions. Additionally, traders must have a trading plan and stick to it. Having a plan will help to ensure that traders enter and exit trades at the best possible times.

Traders should also be familiar with basic concepts such as technical analysis and fundamental analysis. This will help traders understand market trends and prices better.

Finally, traders should also be aware of the different fees and commissions involved in each trade and factor these into their trading strategy.


Day trading futures can be a lucrative strategy for traders with the right set of knowledge and skills. However, day trading involves a lot of risk and traders should always understand the risks involved before entering any positions. Additionally, traders should develop a trading plan and have a good understanding of fundamental and technical analysis before entering the markets. Finally, traders should be aware of the fees and commissions associated with each trade and factor them into their overall strategy.

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