A futures contract is an agreement to buy or sell a specific commodity or financial instrument at an agreed upon price in the future. The contract states the specific date and price at which the contract matures and the quality and quantity of the underlying asset. Its possible that futures contracts will result in the physical delivery of an asset, but many times futures are a way for investors to hedge risk or speculate.

For new traders . there are a few things to be aware of when learning how to day trade futures:

Holding positions overnight: One drawback of going long on futures is that they can open at a far different price, compared to what they closed at the previous day. This can result in unanticipated lossesso day traders often eliminate this worry by closing out their positions and the end of the day. Theres a learning curve: Like anything else, it takes time to learn how to trade futures . But unlike position traders who might only make one trade per week, day traders usually make multiple trades per day. This level of activity tends to steepen the learning curve. Make sure you identify a liquid market to trade in.: Many day traders use the E-mini S&P 500 to trade futures. One benefit of the E-mini S&P is that it trades electronically, so trade executions are quick and very liquid. There are plenty of other markets such as the Dow futures, E-mini Russell futures, and E-mini Nasdaq futures, but each market is different. Thats why its necessary to learn about each markets characteristics before starting to day trade futures.

Now a few words of cautionit takes a well-disciplined trader to succeed at day trading futures. As new traders get more experience and knowledge, the temptation to make marginal trades and/or to over-trade can lead to a lot of problems. Failure is usually due to a lack of preparation and discipline, but new day traders also need to be careful of trade commissions eating into their profit margin.

Fortunately, Wall Street Trading has a suite of education and mentoring programs designed to show you how to profitably day trade futures. With our help, new traders enter the futures market better prepared to implement a disciplined day trading strategy that will make money!