 Just waiting to get confirmation that we are up and running. Welcome We're doing a live stream here. I thought I would do this one on Micro futures I've had a lot of fun lately trading the micro futures And if you don't know what the micro futures are well first of all what our futures contracts futures contracts are Leveraged way to trade Commodities commodities are uniform assets. So very common Would be like crude oil gold silver currencies and They started out When farmers needed to hedge crops, that's how futures started nowadays. They are still used for that You can sell your future crop using a contract but Because they are leveraged if you're not a hedger if you're a trader or a speculator you might use a futures contract to get more buying power or to to get trading Overnight maybe because futures trade up almost Almost 24 hours. It's like 23 and a half hours a day. They open on Sunday night a lot of reasons why you might want to trade futures very Very risky because you're allowed to trade a lot of value for not a lot of money So These these contracts that I'm looking at here, they're called micros and they're newer contracts at least for me They're smaller contracts and in this case I'm going to start off with a micro because I'm doing a lot of micro Russell trading The micro Russell You're controlling five times the index. So it's every one point Which is 1.00 is worth five dollars, which means this is a little more than 10,000 bucks like if I do just a quick I Multiply this by five 10,482 dollars. So this the way I have it here now I multiply it by five you get a better idea of what we're actually trading now in order to trade this This $10,000 worth of risk whether you're bullish or bearish, you know, if you think it's going to go up or down You're only required to put a down payment. So what happens is a lot of Day traders or swing traders or professional traders. They'll use futures just like like this one or the mini or the bigger contract and They like that because they can get 10 times leverage or sometimes more intraday they day traders might even get 40 40 times leverage even even more if you're trading something like bonds but I'm going to focus specifically on on the micros the e-mini and the the Russell 2000 just because I don't usually trade Futures so much. I trade options. I've traded options on futures, but I'm really enjoying Working on my system It's it's a very interesting way to try to make a little daily income Keep you engaged in the market because there are smaller contracts. You can keep your trades very small You as long as you use a stop-loss as long as you have a take profit very interesting way to trade and So we've covered that the value of the contract is about 10,480 and it will fluctuate in November the contract was smaller was Around $8,400 and now it's a bigger contract because the market went up If we look at the margin rates now, I'm looking at trade station They have their margins here listed so it's very easy to use if we look at the mini Russell 2000 Actually, that's that's the bigger contract the bigger contract is $50 a point and The overnight because I like to hold stuff overnight versus day trading This is $7,000 to put it on because we're using the micro that's this one down here the M2k That one is $700 to put on $715 once you put on the contract you have a maintenance margin which which is a little less So to put it on you have to have seven hundred and fifteen dollars in your account to keep it on They give you a little bit of a break 650 net this every broker can have their own margins. This is trade stations margins for Conversation entertainment education purposes, I'm using them I'm For day trade if you have a tight stop you can actually use less money So what's fascinating is I'm an option seller personally. I like to either sell options or own stock or own Long-term leaps like one-year call options for example in the money as conservative as I can But it's I've had a blast trading the futures. I trade with a bias and It's very interesting and so I'm just gonna share some of my findings so 700 700 715 and put it on and then Since we know how much You know it takes to put on you have to you have to think about what's the strategy? Are you gonna be doing a swing strategy? I don't like the future so much for a swing trading for a long period because I Feel like the options do a better job and I have more staying power because if I'm wrong I'm gonna get stopped out So going for a shorter term Trading style Seems to work better for me when I'm trading the futures and the micros and if you look at today Really there was two major moves if you were bullish you would have gotten bullish, but let's say you you got most of the move looks like it maybe 20 points there was a 20-point move to the upside and maybe another Maybe roughly another 20-point move to the downside. So what does that mean? It means that? 20 points up if you were bullish and you caught it perfect 20 times 5 is a hundred dollars and Then if you were a bear at the right time just happened to be a bear at the right time and a drop 20 points That would be another hundred dollars now Maybe that's a lot of money to you. Maybe it maybe it's not but you got to remember. Let's say it's a hundred dollars per day or in one day and you only have to put up 715. Well, that's a pretty big return Because it's leveraged now risk and Reward is two-sided. So if you're short at the wrong time and you don't have a stop You're gonna you're gonna lose a hundred dollars and that's just the way it goes You really have to have a system and a strategy in place, but from a capital efficiency standpoint It's a very interesting proposition If you were just a trade during trading hours For me, it's 630 to about one You'll you get a you get a reduction in buying power so the the micro Russell You it could be 179 They give you a day trading bump or a discount. So if you make a hundred or two hundred dollars trading correctly You may only have to use that much money If you're trading intraday so It really gives people who trade or willing to put in the work and sit in front of the computer and the monitor Gives you a chance to efficiently trade and try to make daily income now Very hard to do but futures do give you that the Buying power and the capital efficiency to try to do it now. Let's see MES. We'll just cover MES oops Let's do M 2024 So this is the S&P Micro E-mini This one is also five dollars Because it's one-tenth the mini the mini is fifty dollars And we'll look at the margin. So because because it's It's probably about twenty five thousand dollars worth of nominal it's called nominal It would be like trading twenty five thousand dollars worth of S&P So the margins gonna be more if you go to the micro ES It's almost double so the micro Russell was about ten thousand and a half ten thousand four hundred bucks the the micro ES is about twice that so it makes sense that the margins around 1200 bucks. It's 1298 If you trade intraday, it's it's even more attractive than the micro so Kind of interesting that it's so low must be a popular product and they must be doing it because they know a lot of people are interested And Is there anything else? Yeah, okay, so another thing to point out is when you are trading futures You have to keep in mind what month you're trading like recently we went from the March to the June and the last week you want to Stop trading The near date and go to the the further back month, which would be the in this case You stop trading the H and you go to the M So every three months you're gonna be switching contracts Let me go back to my favorite the M2k M like if you look M2k, let me just put M2k. It'll give me different months So we have the H which is expiring this week You have the M which is now the active the more the more active more popular Contract and it will be that way until we go to one week Left in a contract and then everybody will run to the September after that it'll be December and then the whole cycle repeats for the next year Just something something to keep note eventually it just gets harder to trade in the last week and then You won't be able to trade it at all Anything else I'll just give some Some thoughts that I that I found M2k M 2024 So I like to trade inside moves Me specifically I like to trade inside moves so an inside move would be like a breakout that doesn't break out And fails and then it drops. This would be an example of an inside move because It stayed within the range. It didn't break out in either direction. It just stayed inside another Another style would be to trade breakouts like baby breakout 2094 that would have been a bullish signal. I don't like to trade that way Especially right now because I have a bias. I have a bear bias so I'm looking to trade to the downside and One of the reasons I love this is I choose my trades. I choose my risk. I Can put a stop market stop market is an order that pulls me into the market. It's like You set a level in this example like if I put a stop market at 2094 if it hits my level it it gets me short and That's the type of trade I want to put on if that doesn't make sense Another way to say it is if I wanted to be bullish the market I can place a buy stop above the market It it only triggers if the market is showing strength and rising so if the market starts to To go through my level once it triggers I'll get pulled in and the reason that's a good way to trade in my opinion is that If the market does what you think it's going to do then you get pulled in But if the market instead never goes up, let's say it never goes to my level and it just sinks Well, then I'm not in the trade. So it reduces your it reduces my risk in my opinion because statistically speaking my trades that are winning will Will go will be my order will be triggered when the market is moving in the direction I think will happen and I will avoid all the losers that never never start rising. So Do with that what you will one more interesting Mention would be that It's better to take smaller profits based on the range of the market. So Like if you look this is the four hour It seems to chop around in a certain range now and some people like to plot an average true range But you can intuitively just look it seems to keep chopping around. What is that like? If we measure high to low a hundred points 80 points 68 points so it would be it would somewhere around 60 70 points is the max that I would expect so I would want to decide to trade within that range like I'm not gonna I'm not gonna put a short at the high at the high level here Whoops, that's in the way. I'm not gonna place a short and place a take profit limit way out because Most likely it will just hit somewhere You know between a hundred and sixty points at least that's how it's been moving until things change You want to keep that in mind? If you're trading for income If you're trading for a crash Maybe you you might do some put spreads by futures From my experience haven't been the best way to try to trade those bigger thesis ideas They're more of like an income generator type trade for me Anything else also the 20 day or the shorter period moving averages Have been quite useful for me I'm noticing that they do seem to respect like the 20 and the the 10 to 20 moving averages Seem to be respected as long as if we're in a bullish move we tend to stay above that so it would be useful to keep that Keep that on your chart like when it dipped below the 20 period average It didn't continue it recouped the moving average and right now we're trading above the 20 period moving averages But when the market is falling like let's look at our T.Y. because it has more trading days If we look at Let me see In a downtrend it stays below the 20 period moving average in an uptrend It tends to stay above the 20 period moving average so It doesn't work perfectly as you can see but generally speaking it's nice to have those because they become self-fulfilling and Like here I would be worried about Being too aggressive on the short side because we're above the 20 period moving average But if we started to create a downtrend then I could be trading bear trades with a bear trend I Think that's all I have for now Didn't want to make the video too long, but if you have a question on the micros on the minis or even the the Futures options, I'm happy to have a conversation and maybe I'll make another video as a follow-up Based on your comments. Thanks for watching