The Only Futures Trading Video You'll Ever Need (Beginner to Expert)

[00:02] instrument there is Futures are a contract agreement to buy and sell a specific commodity at a predetermined price and time an example of this is oil Futures where you're saying I will buy a hundred barrels of oil at 400 a barrel

[00:17] in three months there are also other markets such as the S P 500 futures that I trade a lot that are just settled in cash now that can sound a little daunting you don't want to have 400 barrels of oil show up at your front

[00:31] door but when it comes to practically trading Futures all you're doing is really the same thing as buying a stock of trying to buy it low and sell high for a profit because to get those 400 barrels of oil to show up at your house

[00:44] you actually have to let the contract expire and have all this other stuff go wrong in your favor in reality you're never going to have 400 barrels of oil show up at your front door all you're going to be doing is just buying and

[00:58] selling and settling everything by buy cash and so it ends up being exactly like buying and selling stock but why Futures are better than trading stocks is because you have way more leverage when it comes to trading Futures what

[01:14] this allows you to do is start trading with a small account you can start trading Futures with a thousand dollars compared to a stocks to get actual have to have a lot of money to start with and not everyone can do that now if

[01:29] you have looked into day trading stocks you will have heard the pattern day trading Rule and so all this rule basically does is it doesn't allow you to day trade consistently unless you have over 25 000 in your account and

[01:42] Futures they do not have this Rule and so with a small account like a thousand dollars you can make as many day trades as you want allowing you to start with a really small account and day trade whatever strategy you want and so the

[01:57] Futures Market I'm going to focus on in this video is the SM MP 500 futures now this video is the SM MP 500 futures now this is the futures for the S P 500 Index which makes it the most liquid and tradable market and so if you're looking

[02:10] to start trading Futures I would highly suggest starting with this market now Contract think of it like buying one share of a stock in practicality sense when you buy contract it goes up you make money and when it goes down you

[02:25] lose money and all the differences is that you're buying with something called margarine and all margin is is think of it like collateral you're putting up a certain amount of money to gain control of this contract and then as you hold

[02:38] that contract it'll go up and down in value increasing or decreasing your account now there's a few different things with margin because Futures trade 24 hours a day you have something called intraday margin an overnight margin now

[02:53] generally the stock market as a whole trades from 9 30 Eastern Standard Time to four o'clock Eastern Standard time during that time Futures are considered intraday and so the margin requirements for that can be a lot smaller generally

[03:07] it's around at the base it's seven or eight thousand for the es or S P 500 futures and then the overnight margin can be double that and so seven or eight thousand four one contract is still a lot of money and a what a lot of

[03:21] brokerages have is something called Low margin requirements so for one contract of the es Futures in intraday you can get requirements as little as 500 per

[03:33] get requirements as little as 500 per contract and so this allows you to trade talking about some good platforms that do this are ninjatrader or tradovate and what they do is they just allow you to trade Futures with that low margin

[03:48] requirement and their account minimums are very low allowing you to easily get access to trading Futures now another big difference between Futures and big difference between Futures and stocks is stocks trade on a dollar basis

[04:01] so if you have a thousand dollar stock and it goes up one dollar and you have one share you've made one dollar but with Futures they have what is called a tick and a point now a tick is the smallest amount of movement that the

[04:15] market can move and so with shares usually this is one penny usually the stock can go up pennies at a time at a minimum or even more but with Futures they have different increments so one could be 0.25 or one could be 0.1 now

[04:30] with the es Futures the minimum movement or the tick value is 0.25 and a point is so tick is essentially a quarter of a point and so you can see when you're

[04:42] actually looking at the market moving real time it is going up and down in one real time it is going up and down in one tick increments or 0.25 or a quarter of a point and so because of this they are not valued at a dollar each different

[04:57] Futures commodity has a different tick value so for the es one tick or the smallest price movement it has is 12.50 and so a point is worth fifty

[05:10] dollars and so this is where you actually see the leverage that the market has in reality all you need for is five hundred dollars to start getting movement on one Futures Contract and in general in just a few minutes the es can

[05:24] general in just a few minutes the es can move up 10 points that is 500 in just a really see the leverage that you can get with these contracts now if that's too much leverage to deal with what Futures have is something called the my micro

[05:38] Futures and what this is is it's a contract of the same commodity so for the S P 500 futures you're still trading the same thing but it is one tenth of the size the ticker singable for the S P 500 futures is es and the ticker symbol

[05:54] for the micro smaller version is mes and so this one point is worth five dollars and the margin requirement is also fifty dollars and so you can trade extremely

[06:06] small account size by doing this and again it allows you to start really really small and then of course it is really easy to scale up your account as you start to grow it because all you have to do is buy more contracts and

[06:21] because the es Futures is the biggest most liquid Market in the world you are never going to have a problem with trading as many contracts as you want Futures it is best to day trade them using technical analysis and what I've

[06:36] actually found over years is the most profitable way of doing this is looking for reversals in the market now a lot of times you'll hear that the trend is your friend but what I have found is that reversals give you a lot higher risk

[06:49] reward you don't have to be right very often but when you do you get paid really well for it making you profitable in the long run trading isn't about being right every time it's about consistently making money over many

[07:03] trades and when you have a good risk reward ratio like risking one to make three you only have to be right a third of the time to be break even and if you're right half the time you are profitable and reversal trades do that

[07:16] profitable to where you're not just reversing randomly in a strong Trend there is a powerful checklist that I have found to help find these opportunities now the first one of these is top down analysis what you want to be

[07:31] doing is looking at multiple time frames you want to be looking at a larger time frame for the trend and and the overall structure of the market and then zoom into a smaller time frame to actually enter in on the trade-in so for me I

[07:45] look at a 15 minute chart for looking to where the support and resistance are and then I zoom in to a one minute chart to actually enter in on the trade I like to draw support and resistance zones based on what the market is telling me so what

[07:59] highs up here worthy Mark has topped a couple times I just like drawing off of those and dragging it to the right and seeing where the market bounces off of that and so as the market comes up to this level

[08:14] and bounces off up here there's probably a high likelihood that the Market's once it gets to that area in real time I jump into a one minute chart and look for a few specific patterns to get in on a trade now that's the awesome thing

[08:28] Market's gonna go up and make money and you can also bet that the Market's gonna go down and make money that way as well if you can find the right spot and so that is the number one thing is we want to see the market get to our resistance

[08:42] area or our area of high probability the market is going to reverse because a big mistake a lot of people make when they're trading is having the mindset of always be in the market they want to spot every move in the market and try

[08:55] and profit from it instead of just looking at Key areas in the market and consistently profit I mean off of one pattern and being patient until that pattern shows up then once we see the market get up to that level the number

[09:10] one thing when counter Trend trading is you have to make sure that that uptrend trying to bet that the market is going to go lower in any of the pullbacks that the market has when it's just that's a normal pullback in the market and it's

[09:25] just going to keep going higher and so what we need to be looking for is a nice support level that the market has confirmed and it's bouncing off of and you want that to be broken because that is a big key that hey the

[09:39] market is breaking its uptrend and that's adding on to the strength of a potential reversal that is all these are doing is it's stacking on top of each

[09:51] probability that the market is going to go down number one is that resistance go down number one is that resistance number two is that break of our downtrend and then what I found that really increases the likelihood of the

[10:04] market reversing is waiting for the market to make a pullback that gets rejected in the market essentially all it's doing is making a lower high than the previous one showing you that the market is done making higher highs and

[10:19] it could start shifting into lower lows and lower highs which is a downtrend and when you're counter Trend trading and then the final thing is a Candlestick Candlestick patterns that you can use then my favorite one is some kind of

[10:35] engulfing candle or you can see with these three or four candlesticks is the market kind of was moving up slowly and then all of a sudden it just ripped back then all of a sudden it just ripped back lower closing below the last Candlestick

[10:47] and almost the one before that it's a massive red candle showing you that there is Big sellers coming into play and it has started to make the potential of that swing back lower and so as it finishes I like to get in on the close

[11:01] of this Candlestick when you're trading you want to wait for the Candlestick to finish forming so if you're on a one minute chart make sure you have a timer somewhere that shows you how long until the candle is formed and then when you

[11:14] see that coming to an end then jump in on a trade then there's a few different types of orders you can use you can use a limit order which just gets you in at an exact price so let's say if I want to get in exactly at 37.39 if the price

[11:29] hits that and it fills me I will get in on a trade betting that the Mark is moves too quickly and blows past that order I might not get filled with the market order if you put it in at 37.39 it could move down and fill you at 37.38

[11:46] now that's not a big deal in the big picture when you're looking for the market to give a massive reversal back lower and so use whichever one you find you what it's like to actually trade Futures in real time and so I trade this

[12:03] strategy that I just showed you every day all I do is look for those patterns every day and if you can see here we have our uptrend that is starting to break and then up here is that resistance Zone from a higher time frame

[12:18] and then the last thing we look for is some kind of reversal pattern or large rejection bar and so right here this current massive bar that's going crazy you can see it punches higher and then punches back lower order that is a

[12:33] really good signal because if you read a little bit more in the just analyze what the chart's doing here we see the markets go going up going up going up sitting around chopping a little makes a massive attempt to go

[12:47] higher and gets reversed on and so that's a really strong that's a really strong key to go back lower and so I got in on that you can see here is the current amount I'm up and then I put my stop

[12:59] amount I'm up and then I put my stop loss above the extreme of that high because you want to have your stop loss protected by the structure of the market that is the biggest thing about technical analysis is understanding hey

[13:11] we're an uptrend we're in an uptrend and if it decides to go lower it's going to make lower lows and lower Highs but if it keeps going up it's just going to continue breaking those highs and so that is the whole idea of having that

[13:23] stop loss up there initially is that if that high gets broken hey we're wrong the Market's actually going to continue higher and that's totally okay now for me I like to manage these trades more aggressively and so I actually moved my

[13:38] stop to break even here as the market started to move lower in my favor I like to capture some of those profits now I would suggest having a more fixed profit

[13:50] Target when you first start out but as you get better and better at trading you can add on managing the trade and so once the market gets going and I've move it down with the pullbacks and so here you can see we had a pullback and I

[14:06] put my stop above that because again going with the idea of trading with the trend and sticking with the trend I'm going to only move my stop loss down with those swings to stay with it now

[14:18] when it comes to trading I only trade a couple hours in the day the Futures do couple hours in the day the Futures do trade about 24 7 but the first few hours in the day are generally the best in terms of volatility and potential profit

[14:32] market had a little pullback here and I moved the stop down again and I actually have a video that talks more about trailing stops and how to use those if you're interested in that the Leverage is what allows you to really use this as

[14:46] a beginner and then a big thing here as well as you can see I have a support Zone from a large time frame down here and of course what are we going to expect down there the Market's probably going to reverse up and so because I'm

[14:59] going to go down I want to be aware of that and get out of the trade once it gets close to that and so here we can see that the market is in a really tight downtrend and once it breaks that I want to look to get out of the trade because

[15:14] the same thing with up here the market broke this at our resistance level well if we have a downtrend down here into our support level and it

[15:26] breaks that it's likely that the market will find support here and I want to just get out of my trade and take my profits and run so here you can see we're starting to get strong bullish bars here and as we make kind of the

[15:39] bars here and as we make kind of the final pullback in this move down I'm gonna move my stop loss down above those candles because if the market decides to you know of course continue back lower and keep going that's great if not or I

[15:54] can close out right here up about 600 and that is a great great trade to profit from and looking forward so you can see the market pretty much bottomed more about this strategy and Futures check out this video right here and if

[16:08] you want to just learn everything I know about trading I do have a course that I about trading I do have a course that I link in the description below