Choose your car first. Futures, CFDs, options, or ETFs. They all aim at the same goal, but with different mechanics. Futures come with expenses for trading and almost 24-hour action. CFDs trade in standard hours but have financing costs. Options add wings and time decay. Go with the one suited to your risk and lifestyle.
Treat product details like a flight checklist. wikipedia reference
Check specs such as tick value, trading hours, margins, and holidays. On ES, each 0.25 move is worth $12.50. That brings it down to $1.25. DAX contracts are volatile, so check the tick worth. Index CFDs often price in “points,” worth $1 or $10. Small numbers can disguise significant risks.
Your profit depends on the cost structure. Look at spreads, fees, and overnight swaps. Dividends are important too. Cash indices fall on dividend dates. CFDs often pass dividend effects. The futures price is lower than the fair value because of a mix of rates and dividends. Rolling futures quarterly isn’t fun but necessary.
Trading sessions shape behavior. Asia trades first. Europe starts the action mid-day. New York pushes hardest. Opens are volatile. End sessions often sprint. There are gaps on weekends that you can't avoid. Size your position carefully before Friday.
Use the right order types as your tools. Market for surety. Limit orders fix the price. Stops control risk or trigger entries. Bracket orders lock in targets and stops. OCO calls off the twin. There is slippage during the news. Take it or leave it.
Risk small first before going bigger. Be very careful with your margin. Risk little per trade. 1% per trade is safe. Adjust size by volatility, not mood. Stops should reflect ATR or range. Wide stops with small size beat tight stops with big size.
Use a basic playbook. Follow trends with moving averages. Trade mean reversion with VWAP. Work within the opening range. Fade prior day’s extremes. Test ideas historically before risking live. Scale up only with evidence.
Breadth tells the truth behind the news. Look at A/D lines, volume ratios, and equal-weight indexes for signals. A cap-weighted index can go up even while most stocks go down. That’s danger, not celebration.
The news is the most important thing. CPI, FOMC, NFP, tech earnings, and OPEC talk. Have an event calendar. Set reminders. Reduce size and widen stops during releases. It’s usually the second wave that matters.
Picking a broker is routine—until trouble comes. Look at the rules, the quality of the data, the speed of execution, and the support. Test small deposits and withdrawals. Ask about negative balance protection. Your money should be easy to access.
Mindset is king. Keep a journal with screenshots. Checklist before trading. Breaks to walk. No clicks for retribution. As an old coworker quipped while closing red and moving on, "Trade the index, not your ego.". Your edge is one of a kind. Guard it, improve it, and watch risk.