Monthly Archives: November 2016

How do futures contracts roll over and why?

A futures contract has an expiration, and upon expiration there are costs and obligations associated with the settlement of the contract. The contract is settled one of two ways, either physical settlement or cash settlement. If you are a hedger, or your business deals in the physical asset, then you probably would choose physical settlement, […]

The Basics of Treasury Futures

Treasury futures are standardized futures contracts used to purchase US government notes and bonds for future delivery. When you acquire a treasury future, you are not obligated to take delivery unless you hold the futures contract through expiration. Only a hedger would do that. I’m assuming you are a speculator, not a hedger, that’s looking […]

People Who Trade Futures

There are two types of futures traders, Hedgers and Speculators. They differ in one primary aspect, the hedger trades in both the cash andPaper or contract markets, where the speculator only trades in the contract market. What do I mean by cash and contracts? Cash is the physical market. For example, in agriculture there are farmers that grow corn, [...]

How To Analyze Gaps for Profitable Trade Strategies – Part 1

Gaps are a popular pattern for market technicians to analyze and from which to profit. The reason is that gaps are easy to identify, and the specific characteristics of a gap are easy to quantify. This means we can apply statistical analysis on the various aspects of a gap to determine if there is opportunity. [...]

How To Develop a Trading System Part 6

See other posts in this series… [catlist id=2 numberposts=3 pagination=yes] PinPoint Strategy – What a Difference a Day Makes Most people developing trading strategies are stuck in the notion that a strategy should work all the time, that is if the strategy is valid, then it should work. Right? Ummm, no, not necessarily. The things […]

How To Develop a Trading System Part 5

See other posts in this series… [catlist id=2 numberposts=3 pagination=yes] Evaluating Systems – Commission and Slippage This is going to be a relatively short post, for two reasons; 1) it’s super important and 2) it’s a super simple concept. People who don’t declare slippage and commission in their strategies are incompetent, and giving you an […]