Start by selecting your instrument. The main choices are futures, CFDs, options, and ETFs. They all aim at the same goal, but with different mechanics. Futures trade nearly 24 hours and charge exchange fees. CFDs mirror stock market hours with overnight swaps. Options bring flexibility but decay over time. Choose the product that matches your capital and focus.
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Tick size, tick value, hours of trading, margin tiers, and holidays. For ES futures, 0.25 points equals $12.50. That brings it down to $1.25. DAX futures move more, so be careful with the pip value. A lot of index CFDs employ "points" that cost $1 or $10 each. Small numbers can disguise significant risks.
Costs determine whether you eat or go hungry. Spreads, commissions, and financing charges. Don’t ignore dividends. On days when dividends are paid, cash indexes go down. CFDs often pass dividend effects. Rates and dividends push futures under spot fair value. It's not exciting to roll contracts every three months, but it keeps the train on the tracks.
Market hours drive activity. Asia kicks off. Europe adds volume later. New York dominates after Europe. The start can be choppy. The close can run away. You can’t escape weekend gaps. 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. Brackets pre-set exits and stops. OCO cancels the other order. Expect slippage in fast news. You must accept it or avoid it.
Use smiles first, then bites. Protect your margin at all times. Low risk per trade. Limit risk to 1%. Adjust size by volatility, not mood. Set distance using ATR or the most recent range. Wide stops with small size beat tight stops with big size.
Choose a simple playbook. Trend with a moving average and higher highs. Trade mean reversion with VWAP. Work within the opening range. Fade prior day’s extremes. Test ideas historically before risking live. If the chart says it needs more money, give it to it.
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 a warning, not a victory lap.
The news is the most important thing. Watch CPI, Fed, NFP, earnings, and OPEC. Have an event calendar. Set reminders. If you have to exchange releases, make them smaller and move the stops wider. The follow-up move is the real one.
Broker choice seems dull until it matters. Check regulation, data feeds, execution, and support. Do trial runs with deposits and withdrawals. Confirm broker covers negative balances. Your money should be easy to access.
The mindset is what matters. Use screenshots in journals. Checklist before trading. Breaks to walk. No clicks for retribution. Remember the line: “Trade the index, not your ego”. Everyone’s edge is personal. Protect it, refine it, and manage risk.