How To Trade Futures Contracts [Full & Live Explanation] | Trading Tutorials
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- เผยแพร่เมื่อ 30 พ.ค. 2024
- We cover all of the basics on getting started in trading the futures market! Stick around until the end of this trading tutorial to see LIVE futures contract price action.
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00:00 - Intro
01:25 - How the Futures Market Works
03:52 - Why the Future?
08:43 - How WE Use Futures Markets
13:12 - Understanding Points & Ticks
15:05 - Common Symbols & Sizes
19:48 - Real Examples of Point & Tick Values
22:54 - Contract Naming
24:22 - Futures Margin Requirements
38:46 - Futures Commissions & Fees
41:17 - Futures Tax Advantages
42:34 - LIVE Futures Price Action
If you are brand new to the futures market and want to learn how to trade futures, this is the crash course for you. In this trading tutorial, we will talk through the basic futures market concepts.
The futures market came into existence for people doing business to keep their future costs predictable. It was simply a way for both parties doing business to hedge against future market fluctuation. This actually required that both parties involved in the trade fulfill their end of the obligation when entering into a futures contract agreement. This is what makes futures contracts different than options contracts. The other key difference is that futures contracts are tied to underlying commodities and NOT stocks or companies.
In todays day and age we use the financial (or commodity) futures market to trade against index prices, currency pairs and even interest rates. We are not looking to ever actually take delivery of the product that we are trading, instead, just keep the difference in the contract price should we be correct about the future direction in prices. If you think the price of the commodity is going to go up in the future you want to become a buyer or go long the contract. If you think it will go down then you want to do the opposite and be a seller of the futures contract.
Understanding how futures is priced is a key component as well. They are not directly tied to a dollar value. Instead they are tied to a point and tick value. Futures points and ticks are going to change on a per contract basis. Its very important that you understand the size and value of a tick on the given contract that you are trading. There are a few common ones that most traders should know. The /ES E-Mini S&P 500 being the most popular.
Contracts are also named in a very specific convention. Because we know futures contracts will expire at a certain date, they have a month and year attached to the symbol that represents the commodity. The letter in the middle will always represent the month of expiration and the numbers at the end will always represent the year of expiration.
Futures margin can be an intimidating thing, but fear not, it's simpler than it may seem. Day margin for futures is the amount in your account that is needed to initiate a new position. We are only putting up a fraction of the notional value of the futures contract to be able to trade it. We are borrowing the rest from the broker.Day margin applies from 9:30 to 4:30 EST. Initial margin is the amount required to hold a futures position after the 4:30 bell. This amount is usually much higher than the day margin rate because the broker needs to use this cash to settle up with the exchanges. If you do not meet this requirement, you will likely get whats called a margin call, asking to close the position or deposit more money into the account. Maintenance margin is the amount of capital required to hold the position against any drawdowns after initial margin has been met in the extended hours. Each futures broker will also charge different commission rates so be sure to look into those before choosing who to go with.
Something thats not often talked about is the fact that there are actually tax advantages to trading futures over stocks, options and forex. You will be taxed in a 60/40 structure where the majority of your futures contract trading gains will be taxed more favorably as longer term capital gains as opposed to the 40% being taxed as short term capital gains. As always please consult a tax professional for you own unique situation.
DISCLAIMER: The information provided in this video is for informational purposes only. It should not be considered financial or legal advice. I am not a Registered Investment Advisor. Buying and selling financial instruments is highly speculative and carries risk.
![How To Trade Futures For Beginners | The Basics of Futures Trading [Class 1]](http://i.ytimg.com/vi/TC8b9bL0900/mqdefault.jpg)
![How To Trade Futures For Beginners | The Basics of Futures Trading [Class 1]](/img/tr.png)
![How To Trade Futures For Beginners | The Basics of Futures Trading [Class 2]](/img/n.gif)
i love your videos. look forward to and learn so much from every one. just a heads up around 20 min mark there's a little mistake on screen , you wrote 3835 - 3850=85 instead of 3735-3850=85. doesn't really matter just wanted to give a heads up.
Quinn! Great catch! Thanks for the heads up, unfortunately it will be what it will be, however the concept hopefully still makes sense. Thanks for tuning in, and this will be pinned so others are aware of the typo as well.
Hey guys, I hate to be That guy, but this is wrong. It should be 3835-3750=85. That's what was said and that's how the math works.
@@jrstegner I just saw the comment for the first time and hoped someone corrected them; you did! Thanks for sticking up for math in the quick vid age!
So in regards to that equation, isnt the result of 85 points, not ticks?
Why is he multiplying it by 4? Isn’t he supposed to divide it by 4 to get to the number of ticks, as in the previous slide he multiplied the ticks by 4 to get a point...
@@martink2347 I appreciate you bringing this up, as it made me take a much longer look and helped me understand better (I think). So, points are to the left of the decimal and ticks are to the right (just like 1 dollar is to the left of 1 cent). So it takes 340 ticks to make 85 points, just as it takes 100 cents to make 1 dollar.
Now I have a fundamental knowledge. Other channels can’t or don’t give you such a succinct comprehensive explanation.
Appreciate the comment Franklin! Hope your futures trading journey is off to a great start.
Agree. Big thx to channel creater !
This was a game changer introduction to futures. Simple it might be but no one yet has been able to go thru simple stuff like this.
@@TradeBrigade I have to agree. You are pretty amazing Matt.
I’m a year late and this is still the most informational and in-depth explanation I’ve seen on the internet, and it’s completely free. It’s broken down and explained perfectly. Thank you so much.
Glad it was helpful! Hope you have nothing but success in your futures journey.
2 years late and its still the most informational and in-depth explanation
2 and a half yrs late AND STILL 🔥
I like how he explains it like I’m 5 😂
Terrific training! A free TH-cam video equal to a $100 seminar. Thank you!
Enjoy! thanks for coming out to the tutorial. Hope you have nothing but success in your futures journey.
If you coming from forex like I am, I PROMISE YOU…… This video is gold. We got the strategy already yall. It’s the exact same as what we do. This is gonna give us everything we need to start trading futures as soon as you’re done watching. THANK YOU for this video man.
Thanks for the encouragement
@@Kaye321 no prob 🤞🏾
Got to realize the same thing. Just a quick question, what broker would you recommend?
@@ronisworldwide I’m in top step prop firm change and they use tradovate.
Thanks for the comment FlashParty!
Bro. Seriously, you just gave the best breakdown on futures I've come across on here. Thank you very much for putting this out there.
You bet! Hope you have nothing but success in your futures journey.
Dude I've been learning futures on my own and found myself stuck in a rut about a few things. Mainly margin requirements. Couldn't figure it out for the life of me and no content creators seemed to prioritize it much until I came across this video. Thanks so much for that information it helped me out a ton! The tax breakdown was an added bonus for me as well. You've got a new subscriber! Thanks man!
Love to hear that we could clear some things up for your futures journey!! Wishing you nothing but success, and hope to see you around the channel more often
Just now starting futures, coming from options and I was confused with margin also. Helped a lot, how is your futures trading going?
I'll watch this video again simply because it was explained so well and my intelligence wasn't made fun of lmao. thank alot brigade
most dont do well teaching, idk why they even have youtube channels, you do an exception job teaching, teaching is skill that most dont have
thank you for the good work
I appreciate that! Thanks for checking out the tutorial, and taking the time to leave a comment. Hope you have nothing but success in your futures trading journey.
Finally! Margin explained in a simple and easy way that makes total sense.
Thanks for checking in!! Appreciate it and glad you found the explanation straight forward. Hope you have a great week and futures trading journey!
Matt: Great overview. Thanks for all you do to educate us.
My pleasure J!
Great job explaining the difference between a tick and a point and how they are related, not just their individual definitions.
You bet! Thanks for checking out the tutorial. Hope you have a great futures journey a head
19:48 Real examples of point and ticks. FINALLY - a clear and concise definition of Points and Pips COMBINED with chart examples and the calculations required to determine the dollar value of a move., Thanks Trade Brigade.
Glad it was helpful!
Such a great video. You are very good at explaining things in consumable bites. Thanks, sir! 👍
Appreciate that Mike! Glad it was digestable and I hope you have a great trading week!
@@TradeBrigade And you as well!
Best video about futures I've ever watched. Very comprehensive, well-explained and easy to follow. My only regret is that I have but one like to give 😊
Really appreciate this comment! Thanks for tuning in!
Thank you for taking the time to make this video. This was a very helpful tutorial. Comprehensive and yet easy to understand. Must still review to soak in all the nuances.
No problem! Thanks for taking the time to tune in and absorb it all. Appreciate you stopping by
Great introductory video, Matt. I’m constantly amazed at how well you write and draw during your videos.
Appreciate it Matt! Thanks for tuning in
What an awesome video!!! I’ve been looking for a breakdown of the value of future contract and this is hands down the best explanation I’ve seen. Thank you so much!
Love to hear this made it click! Thanks for tuning in and taking the time to comment. Best of luck in your futures journey!
what an extraordinary presentation, and very humble person sharing his knowledge patiently with others. thanks a lot for your time and teaching, really appreciate for all of the effort.
You got it Edu! Thanks for tuning in and wishing you the best with your futures journey.
Still a great course in 2023! Thank you!
Cheers!
Thank you so much for this video. The best video I have ever seen on this topic. You explained everything I wanted to know in the most perfect way !
Glad it was helpful! Best of luck on your futures trading journey
Great job! Thanks for teaching this. I've never understood futures trading until now. Keep up the great work.
Glad you now have the tools and understanding to get started! Wishing you success in your futures trading journey. Thanks for tuning in!
@@TradeBrigade You're welcome and I look forward to watching your future videos. I learn a lot!
Thanks! Great video and very informative. I loved the examples too.
Appreciate it Alex. Glad there was value here and best of luck on your futures journey into the new year!
Awesome video Matt. Watching this for the first time now and hearing the /ES values discussed at the time you made this video as opposed to the levels we discuss now during your live pre market really shows how far we've come. I'm looking to start day trading the /mES. Thanks again.
Great simple to the point explanation of the futures market.
Appreciate that. Thanks for taking the time to tune in and leave a comment. Wishing you nothing but success in the futures market.
Wow. Thanks so much for this video. I love the layout and the way you taught it. It was like being in a class. Futures always confused me but now you made it way more understandable for me.
You are so welcome! Glad it was useful and will serve as a good kick start to your futures journey. Best of luck out there!
This is the best video I have watched about futures basics so far. Very thorough and well presented! Thanks!
Appreciate you tuning in Mike! Glad it was helpful, and wishing you the best on your futures trading journey.
I needed this to get a solid overview of futures.
Cheers! thanks for coming out to the overview and taking the time to leave acomment. Hope you have nothing but success in your futures trading journey.
I found your channel today and i have been eating it up. Great content explained in a simple matter. Good stuff!
Welcome aboard!
Ive been looking for something like this a while thank you! Love the channel
Glad you enjoy it! Hope this kick starts the futures journey for ya!
Wow, I’m speechless 😊 I was looking for this video for ages. Futures always so confusing for me and you broken down the complex stuffs to newbie like me to understand futures. Thanks a lot ☺️
Glad it was helpful!
Nice brake down for the week. Really enjoy your vids very helpful when getting ready for the week. Thank you.
Glad to help!
I love the way you explained this. I was searching for a video just like it thank you
Cheers Kyle! thanks for coming out to the tutorial and taking the time to leave a comment
Took me a while to get to this video but I really appreciate it. Thanks again for a great informational video!
Glad you found it! Futures are a great tool and something I have been trading more often than not recently
Best futures explanation on TH-cam. Thanks for the clear concise information.
Appreciate that sentiment! Thanks for tuning in and taking the time to drop a comment.
Super helpful as someone transitioning from Options to Futures. Best overview I've found. Thank you
Cheers! Glad to have given you a solid foundation. Hope you have nothing but success in the futures journey.
Great video. Answered all my questions. Thank you!
My pleasure!
Great content, well executed, professionally delivered, nice visuals and terrific voiceover. This is some of the best TH-cam financial/trading content out there. Very well done -- you've made learning about Futures much easier.
Appreciate the feedback! Hope you have nothing but success in your futures journey.
Thank you so much bro, you’ve earned a follower for life! This is life changing, you don’t know how long I’ve been trying to understand this market. You broke this shit down so easily! 🙏🏾🙏🏾🙏🏾
Super glad you found the breakdown useful. Thanks for tuning in and taking the time to drop a comment! I appreciate it
Thank you for all the information. It's so helpful and you do such a great job explaining everything.
You are so welcome! Best of luck on your futures journey
This is the best video I've seen on futures! Very thorough!
Thanks! Hope you have nothing but success in your trading journey.
You are an absolutely fantastic teacher. Nicely laid out and easy to understand. Thank you for taking the time and doing this. I have become a paid member of yours.
Cheers Natraj, appreciate the feedback as always. Welcome to the team!
first rate video. Had a lot of questions coming in ( options trader transitioning into futures) and you not only hit each of my questions, but in a well structured easy to understand format. Great speaking talent ( clear, concise, pleasant to listen to)
Thanks EB. Glad to hear I could make it a pleasant experience. Wishing you nothing but success on the futures trading journey!!
Terrific and very informative. This helped me a lot and is far and away the best video on futures that I’ve watched. Thank you!
Glad it was helpful! Thanks for tuning in and taking the time to leave some feedback. Greatly appreciate it
One of the best explanations ever. Love the teach and test approach you take here.
Wow, thanks! Hope you find nothing but success in futures!
Thanks Matt looking forward to have one on one lesson soon I have some free time. Appreciate it
Sounds good Charef! Ill look out for anything that comes through
Clear and articulate. Great video.
Appreciate it Alex. Thanks for taking the time to drop a comment.
Wow. Hats off to you the way u explained everything! U made it so easy to understand. Amazing
Cheers ! Glad to have helped out in your futures journey. Wishing you nothing but success out there.
Fantastic content, has me coming back multiple times and taking notes. 🙏🏻🚀
Thanks for stopping by the tutorial! Hope you have nothing but success in your futures trading journey.
Definitely the best video for beginning futures traders who is starting from scratch. Very informative and very well presented. Thank you.
Glad it was helpful! Wishing you nothing but luck on the futures journey.
Such quality content!
Appreciate that James! Glad this was helpful
Excellent course with detailed explanations… thank you! You covered exactly what I needed to understand.
Wishing you nothing but the best in 2024 for your futures joureney!
Great video. Very well put together. Really appreciate it!
MY pleasure! Thanks for checking out the tutorial
Very helpful, couldn’t be easier to comprehend. Thanks so much, I’ve learnt a lot from you.
Appreciate you taking the time to drop a comment! Best of luck in the futures world!
Video was clear and concise. Thank you, I have found value in it.
Glad it was helpful! Best of luck on your futures journey
That was perfect. Really clear and very very helpful. Thanks
Glad to help! thanks for taking the time to check out the tutorial
I think I researched options for like 2 years before I ever felt comfortable putting on an actual options trade... That was like 6 years ago and now kinda doing the same with futures. They are fascinating as shit, but man I can see that stuff taking my money fast!!! 😆
They're a very volatile product for sure. Tick size and value are paramount!
Learn options on futures, which allow for better loss mitigation, whilst also providing greater % ROI yields. You also don't have to be concerned with initial and maintenance margin requirements, which enable you to hold overnight, if necessary--purely for the price of the paid premium (when buying options) 🏦🤙
Forex traders here like... 😂😂😂
Big influx when all the influencers started talking about futures over options. Forex up next... wont last. Cant b book futures on a regulated exchange 🤣
We know how to trade we’re just not familiar with contracts and broker
@@brikeps5465 It's very similar.
Sad times lmao, finally here after prop firm screwed me for 20k
What do you mean by the prop firms screwed you up?
@@user-dp4tu4dt9s
Great deliberate explanation of the concepts. the best I have seen so far.
Glad it was helpful! Best of luck on your Futures journey
Thank you so much for this vieo, makes everything cristal clear!! Straight to the point
Cheers! Thanks for stoping by
49:44 Wonderful explanation of futures contracts. You must have teaching background. Plan to follow you. Thank you very much! 😊
Very welcome Mark. Thanks for tuning in and hope to see you around the channel more often.
Great video, it was just in time to satisfy my mind. Thank you Trade Brigade!!!!!
Appreciate you tuning in Richard. Best of luck if your decide to pick up futures trading!
This is the best video i've seen so far . Excellent info and explanation
Glad it was helpful! Wishing you nothing but success in your futures journey.
Amazing teaching skills right there! Really enjoyed the video, will look further to your other content as well. Learned a lot today!
Awesome, thank you for tuning in and taking the time to leave a comment. Much appreciated.
Phenomenal video.. The way you go over and explain every topic makes it amazingly understandable. Keep up the great work..
Thanks for checking out the tutorial video! Appreciate the comment. Hope you have nothing but success in youre futures journey.
Thank You.. I wish the best for you also @@TradeBrigade
Right when I’m about to change my life Forex props up in flames.. Futures here I come 🤓
Futures are superior any how.
Great video - thanks so much! I have been wanting to learn about commodities and futures, and this gave me a solid beginning, and you explained it so well, it's greatly appreciated.
Glad it was helpful!
Thanks for this video! I started futures last week on Topstep and im a scalper. First week I made money but the whole week, my commissions was sky high from all the trades I did. NOW I understand i need to focus on more profitable trades then more trades for pennies! Thanks 😅
Cheers! Glad the video was helpful and I hope you have nothing but success in the futures journey and Topstep combine
This is a great video. I really needed this. Thank you for the depth of information.
Glad it was helpful!
Great video! I don’t know anything about any market. This video is very well made and easy to follow. Thank you for your time and knowledge.
Glad it was helpful! Hope you find success in your trading journey as you learn more
Very Fine Explanation. Calm, Clear, Concise. Looking forward to watching more of your training Videos.
Appreciate that Captain!
great video and content. you’re certainly a great teacher on many levels…
I appreciate that! thanks for tuning in and taking the time to leave a comment. Hope your futures journey is off to a killer start!
Definitely a big fan after this video. Very simple and straight to the point. Fire content🔥🔥🔥🔥
Appreciate it! thanks for tuning in and taking the time to leave a comment.
I've been looking for this information everywhere and you've explained it so perfectly and clear thank you soo much!!
Glad it was helpful!
This is a phenomenal explainer on futures trading! Thank you!
Cheers! thanks for checking out the tutorial video
This was exactly what I was looking for . Thanks!
Glad I could help!
Great video in very easy to understand format. Thank you!
Glad it was helpful! Thanks for coming out to the tutorial episode
This is the BEST most simplistic explanation. Thank you
Glad it was helpful! Thanks for tuning in and taking the time to drop a comment
My man, what a great tutorial. Well done and thanks for posting
You bet Masilo! Thanks for tuning in and dropping a comment.
Awesome content. Very well organized therefore easy to understand.
Looking forward to checking out the other content on this channel.
Thanks for sharing your insights.
Thanks for tuning in James! Hope to see you around the channel more often. Best of luck on your futures journey
Thanks for the clarification, this is really helpful👍
Glad it was helpful!
Thank you Trade Brigade for this video! I've been searching the web to learn more about Futures trading and had a hard time finding a decent site or video that explains the basics. This is exactly what I was looking for and more! I feel as though I have a stronger foundation to build up on so again, THANK YOU.
You bet Rose! thanks for takign the time to leave a comment and I wish you nothing but success in your futures journey.
Best video explaining futures I have watched.
Thanks for the positive feedback! Means the world. Hope you have nothing but success in your futures trading journey.
@@TradeBrigade you are very welcome. Thank you for taking the time to make the video!
Great video in futures trading! Thank you for your patience in explaining the intricacies of this subject. You are a great teacher and I believe you could teach any subject for your students understand fully in any medium.
Appreciate that! thanks for checking out the tutorial. Wishing you nothing but success in your futures trading journey.
man this is the best video i came across. absolutely loved it
Cheers! thanks for checking out the tutorial. Hope you have nothing but success in your futures trading journey.
Best explanation of Futures, I've seen so far!! Thank you!!
Glad it was helpful! Thanks for tuning in and taking the time to drop a comment
this was the best futures intro explanation ive seen yet keep up the great work
Wow, thanks! Appreciate you taking the time to leave a comment.
Wow!!! Thanks for a great video that filled in some learning gaps for me. Great job!!
Glad it was helpful!
Excellent content and very clear explanations. By far the best I have seen on the topic. Thank you. 👍
Cheers! Best of luck with the futures in your journey.
Best explanation of trading Futures, I've seen so far!! Thank you!
Glad it was helpful! Thanks for tuning in and taking the time to drop a comment
Lovely explanation & to the point!
Glad it was helpful! Thanks for checking out the tutorial!
This is hands down the most complete explanation on futures out there. Thanks for the education.
Glad it was helpful! thanks for stopping by, and wishing you the best of luck on your trading journey.
Great video! I just started trading Futures and this helped a lot!!! Thank you!
So glad the video was useful and valuable. Thanks for taking the time to drop a comment and best of luck in your futures journey.
Thank you, for this thorough explanation. Much appreciated! 🙏
You bet! Best of luck on your futures journey.
Massively helpful. Thanks for the video!
You bet! Appreciate you taking the time to drop a comment. Stay green out there.
Simply the best introduction to Futures!! Great stuff.
Appreciate that! thanks for taking the time to check out the tutorial and leave some feedback. Hope you have a killer week.
This was so informational. Thank you so much!
Glad it was helpful! Thanks for tuning in
Great explanation of futures trading. I'm just starting to learn about futures and this helped a lot.
Great to hear!
Simply superb. A must watch for anyone looking to start futures trading.
Appreciate that! thanks for tuning in and taking the time to leave a comment. Wishing you nothing but success on the futures trading journey.
Thank you for taking the time out of your life to educate me sir. Much appreciated.👍
You got it! thanks for coming out to the show and taking the time to leave a comment, much appreciated and hope you have nothing buy success in your futures trading journey.