Good afternoon, dear readers of the financial portal Investlb.com. Futures trading refers to a very specific kind of deals and has many similarities and some differences with the Forex. Below I will suggest a simple strategy, which is based the known indicator from Forex – moving averages.
Trading strategy on moving averages
Trading strategy on moving averages
This strategy is convenient because it minimized the time spent on market analysis. Only one indicator, but it is enough for successful trading. You can trade throughout the day. Moving averages determine the direction of the trend, in which we will trade. Trading strategy on moving averages developed for Forts and trading of futures of the RTS index.
Forts – a division of RTS (after the merger with the MICEX, the Moscow exchange), a trading platform with trades in derivatives (futures and options). One of the most attractive sites for beginners, because it allows you to trade with a small Deposit (15 to 30 thousand rubles.)
The RTS index is one of the most liquid derivatives. Is calculated every 15 seconds, includes the most liquid companies (50 of which are reviewed quarterly). Provides an indicator of the state of the Russian economy.
The essence of the strategy:
- Open a position on the second candle since the start of the trading session: if the trend is downtrend, sell futures, ascending – buy. Moreover, the candle color in this case is not important, important is the direction of the market price trend).
- Place moving average on a price chart, and check in the direction of the price trend.
- Set a five-minute chart (1 candle corresponds to an interval of 5 minutes).
- Develop a system of risk management. Trading strategy on moving averages will be profitable only on the condition that 1 successful transaction will have no more than 3 losing.
- As soon as the position is open, you need to set the associated application for its closure. Stop loss is set at 0.3% of the entry point target – 1%. Not to count the percentage each time, you can develop your table in Excel.
- The most important rule of strategy: in the day opens only one trade. If the trade closed at stop loss, do not enter the market today any more.
I recommend to check what is the status of the associated request after the close of the primary trading session. If substantive session the application did not work, it is better to put the related application is in the evening session.
The principle of trading strategies with moving averages in the fact that trading futures on the RTS index with the goal of 1% a trader receives 13% of revenue. If the position is closed at stop loss, a trader loses 4% of capital. You can experiment with the entry points. For example, to open a position on the third five-minute candle, not the second, to work on the chart with a time interval and opening a position at the second hour. The convenience of this strategy is that it does not require permanent stop outside the terminal and takes about 10 minutes to open a position and check application status at the end of the main trading session.
And another recommendation: don’t be afraid to experiment. As practice shows, Forex strategy fine imposed on trading in futures. I recommend to test it in practice: open a demo account platform for Forex and futures, choose a classic pair Euro/dollar, choose a futures on the same underlying asset and check, in which case this strategy will bring big profit.
About what brokers offer for trading in futures for the Russian private investors, read here.