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Novice Daytrading - Answers (cont)
Yes, we are trading the S&P 500 futures contract on the CME (Chicago Mercantile Exchange).
You say to your broker:
Here is additional information and a good overview of how to place orders.
24) The S&P fell 13 units yesterday, i.e. Tuesday. If I had a sell order on three contracts entering early in the morning and exiting in the afternoon, i.e. one trade (or is that 3 trades) I would have scored big-time, Am I correct?
You are correct. We attempt to do this and with our new parameters the percentage number of times we do this will increase (catch bigger moves). You would have been very happy that day.
Bear in mind, the opposite can occur, and you'd be very sad on that day.
You must have sufficient capital to withstand losses such that, if you were on the wrong side of a big move, you'd still have money left in your account to trade the next day. If you do not have that much capital, you shouldn't take such wide risks.
25) I know this would be a very risky proposition but if it came off (13 point gain) how much would I have earned? I have done my own calculation but want to ensure I have the basics in trading and calculating earnings correct.
13 S&P points X $250 per X 2 contracts = $6,500 (US)
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