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 In part 1 of Day Trading Futures, we examined the importance of Liquidity and Institutional Participation in choosing a
futures contract to trade. Now, lets dwell into some contract specifics that you
would be well advised to consider carefully.
In this part, keep in view that the worst state of mind that a swing or day trader can be is in a state of
distress. The need to remain calm and focused is of prime
importance in swing and day trading futures. The following factors directly or indirectly
contribute to a trader's state of mind:
Contract Size/Tick Value
 Choose a futures contract that has a tick value that suits your
account size. There is no magic number that can be used for all traders but as a
guide, if you find yourself placing too "tight
stops" that are well within the "noise parameters" of that contract, then
the contract is probably too big for you or that your trading methodology is not
sound yet. This way, you will not be giving your trade the "space" it deserves
and you will find yourself stopped out of otherwise good positions.
Futures Trading Platform
 Do you have fast electronic access to the markets or do you have to
go through a human broker to execute your trades? Is there a robust backup
system when your primary means of order execution is disrupted? Do you have
direct access to the markets or are your orders routed through an intermediary?
These are all important questions you need to answer before you start day trading futures. In this day and age, there should be virtually no excuse not to have
direct access to the markets and almost instantaneous trade executions!
Market Hours
 Different futures contracts due to the fact that they are traded in
different time zones, have very different trading hours. It makes little sense
if you forsake your quality of life over day trading futures in a market during the wee hours of
the morning, on the other side of the world! Of course, this very much depends
on the individual but for the sake of long term success and health, this factor
should be given careful thought. There are however exceptions like the e-minis
(S&P500 and Nasdaq100) which are virtually traded round the clock on Globex.
Liquidity is very much less than Regular Trading Hours (RTH) but is still better
than some other alternative futures contracts traded elsewhere round the
globe.
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