More from Mr_OVBE

  • 0 comments, 0 likes
  • 0 comments, 0 likes
  • 0 comments, 0 likes


Social Share

The Future Is Bright

View current stock details, or search for more

The market as a whole and individual stocks went up and down all of 2022, what a rollercoaster. Growth stocks took the largest hits, and dividend payments keep value stocks and ETFs afloat. In such a bear market with no bulls in sight, where should investors turn?

Value stocks with dividends ease the pain, but what if their price drops to a level that will take decades to recover from, even with dividend payments. Should we all focus more on the options market to prevent becoming bag holders of slow growing stocks? Neither option looks promising, and the current state of the market does not scream buy and hold. You might end up buying, and passing your stocks to your children for the recovery.

Everyone is a genius in a bull market, but the bear market brings out the pros. A lot of people have been promoting to buy the dip, but not all dips will recover. Hope does not move the market up, especially when fear takes over. 

Considering the random up and downs of stocks in a week, the pattern day trader rules, wash sale rules, and taxes, I have decided that the futures market is worth exploring. I mean, what else do I have to lose. Other than selling out of the money calls and puts, which earn a low premium right now, what is the best way to grab the bag?

In the current market, every week futures swing up, swing down, and channel sideways. Depending on news from the Fed chair, the direction will be pretty obvious. It is almost a guarantee that the futures market will drop, when the Fed chair announces that they will raise interest rates significantly. The inverse is true when they announce a plan to lower rates. That type of information makes picking a direction to place a trade, a little easier than researching and guessing if a company will report good or bad earnings.

The only immediate issue, is the learning curve of the futures market. You can lose a lot of money fast, and there are a handful of brokers that have decent simulators to use for developing and testing strategies. But sure thing is, that the futures market will always swing up, swing down, and channel sideways, you just have to learn how to read the indicators for direction.

With futures, you have the opportunity to make as little as $5 to $1,000's of dollars is you have a proven strategy and are disciplined. Let's say the e-mini S&P 500 moved five up just five points a day for a week, which is unlikely, but you captured 2 points every day. That would be about $600 for the week. It's not that easy for beginners, but for those with strategies, it is.

The futures market is complex and as I stated earlier, has a steep learning curve. I would suggest, visiting the education portion of CME Group and completing their introduction to futures courses, then learn about the specific contracts you would like to trade. If you went through all of the beginning courses it might take about week, doing two to three a day. However, I took my time and went through all of the related courses multiple times in a month. CME offers access to a futures simulator that will get you started, but it is very basic but great for learning the concepts.

I would suggest going the course material and using the simulator at the same time, to reinforce what you learn. As for as the indicators, start with the Ultimate Oscillator or the Williams Percent Range, to become an expert in understanding when futures conditions are overbought and oversold. Futures are very volatile, so what goes up, must come down, and that happens constantly through out the trading day. 

Also, stay tuned for my OVBE Academy Red Pill Futures Matrix courses, that will explain my futures trading strategies in depth. It will only be available to premium monthly members, or as a set of course books that offer free lifetime access to the network with the purchase. 

As with every investment, do your own research and invest based on strategies that you fit your invesment goals. Invest Wisely!