Silver Futures via /r/wallstreetbets #stocks #wallstreetbets #investing
For everyone who doesn't know what a future is, in really simple defination, buying or selling a contract of a security that predetermines the price at an expiration in the future… hence the reason it is called Futures.
In really basic form, you are trading a real product that is trade like a share however has the parameters of an option contract. Yes, I said REAL product… if you trade Gold and you hold until expiration, you are sent real gold.
Another thing you need to know is that futures have something called a tick value. A tick is just the movement of the future (like how a stocks moves 1 cent up and down). Each future has there own tick value (For example: Nasdaq – $5 per tick, S&P – $12.5 per tick, Silver – $25 per tick, etc)
There are 3 different types of futures: Standards, Minis and Smalls. All it means is that there are less in the contracts which means there is a different tick value and this usually means that there is smaller volume.
Now that is over with traditionally, future contracts are super expensive (For one contract of NQ (Nasdaq) it is usually 17k). However, there is a future broker called Tradovate and they reduce all the prices of future contracts. For example: Nasdaq on ThinkOrSwim is 17k per contract while on Tradovate it is $550 per contract. So Instead of needing +3400 ticks for Nasdaq for 100% return, you only need 110 ticks per 100% return.
Also Futures are open 24/5 and open on Sundays and don't have the PDT rule.
Now you have the basic information and mathamatics of what I'm going to talk about, lets start.
The futures I want to talk about is Silver Futures (/SI) and Mini Silver Futures (/SIL). The reason is that I want to use these two is that I have come up with a simple strategy that takes a bit of time to learn and master, maybe close to 2 weeks to a month. Just like how people use ES to determine where SPY is going, we are going to use /SI to determine where /SIL is going. AND BEFORE YOU RAGE and quote me saying Mini futures have a smaller tick value I get it calm down. Traditionally, /SI contract cost +$17k and /SIL contracts cost +$3K however, on Tradovate it reduces it to /SI costing $9350 and /SIL costing $55. YOU ARE READING IT RIGHT, only $55 per contract where you would usually pay more than $3k for it.
So now you are think it sounds good, what now? I need to go into a bit of context. With Gold Futures, you have a tick value of $10 per tick and with the Mini Gold Futures having a tick value of $1. Now you are slowly freaking out, wipe it away. /SI tick value is $25 and /SIL tick value is $10. this means you only need 12 ticks of /SIL to have 109% profit, now only that, /SIL is reasonably volatile which means you can make that $55 really quick.
Now the strategy. You can have multiple charts on Tradovate so you can have /SI up as well as /SIL. You do your research, DD and other crap you think of doing before getting into a trade on /SI because /SIL follows the direction of where /SI is going. So, if /SI moves up /SIL will follow. This is why you want to your DD on /SI because it will give you more of an idea where /SIL will go.
I'm not saying this will get you rich infact, futures are way more dangerous than Options. However, if you practice on a Demo account on Tradovate and get use to it, you'll reap your rewards. I have challenged myself multiple times having accounts from 2k, 1k and $500 and over a week getting returns of 500%-2000%. My Results was turning my 2k account into 8k in a week, my 1k into 5k and my 500 account into 10k. HOWEVER, I'm not promising these returns for you, I worked on the strategy and have been trading futures for a while now, Silver being one of my favourites.
Submitted November 11, 2020 at 07:54AM by MyNameisMaccaOG
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