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  • Writer's pictureJerremy Alexander Newsome

How to easily and inexpensively start trading futures

Hey Real Life Trading world and friends! It’s Arabia Johnson here and I would like to spend a few minutes discus my recent journey with trading and why futures trading is amazing! 

 If you don’t mind, I’d like to take you for a quick look at my personal journey. 99.99 percent of you do not know me (yet). I went from sheer depression to making 21.5% in the first week of June alone. Let me give you some background and tell you a Real Life story. 

6 months ago I was trading paper money, making a 1 chunk of change and then losing double that. Making literally no headway. I bought high, it went lower. As soon as I sold, it would bounce. I felt like the worse trader ever. After doing 2 coaching sessions with Jerremy, I then joined the Real Life Trading Rooms and I went live back in February 2019 and began making consistent profits!! I was soooo excited! I needed the money. This sounds familiar right?

Then one day I moved my stop loss, apparently a tad too far and that’s all it took to wipe me out!! BURN CITY!  

I quit right? That's how all the good stories end?

Nope...  I maxed out my credit card to re-fund my account with the last bit of money I had to my name. Guess what? Yupp, I blew that too. In fact, as panic set in, I went on to blow my account 3 more times before I finally ran out credit cards to apply for. Jerremy was not pleased. And I had to eat a raw onion as part of punishment. 

That’s when I decided to focus on trading SPY weekly options, not because I wanted to, but because it has so many expirations to choose from it was the only thing I could afford to trade..... 

I was buying same day expiring, super OTM, garbage options and by actually adhering to smart risk parameters slowly clawed my way back with a $20R. It was torture! It took way longer than I wanted it to. Still in debt and frankly sick of dealing with unpredictable Greeks, I began looking for a better way. 

That’s when Futures found me, and as you can imagine I had NO WHERE near the account size to trade them. 

Which leads me to the questions you might have..

Why Futures? 

Aren't Futures super dangerous, expensive and scary? 

Well for one, trading Futures is excellent for anyone with a traditional 9-5 or someone with obligations that keep them preoccupied during normal market hours. If you love trading, but you can only trade at night... this could be your saving grace! 

Futures begin trading at 6pm EST and virtually trade 24hrs save a pause from 4:15pm – 4:30pm for settlement and another break from 5pm to the next evening’s open at 6pm.

A second great reason to trade Futures is that they are not subject to the PDT rule! This is huge!  

And then... for you brave options traders, the biggest reason to trade Futures is that there are NO Greeks to worry about. No theta, delta, gamma or implied volatility. Which is A HUGE advantage as any option trader in the community knows. Many choose to trade options because they enjoy the leverage options offer. However, sometimes the market maker can affect the option’s Greeks, and not always in your favor. 

We’ve all been there (unless it's just me?) the stock is soaring and your Call is seriously lagging in profits. With Futures, you get the best of stock trading (knowing for certain how the value of the position will move) with the best of options trading (enjoying leverage to amplify your ROI). Let’s breakdown the leverage aspect for a minute. 

Futures can springboard your trading, while surging your portfolio's performance and it all comes down to leverage. Unlike Equities, which are traded in dollars and cents, Futures contracts are traded in ticks and points. A tick is the smallest amount of movement a Futures contract can make, and each instrument has its own tick value and point size. 

For example: The S&P 500 emini Futures have a tick value of $12.50 and 4 ticks to a point. That means that for every tick the S&P moves you will either make or lose $12.50 with 1 contract. If the contract moves up a whole point, you make $50. You can already see how this is a big advantage over Equities where a dollar is a dollar any way you slice it. 

So why don’t more people trade Futures? Largely it’s the account size requirements. Trading Futures requires a significant amount of margin to hold a position. Also, with great leverage comes great responsibility. Risk is the single most important thing in trading, but especially with Futures. Many traders simply don’t feel comfortable putting up their own capital to trade in such size. Frankly, it can be intimidating. 

This is where TopstepTrader comes in. Have you heard of this company? 

TopstepTrader is a brokerage and community that offers YOU as a retail trader the opportunity to earn a funded account solely for day trading Futures and FOREX! 

You can choose which account you want to earn and trade with: $30k, $50k, $100k, $150k, and then buy into something called the Trading Combine®  What the heck is the Trading Combine? More on that soon.

Trading Combine costs about 1R, which buys you an entire month to pass their 2-step evaluation. Need more time? Throw them another R. There’s no limit to the amount of time you take to pass the test. Simply follow the rules and you’ll earn yourself a funded account. The biggest advantage to this process is the peace of mind, knowing that you can’t lose more than you put in!!! That's amazing! 

 If you break one of their rules, you can reset the account for $99. This is THE safest way to trade Futures in my opinion and the cost of evaluation is ridiculously low. Most programs like this will charge you anywhere from $3k - $15k just to buy in, and if you lose, it’s your own money you’re losing first. TopstepTrader takes trading with OPM to a whole different place with their system. 

TopstepTrader changed the game for me! BECAUSE I DID THIS and I am murdering it right now!  Not only do you get the funding you need, but you get an amazing set of Risk Mitigation rules you HAVE to follow, which was a no brainer for me. I went from depressingly in the hole to making 21.5R in the first week of June alone!!! REAL MONEY! I'm flipping out over here, paying bills and dancing the money dance!! 

Excited? I know I was when I heard about this.

You can follow these 5 simple steps  [the same steps I followed] and you too can live long and prosper!

  1. Take the RLT Futures course. There’s way too much you need to be aware of to just breeze over an Investopedia article. This course is insanely comprehensive and 100% FREE of course, so do it. You’ll be glad you did.  I mean... you knew RLT had this course right?! HAHA It is the only free futures course on the entire internet. 

  2. Research your Contract Specs. Each Futures instrument has a different tick size, tick value and point size. You can find all the information for your instrument of choice on the CME Group site. 

  3. Watch Jerremy’s interview with Kevin Adamick from TopStep Trader to get an in depth look at the TopStep program: what it is, how it works, rules, and performance metrics needed to earn your account! In this video is where you can learn more about what the Trading Combine is.

  4. Paper trade a “mock Trading Combine” before signing up for TopstepTrader. You might as well iron out your strategy and get a realistic expectation of how long you will need to complete your TopstepTrader goals. 

  5. Pull the trigger. The only thing left to do now is to get into the Futures market and start skyrocketing your P&L. 

That’s all there is to it. Don’t fear the Futures. ;-) Trust me, I’m just a high school drop-out who still counts on her fingers, if I can do it. You can do it! See you in the winner’s circle friend. 

~ Arabia Johnson 

“Trading the Futures market is like moving to the grown-ups table at Thanksgiving; it’s the same meal, but you get a bigger plate and the conversation is so much more rewarding, and the table manners are a little different.” – Caryn Shuken

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