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Unless you understand how trading the news work, I'd suggest you learn other strategies first before tackling this one. It's one of the easiest traps for newbies, very attractive indeed, but the losses and quick and deadly.
The other thing I'm concerned what you just said "there is no limit to how many eminis I can trade per day". This sounds like you're planning to go at it to the max. Start at one and watch your overtrading problem. Eminis and overtrading don't mix because in a few weeks, your accounts may lose 1/2 the value and in 3 months, might be nothing. Leverage is high but so are losses. |
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Thanks for the good advice torero. What you say about the news makes perfect sense. But you know, I was curious since when I see on CNBC when they report on a breaking news for a company and the stock has gone up and I wonder about the people who got the information before others and were able to trade the stock before
the crowd. I was just wondering how they get this info so quickly. But not to take away from your statement of caution. Because as a newbie, I can see how difficult it can be to determine what the effect of a breaking news is on a particular stock and also when it is too late to trade a breaking news stock, and how long to hold on to a position or risk the stock changing direction.
Also, to clarify about my statement of "there is no limit to how many eminis I can trade per day" I didn't mean using the max potential of margin, but rather, to be able to do more trades than I can do now due to the daytrading restriction of 3 roundtrip trades in a 5 day period. I feel that I need more trading opportunities.