Under 45’s Need Not Apply.

Introducing Rogue Traderette – Futures Trader

Hello!  You might not recognise me today, so sorry about that.  The reason I look different is because I have a brand new feather in my cap, and it’s bloody huge and you probably can’t see me behind it. 🙂

Today, I placed my first proper commodity trade.  Sure, I’ve traded commodity indices as ETF’s before but this is different.  Futures are for grown-ups.  In fact, I’ve heard you have to be at least 45 and very serious to trade them.  (Clearly, I snuck in through the side door.)

So what makes futures so different from stocks?

Well, a lot and not much.

Not much, in that you find a chart you see your edge in, and make a bet.  Same as stocks.

A lot, in that they expire and if you’re not organised you’ll end up with a front yard full of feeder cattle. (Or coffee, if you should be so lucky.)

They need rolling. The contracts, that is, not the cattle.

They involve currency conversion, and the associated risk (for me, anyways).

The different tick sizes can catch you unawares if you are dumb enough to forget to check them. (and we all have dumb moments…or is that just me?)

It’s just more mucking about, and added complexity means more room for error.

So like all things designed for adults they require an added level of responsibility.  And I am a master of responsibility (at least, when it comes to trading. I still forget to pick my kids up from school sometimes.)

• I’ve set an alarm on the AUDUSD so I’ll be alerted if I need to hedge the currency risk in my position.
• I’ve written in my planner the expiry date of my contract so I can roll it if necessary.  (In fact, even having a planner is a new adult thing for me.  I know.  I’m a disgrace.)
• I’ve predetermined my risk, as always, and know my get-out point.
• I’m sucking as much knowledge out of my commodity trading friends as I can without actually killing them.

Even so, stepping out on to fresh ground is always a little daunting….I might just have to stamp around for a while until it all becomes old hat.   Or more accurately, old cap.  With a great, big feather.