Research and Trade Management · Futures Trading Guide
A complete plan connects research, contract knowledge, execution and cash controls. Its value is that another person could understand the decisions before seeing the result.
Describe the market and the hypothesis
Start with the exact product, venue, maturity selection and economic reason for the strategy. State the data source, timestamp rules, signal and earliest valid execution time. Include the conditions under which no trade is allowed. A phrase such as buy strength is not sufficient unless strength and the action it triggers are defined.
Create a complete hypothetical trade card
Suppose a fictional linear contract has a $10 point multiplier. Entry is planned at 100 and the stop trigger at 97. Intended price risk is $30 per contract, with $10 budgeted for costs and execution uncertainty. A $100 trade allowance permits two contracts under that estimate. Separately record the actual required margin and an adverse gap scenario. A fill below 97 can exceed the intended loss.
Specify operations and the contract lifecycle
Record session settings, order types, partial fill handling, backup access and how outstanding orders are checked. Set an exit or roll deadline ahead of relevant broker restrictions and delivery dates. List events that require a new cash stress review. State who can change the plan and how a revised version is distinguished from the rules used for earlier results.
Close the loop with evidence
After every trade, reconcile fills, fees, daily settlement and any funding or currency effects. Review process compliance separately from profitability. At scheduled intervals compare actual results with tested assumptions, including losses and missed trades. Advancing through this guide does not certify trading readiness. The next step is demonstrating a reproducible process, understanding the obligations and deciding whether the risk fits the available capital.
Try it yourself
Your plan fits two contracts within intended trade risk, but available cash cannot meet the broker’s collateral requirement. Is the trade ready?
Show the worked answer
No. Both risk and collateral constraints must be satisfied with appropriate reserves. Reduce the proposed exposure if a valid smaller size exists, or do not trade.
Further reading
- CME Group: Futures trade plan
- CME Group: Position sizing
- CME Group: Position and risk management
- CME Group: Expiration and settlement
Educational material. Prices, margins and strategy examples are hypothetical unless explicitly identified as contract specifications. They are not trade recommendations. Futures losses can exceed deposited collateral. Product terms and eligibility vary by venue and jurisdiction.
