The Best Futures Trading Strategies

This post returns to what I know best; futures trading. I wanted to take a look at some of the most popular futures trading strategies so in this article we’ll examine the Donchian trading strategy.

Futures Trading Strategies (Donchian Strategy)

If you’re not familiar with it, the Donchian trading strategy is a breakout trend following strategy. When price breaks above or below significant price high or low, the strategy dictates the trader should create a position long or short.

Breakout, Trend Following Strategy

If the price breaks out above or below these levels, the trader’s objective is to remain with the trade for as long as possible, so the strategy aims to capture mid to longer term trends.

To visualize this on your chart, your charting package will be likely to include the Donchian Channel indicator. Start with the raw price chart of the instrument you’re following, a simple price line, candlestick or barchart all work the same.

Always In

The always in tactic ensures the swing trader always hold a position in the instrument they are trading. Once the initial signal to enter long or short is given, the trader remains in the position until the opposite signal is given.

Protective Fixed Stop

The other way is to, once you’ve entered the market on the stop, you can attach a stop loss order to the position. And the stop loss order attempts to manage your risk, to limit your risk.

Protective Trailing Stop

As the name implies, a trailing stop trails the price. It does this only if the price moves up or down in the direction of the trade. A long trade that sees more unrealized gains as the price moves up will see the stop-loss also move up in tandom.

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