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Trading - Must Learn Topics - What Is Contract Rollover?
To learn more about Trading visit http://daytradervideo.com In previous videos on day trading in the market
we discussed what exactly a contract is. Furthermore we talked about what the emini markets are
and what the value of contracts are. These are some basics that you definitely need to
learn if you are going to become a futures trader.
If you remember back in that lesson we discussed how the futures markets came to be. They started
as a result of both farmers and the buyers of commodities wanting to know ahead of time
what type of money they'd have coming in prior to the harvest.
So, they created the futures market to be able to predict their profits ahead of time.
This was very useful for them. With that being said the most important thing
to understand about contracts are that they all have expiration dates. In fact contracts
expire four times a year on the following dates:
3/13 - 6/13 - 9/13 - 12/13 The only thing that changes is the year on
the contract. Other than that the months remain the same year after year.
During each of those four months we have what's called a contract rollover and we go into
the brand new contract. It's really that simple. The most important things to know about contract
rollover are that those days are typically very slow. So, I encourage you to test out
the volume yourself or just skip that day altogether.
I typically just skip it as I'd rather not bother with having to hold trades for sometimes
an hour at a time. I can think of so many other things that I'd rather do with my time
then sit there and watch paint dry (or bars paint!)
Another important point to remember is that on contract rollover days you typically have
to add a new contract onto your trading platform. In the case of NinjaTrader it is actually
quite simple. You can find the instructions on their website or just follow the advice I
give you in the video above. This is one of the main reasons that beginners cannot get
their charts to work. They don't take contract rollover into consideration because it's not
something you typically learn about until you begin learning how to trade.
I hope you enjoyed this short video on day trading.