A Shortcut With “Cheap” Futures

A Shortcut With “Cheap” Futures

July 26, 2024

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This week we’re looking at shortcuts.

And we’ve seen two examples so far of getting somewhere faster.

Today, we’ll try to do it with Futures.

But not with any old Futures contract, with “cheap” Futures.

What are Cheap Futures?

They’re contracts that don’t require much margin.

For example, if we want to trade the E-Mini S&P and want to hold trades overnight, we would currently have to have around $14k in our account to get started:

If we don’t, we can’t trade it.

But there are other contracts that don’t require much money. Rough Rice (RR) is one of those:

In this case, we’d only need more than $1,400 to consider trading it.

And, wouldn’t you know it, I just did a video on a System for Rough Rice.

So, here’s the shortcut.

And it’s not a recommendation.

It’s just something to think about.

Here are the Annual Returns since 2018 for RR using the system from the video:

If we used a very conservative $50,000 account, we would’ve hypothetically made slow, steady progress since 2018.

But if we instead wanted a crazy shortcut, we could’ve hypothetically used a $2,000 account. That would theoretically be enough to not get a margin call, right?

And doing this would turn our hypothetical $2k account into a $47k account (with no compounding).

That’s about a 2,000% return.

Which, I believe, qualifies as a shortcut.

Now, I haven’t traded this live. There could have been scary times doing something like this. There may have been times at the beginning where I would’ve had to add more money to the account.

And there are losing years on RR in the past two decades (albeit fairly small ones).

But that doesn’t mean the shortcut doesn’t exist.

It’s just a matter if someone wants to take it or not.

Talk to you soon.

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.