Understanding “Trading Tips for the Day”

I have received numerous enquries on how to interpret my daily “Trading Tips for the Day“.  I admit I have been writing that section of my blog assuming that all my readers understand the jargon of the futures market, thus accidentally ignoring the newbie traders.  So here is a detailed explanation on how to use “Trading Tips for the Day” to make some money.
In the futures market, one can trade in both directions to make money.  That means no matter if the market is going up or coming down, as long as you have traded the correct direction, then you can still make money.  Normally one can only buy something first, then sell it a higher price later to make some profit. This concept applies to normal businesses of buying and selling merchandise, and also stocks in our stock market.  But in the futures market, you can also do the opposite first, i.e. sell first then buy back at a lower price to also make money.  This is the uniqueness of the futures market.
When you anticipate the market to go up, you should be ‘going long’.  Vice versa, when you anticipate the market to go down, you should be ‘going short’.  Going long means buying, going short means selling.  To make money, you either have to buy lower and sell higher, or sell higher and buy lower.
Buying futures contracts is not like buying stocks.  Futures contracts are traded in terms of number of lots, i.e. 1 lot, 2 lots, 5 lots, etc.  One needs to only deposit a certain amount of money (margin) into one’s account to start trading in futures, buying or selling the number of lots of futures contracts that they prefer or that is allowed by the amount of margin deposited.
When you want to go long, let’s say at 910 KLCI Futures Index points, and you have money to trade 1 lot, then you tell your broker “I want to long 1 lot at 910″.  If your anticipation of the market is correct and the price goes up to let’s say 918, on paper you are already making 8 points.  If you feel that 8 points (RM50 per point per contract) are enough then you tell your broker “I want to short 1 lot at 918″ to close your long position.
So, the above is the basic concept of futures and how to transact it to make money.
My Trading Tips for the Day is essentially for Day Traders, i.e traders who closes their position by the end of the day.  It is designed to be simple to follow, easy to understand.
Basically it has either a Long or a Short call to start off the day.  Usually the call is a few points above or below the opening price of that particular day.  For example, “To Long at 1-3 points below the opening price”, and the opening price for the day happens to be 1800, means you can que to Long between 1799 and 1797 depending on your choice.  And if after you have placed your que and your order is done, you then place your take profit and also your stop loss.
I hope the above explanation is sufficient to make you understand my Trading Tips for the Day section.  Please do not hesitate to contact me for more explanation if the above does not suffice.