I know many of you read that title and thought maybe I was going to disclose that magical "get rich quick" secret trading strategy that everybody is looking for. Trust me, there is no such secret. The sooner a trader realizes that, the sooner they can begin their professional trading careers.
This article is going to focus on distinguishing between Commodity Futures symbols that are used for order entry and chart analysis. There is definitely a difference between the two.
Think of these symbols as important as your banking ATM pin number. When you go to your bank and insert your card in the ATM you are asked for your pin number. If you enter the wrong pin number the transaction is cancelled until you enter the correct number. That is because the ATM computer does not know how to route your instructions until you enter the right information. This is exactly how entering an order on an electronic trading platform works too. If a trader does not send in the Exchange recognized market symbol then it does not know where to route your trading order.
The confusion seems to come from the fact that Futures charting software uses one set of symbols for charting and the Exchanges require a different set in some instances.
We will use TradeStation symbols for our examples in this article, but there are many other trading platforms out there where you could encounter the same situations.
Traders coming into the Futures markets for the first time have usually been used to trading Stocks. Whenever they would enter an order to buy or sell the symbol would be the same as the chart they had built to analyze their market. The reason the symbol was universal trading Stocks is that there are no contract expirations to deal with. Stocks trade continuously without interruptions unless they are delisted from the Exchange, merge or are acquired by another company or perhaps they go out of business. This makes Stock charts seamless.
The Futures markets are dealing with contracts that have a first... Continue Reading