Online Trading Academy has its roots in the largest trading floor in the Western US, founded in by Eyal Shahar. Independent traders needed training to be successful in their investments, and soon a teaching model was born.

Enriching lives worldwide through exceptional financial education. As a Futures trader it is important to know what the front month contract is. We can determine this by finding the contract month with the most volume.

As speculators we need to trade in months with the highest volume to provide us better liquidity for both entering and exiting our trades. Also, the month with the most volume will create charts with better levels simply because of more trading activity.

This symbol tells the Trade Station software to create an un-adjusted continuous chart for the Soybean market that rolls over automatically 10 trading days before the contract expires.

TradeStation chart overlay and trading issues??? - TradeStation | futures io social trading

For many markets this symbol works fine because every month that the Exchange offers for that Commodity is a high volume month. However there are some Commodity Futures that have contract months listed by the Exchange, but they do not have enough volume to become a front month.

I will address which of these markets are impacted further into the article. One of these markets is the Soybean market. Soybean contracts are available for the following months each year to trade — January, March, May, July, August, September and November. As I am writing this the July contract is ready to expire so there are no speculators trading this contract until it expires.

The next months in the contract cycles are August and September. And once August expires then it would be putting the September prices on their continuous charts, just like a continuous chart is supposed to do. The problem is the volume for these contracts are very low and the largest volume is now in the November Soybean contract making it the front month we should be trading in. The Soybean markets as well as other Grain markets have something called Old Crop and New Crop years.

Old crop refers to Grain that was harvested in the prior harvest season and kept in Grain elevators to be sold during winter months and for a portion of the next growing season. During the early winter months and late Spring the Grain elevators storing these Grains use the January, March, May and July contracts for hedging this old crop they have in their inventory.

By the time August and September comes most of the old crop has been hedged and the market is awaiting the new crop for November delivery. Therefore there is very little need or use for the August or September Futures contracts, usually. This year the market was shocked by a U. This also will support the estimate that the new crop will be near 45 bushels per acre.

When this report came out Grain elevators were more than happy to use the remaining old crop contracts to hedge with. But from the speculator standpoint the largest volume remains in November Soybeans and that is where speculators should be trading. In the end it is always about the Commercials when it comes to trading Futures.

Once you have a better understanding of how they use Futures contracts for hedging you can see which contract months are their preferred choices. How do we trade November Soybeans on a continuous chart when the software is plotting the August prices?

We must use a different type of Futures symbol to get the software to only plot the highest volume contract months on our charts. Once we add these symbols you never have to change them because they are consistent year after year. Table 1 will provide a list of markets that need to have these symbol adjustments:.

I have written various articles in the past about the differences between contract specific, un-adjusted continuous, adjusted continuous and contract specific continuous charting.

In this article I would like to address how to setup your un-adjusted continuous charts that only plot the most active trading months during the calendar year. The Exchanges offer an October contract for delivery. There is very little volume and open interest in this particular month, but the software will plot these anyway.

Look at the poor liquidity causing gaps and low quality candles. I used the Gold illustration because once the upcoming August Gold contract expires we need to skip the October Gold contract. To eliminate this problem a trader needs to adjust the symbol to chart only months that have the most volume and open interest.

This tells Trade Station that when August Gold nears expiration then skip the October Gold contract month and go directly to the December Gold contract. Figure 2 shows a chart of Gold during the same time period as Figure 1, but notice the difference in the quality of the candles and lack of gaps.

If you trade these markets and use Trade Station I would recommend you update your radar screen with these symbols.

S&P E-mini or S&P Futures Contract Explained | Resources

If you are using another chart package you may want to confirm what month is being plotted on your continuous charts. Compare the price of the highest volume contract to the price you see on your continuous chart and if they match you are fine. If there is a discrepancy then you may have to contact your chart provider to help you setup your charts correctly.

The answer is either will work fine as long as you use the same one consistently. Then the trader is faced with paralysis of analysis because they see both levels. This means all year long I use the same style chart for these markets and make no exceptions because it is contract rollover time. Celebrating 20 Years Transforming Lives for Two Decades Online Trading Academy has its roots in the largest trading floor in the Western US, founded in by Eyal Shahar.

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