Video Heartbreaking moment dog chases owner's car after being 'abandoned'

Before I can tell you the advantages and disadvantages of trading futures, it's important to understand how it differs from trading stocks.

When you buy a stock, you own part of the company. That is, you share ownership with other investors. That's why we say you buy shares.

Trading futures, on the other hand, requires a contract to buy or sell the commodity in the future. That's why they are called futures.

You can buy or sell those futures contracts as easily as trading stocks. For that matter, you don't even have to lay out the money. However, you do tie up resources in the form of margin.

The problem is that the margin held is nowhere near the actual value of the commodity if you were to purchase it. This is known as the Notional Value. It's calculated as the market value multiplied by the leverage.

Okay, I just threw you two more terms that need definition:

The market value is the price that traders are willing to pay. In general, this is determined by supply and demand. The leverage is the number of units of the future index.

For example, the E-Mini SP& 500 Futures has a leverage of 50. As of this writing it's trading near a market value of 2100. Multiply that by the leverage (50) and you get $105,000. That's the Notional Value of the E-Mini S&P.

As you can see, if you buy one E-Mini S&P contract, you are controlling $105,000 in value. However, unlike stocks, you don't own it. You just have a contract to buy or sell it, depending if you went long or short.

Low Margin Required

What did you actually pay? That's known as the margin that the broker requires you to hold while that trade is active. It varies, but it's around $5,000.

If you bought a stock valued at $105,000 you'd have to pay $105,000. If you used margin, it would still require a payment of half of that. The advantage with futures is that you only tie up a small fraction.

However, the disadvantage is that you need to know what you're doing. If you let a Futures trade get away from you, you are liable for a huge investment. Remember, it's a contract.

That's why traders buy and sell Futures contracts without actually ever buying the commodity.

What's the disadvantage?

When trading futures you have to apply your due diligence in knowing the notional value of the future contract.

If you don't pay attention to the Notional Value, and a trade keeps going against you and you don't close the trade at a small loss, it can get out of hand.

You could end up losing a lot of money in a short time. If you reach the limits of your margin, your broker will close the trade if you don't. That means you've been taken out of the market and you may not have the resources to get back in. Game over!

For this reason, you need to stay small. Don't add to bad trades hoping to lower your cost bases. Rather, just admit that you were wrong and you'll be around to play another day when an opportunity arises.


There are many, and these are the reasons why I love futures over stocks. The rest of this article will briefly list the advantages with trading futures.

Trading Long and Short

Going short with Futures is just as easy as going long. It's just a matter of deciding in which direction you think the market is headed.

No Day Trading Limits

There is no day trading limit with Futures. Stocks can only be traded three times in a day before the IRS considers you a day trader. Futures can be bought and sold any number of times in a day, allowing one to take quick profits and benefit from intraday swings.

No Wash Sales Penalties

The IRS does not penalize you for taking a loss and reentering the same trade within 30 days. When this is done with stocks it is considered a wash sale and you lose the benefit of deducting the loss unless you can carry it forward to a future gain on the same stock.

The reason why it's not penalized for Futures is because Futures pricing are recorded as Marked to Market. I won't get into that here. You can always do a Google search for the term if interested.

Trading 24 hours

Futures trade nearly around the clock, except on weekends and short periods in between for exchange record keeping.

European Style Trading

Stock Options follow the American Style that can be exercised anytime. When trading stock options, one needs to be careful to avoid being exercised if the option is in the money.

Most Futures Options trade European Style, which can't be exercised before expiration. There are some exceptions, especially with weeklies. That's beyond the scope of this article though.

Tax Advantage

Futures and Options on Futures are treated according to IRS Section 1256. That provides a tax advantage since 60% of all gains are considered Long Term. This is true even if held for just a few seconds.

This is the heartbreaking moment a dog chases his owner's car after being abandoned at a lake in California.

Disturbing video shows an unidentified man shoving and kicking the black dog on a road by Lake Ming in Bakersfield as the confused pet tries to play with him.

When the dog refuses to leave his side, the man walks back to his car and gets behind the wheel.

The animal puts its paws on the driver's side door, trying to get in, but its owner put his foot down and the black sedan drove off.

The footage shows the poor abandoned pet running after his owner, and almost getting hit by an oncoming car, before the vehicle speeds away.

The footage was recorded by Stephen Sage Silver, who was sitting in another car watching the incident go down.

In the video he can be heard saying: 'Hell no, that's your dog man. That's f**ked up. This guy is dumping his dog right here.'

Silver posted the video to Facebook on Wednesday, writing in the caption: 'These people were hitting this dog in the face when I first approached them.

'They then abandoned the dog after the male tried to get into a physical altercation with me.

'As he drove off he was yelling: "It's your dog not mine."'

Silver said Kern County Animal Services has opened an investigation into the incident and is asking the public for information about the owners, who could face misdemeanor charges for dumping the animal.

KCAS said one of its officers found the allegedly abandoned dog, which is now being cared for at a local shelter.

[This post contains video, click to play]
There are any number of ways to deplete your futures account, but the surest and fastest way is to consistently trade against the trend. I am the first to admit that many countertrend trades can look extremely appealing, at first glance. Counter trend trades call to us like the Siren of Molpe in Greek literature. They beckon us to take that countertrend trade because it looks enticing and a surefire winner.

It takes a good deal of willpower to avoid taking that enticing countertrend trade. After all, it looks like a guaranteed winner.

Several years ago I went through a rough stint for about a month and had no clue as to what I was doing wrong. I keep a detailed record of every entry and exit and to my personal astonishment, I discovered that during this drawdown I was trading with the trend 70% of the time and against the trend 30% of the time. This is not a formula for successful trading; if you are taking 30% of your trades against the trend you will sabotage your futures account.

Once I was able to identify the overabundance of countertrend trades, I was quickly able to rectify the situation by focusing a great deal of technique on taking only with-trend trades. My drawdown quickly abated and my trading returned to my normal win/loss ratio. To date, I now have that number up to 90% with the trend and 10% against the trend. That ratio is a great formula for success.

If trading against the trend is so bad, why do traders consistently take trades against the trend?

I suppose most individuals look at a trade from the simple perspective of, "does this look like a winnable trade?" After all, you can have identical set-ups with the trend and against the trend. Guess what? Statistically, the with trend entries have a winning percentage that is 30% higher than it's counterpart. That's a pretty impressive number.

I also believe that during the heat of trading many individuals are simply looking for a good set-up and tend to think a countertrend trade may make sense as they perceive it a potential turn and the beginning of a new move in a direction opposite the trend. This is seldom true and once you get on the wrong side of an against the trend trade it can run against you long enough to wipe out you're a good portion of your futures account.

In summary, learn to draw trend lines and have a good idea which way the market is heading and trade in that direction. It is very difficult to identify the turning point when the market is moving in one direction. Stick with trading with market directionality and you will improve your winning percentage and increase your futures trading account.

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