Trading Futures - Your Why?
Hello all,
This topic is extended to those who utilise algos or trade manually.
I am looking to gain an insight from traders who have maybe migrated from CFDs to trading futures, or perhaps those who trade futures alongside CFDs. I would like to know your "why" - is it due to portfolio diversification, spread, transparent pricing, or other attributes that attract you to the world of trading futures? I have been trading CFDs for 5+ years and have experienced very little to no success with the scalping strategies in my portfolio with slippage and spread heavily influencing profitability (across various brokers). I have been toying with the idea of moving my scalping strategies/expert advisor to trading futures on popular markets such as 6E (EURUSD equivalent), however, I am very much at the testing stage. My "why' is to hopefully improve the profitability of my scalping strategies on the exchanges via its transparent pricing and hopefully reduced slippage.
Is there anything you would pass on in good faith to a "beginner" in the world of futures trading that may benefit me?
I welcome any input on this topic and would love to hear your story/experience, and whether or not trading futures as opposed to CFDs are worth it?
Thank you,
Alec
I trade Futures. My main purpose for futures trading is to benefit from short term moves.
Most of the people do not know that Futures is all about guessing the wind direction for next few hours in terms of intraday
Indices are volume less formula derived signals in chart which helps a trader decide buy or sell views. by doing technical analysis in indices chart, a trader may bet a view on futures or options
If you watch futures or options chart, they may not help you in decision making with high accuracy since they are random charts generated based on meaningless volumes of traders who place bets by analysing index chart
If you trade Nifty50 futures, you should watch Index of these charts as they are generated using a formula based on 50 stocks. Any trading activity occuring on those 50 stocks are responsible for moving index and that drives moves in futures
If you trade Crypto futures its also recommended that you watch Index chart. for example some exchange may have complex forumla for futures e.g. 50% they copy from exchange 1 and 50% they copy from exchange 2 and make their own exchange symbol move based on the formula so trader can bet on futures and trade.
Technically any chart which has volume is very insignificant for me to watch because it may have volume errors that makes all technical analysis fail.
To prove this statement, you may notice that sometime a big spike comes on Futures symbol while index of same symbol is Normal moving chart and spike does not exist.
If you run your Algo on that futures chart, win rate will be not very accurate as compared to index chart.
I trade Futures. My main purpose for futures trading is to benefit from short term moves.
Most of the people do not know that Futures is all about guessing the wind direction for next few hours in terms of intraday
Indices are volume less formula derived signals in chart which helps a trader decide buy or sell views. by doing technical analysis in indices chart, a trader may bet a view on futures or options
If you watch futures or options chart, they may not help you in decision making with high accuracy since they are random charts generated based on meaningless volumes of traders who place bets by analysing index chart
If you trade Nifty50 futures, you should watch Index of these charts as they are generated using a formula based on 50 stocks. Any trading activity occuring on those 50 stocks are responsible for moving index and that drives moves in futures
If you trade Crypto futures its also recommended that you watch Index chart. for example some exchange may have complex forumla for futures e.g. 50% they copy from exchange 1 and 50% they copy from exchange 2 and make their own exchange symbol move based on the formula so trader can bet on futures and trade.
Technically any chart which has volume is very insignificant for me to watch because it may have volume errors that makes all technical analysis fail.
To prove this statement, you may notice that sometime a big spike comes on Futures symbol while index of same symbol is Normal moving chart and spike does not exist.
If you run your Algo on that futures chart, win rate will be not very accurate as compared to index chart.
Anything that involves forced expiry's always seemed to risky to me. I can only see that it's much easier to loose a lot of money with Futures unless you really know your stuff.
Anything that involves forced expiry's always seemed to risky to me. I can only see that it's much easier to loose a lot of money with Futures unless you really know your stuff.
Hello all,
This topic is extended to those who utilise algos or trade manually.
I am looking to gain an insight from traders who have maybe migrated from CFDs to trading futures, or perhaps those who trade futures alongside CFDs. I would like to know your "why" - is it due to portfolio diversification, spread, transparent pricing, or other attributes that attract you to the world of trading futures? I have been trading CFDs for 5+ years and have experienced very little to no success with the scalping strategies in my portfolio with slippage and spread heavily influencing profitability (across various brokers). I have been toying with the idea of moving my scalping strategies/expert advisor to trading futures on popular markets such as 6E (EURUSD equivalent), however, I am very much at the testing stage. My "why' is to hopefully improve the profitability of my scalping strategies on the exchanges via its transparent pricing and hopefully reduced slippage.
Is there anything you would pass on in good faith to a "beginner" in the world of futures trading that may benefit me?
I welcome any input on this topic and would love to hear your story/experience, and whether or not trading futures as opposed to CFDs are worth it?
Thank you,
Alec
There are 2 key difference between Forex and CFD trading:
1- Price action in forex is usually mean reverting whereas CFDs tend to drift.
2- Forex is not centralized and open to manipulation whereas CFDs are central and less prove to manipulation.
Both instruments have advantages and disadvantages for trading. The key determinant will be "the fit of your trading method to a particular trading instrument."
Tough, I don't advise trade 2 instruments at the same time...
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Hello all,
This topic is extended to those who utilise algos or trade manually.
I am looking to gain an insight from traders who have maybe migrated from CFDs to trading futures, or perhaps those who trade futures alongside CFDs. I would like to know your "why" - is it due to portfolio diversification, spread, transparent pricing, or other attributes that attract you to the world of trading futures? I have been trading CFDs for 5+ years and have experienced very little to no success with the scalping strategies in my portfolio with slippage and spread heavily influencing profitability (across various brokers). I have been toying with the idea of moving my scalping strategies/expert advisor to trading futures on popular markets such as 6E (EURUSD equivalent), however, I am very much at the testing stage. My "why' is to hopefully improve the profitability of my scalping strategies on the exchanges via its transparent pricing and hopefully reduced slippage.
Is there anything you would pass on in good faith to a "beginner" in the world of futures trading that may benefit me?
I welcome any input on this topic and would love to hear your story/experience, and whether or not trading futures as opposed to CFDs are worth it?
Thank you,
Alec