What is considered an edge? - page 4
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Thank you Ryan, best answer yet in this thread.
If people think a bit outside the box they can get some of that futures information into their forex trading area with the help of external programs.
But it wont help against the forex brokers shenanigans with spreads and slippages though.
Thank you for your kind words.
Alternatively, they can cut to the chase and switch to a broker-dealer that supports MT5 and CME Futures. A good place for a beginning futures trader to start is Micro 1OZ gold futures in the CME's subsidiary COMEX exchange. They were recently created to directly compete with OTC XAUUSD spot instruments. The 1OZ spread is generally 0.25, while the Mini MGC gold futures have a 0.1 spread. The lower trading capital required for 1OZ is basically the same as XAUUSD. Combined exchange/broker-dealer commissions are about 0.76 USD per side. Of course, bimonthly contract expirations apply to 1OZ but aside form positional (long-term) trading, who cares. They also settle in cash, so no one runs the risk of having to travel to the State of Oklahoma in in the U.S. to pick up physical gold at a missed expiration.
Interestingly, commercial traders are unlike to touch 1OZ contracts due to higher proportional transaction costs when compared to MGC and GC (full size). To be clear, those are all separate instruments that trade independently of each other.
1OZ also trades 24/7 minus a few minutes (2 or 3) at each daily close. Personally, I wouldn't trade on the weekend. There's decent volume on Saturdays but the price action throughout the weekend is rather lame.
Alternatively, they can cut to the chase and switch to a broker-dealer that supports MT5 and CME Futures.
Fair enough, but I was thinking about trading something else than just XAUUSD or EURUSD.
The volume is low on some symbols on CME, but still tradable.
Fair enough, but I was thinking about trading something else than just XAUUSD or EURUSD.
The volume is low on some symbols on CME, but still tradable.
In my neck of the woods, a broker-dealer won't even add a CME Futures contract to its product offerings until volume and O/I hit the bigtime. For example, 1OZ Futures took a while for my broker-dealer to accept. In contrast thereto, GBPJPY might never be added.
The full current list of Micro CME Futures is at: https://www.cmegroup.com/markets/microsuite.html#products
As a side note, anyone having a look at the price action, volume, and O/I of CME Futures contracts will almost certainly kick currency pairs to the curb altogether (both spot FX and FX futures).As a side note, anyone having a look at the price action, volume, and O/I of CME Futures contracts will almost certainly kick currency pairs to the curb altogether (both spot FX and FX futures).
Completely agree with you. Its only the overnight margin that sucks, specially if you have larger positions opened.
Futures is best suited for scalping or day trading, but those that have not tried it yet I recommend doing so. (this is not a trading advise though, you can lose money)
Completely agree with you. Its only the overnight margin that sucks, specially if you have larger positions opened.
Yes indeed. A futures swing trader must get accustomed to the daily/nightly margin seesaw.🤢
Futures is best suited for scalping or day trading, but those that have not tried it yet I recommend doing so. (this is not a trading advise though, you can lose money)
It's like... you knnooowwww.🔮 I'm already doing that.👍
It's like... you knnooowwww.🔮 I'm already doing that.👍
having an edge is the ability to partially (or totally) predict future price movement of an asset, without any fees or biases of any kind.
for example, if you "ride the wave" of Indices you don't really have an edge, because price tends to go up by default.
it's like flipping a coin, but with uneven odds. You don't "create" any real edge, you're just exploiting an existing one.
feels like cheating more than anything else
And fees are like a static bias, so you need to take them out :
if your strat is profitable with a spread of 10 but not 20. does it mean you have an edge at 10 points but not at 20 points ? of course not
you have an edge, independently of the static or variable biases from the trading conditions
for example, if you "ride the wave" of Indices you don't really have an edge, because price tends to go up by default.
it's like flipping a coin, but with uneven odds. You don't "create" any real edge, you're just exploiting an existing one.
By using your analogy, you could say that putting your money in SNP or some global index-fund is an edge because they tend to go up. 🤫 hush, hush...
But who want to get rich slowly...