What are the best futures to trade with a small (~10k) account. I was going to start with british pound futures and ZF (5yr) because they both have very low margin requirements. Does this sound like a good start or should I check out others?
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Check out the micro euro (m6e) or the micro gold (mgc) contracts. I believe they are the most popular of the micros and the tick sizes are small at 1.00 and 1.25. They are probably not suitable for day trading though so you'd be looking at a longer hold. I know @tturner86 has a journal where he trades m6e. Check it out.
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The problem with instruments like the M6E is lack of liquidity and very high commission relative to the full size contracts, so you might be better off trading something like the Nikkei 225 Mini on the Osaka Securities Exchange. It is the most heavily traded Asian futures contract. The liquidity rivals the ES some days. I remember a day not too long ago when the first 5 minutes traded over 550K contracts.
The margin requirements are low if you trade through Interactive Brokers, and the tick value is just 500 yen (around $4). Commission per contract is 40 yen each way. You can continually increase your position size as you get better, and the N225M can handle huge volume so it will be difficult for you to outgrow this thing. It also moves like the ES, since it is a stock index futures, so you can move over to the ES and it won't be a knee jerk transition. The RTH for this instrument is 7PM EST to 1:15AM EST, so if you have a day job you can still trade this intraday.
Last edited by mangolassi; February 10th, 2016 at 05:42 PM.
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OP asked for futures contracts, and CFDs are illegal to trade in the USA. I don't understand why anyone would trade CFDs solely because they have a small account when there are strictly regulated and transparent markets to trade like the N225M which are perfect for small accounts.
There are commissions costs in futures. The spread for liquid instruments like ES and N225M is practically always 1 tick during regular hours.
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