Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
I have been on / off trading for the past 20 years, mainly stocks. Few years ago i blew an account trying to trade derivatives of stocks and CFDs, then went back to stocks where it has been more profitable. Looking to daily trade I have found a lot of resources and see most of platforms being futures oriented. Many years ago I was reading a lot of information from BMT and just get back again to the same source. That is why i am asking here:
Why do you prefer trading Futures vs other stocks or options ?
Which one would you recommend to start with and why ? I see a lot of resources based on S&P500 e-mini i think..
Optionally, what broker would you recommend for non US resident ?
Regards ,
Stephane
Can you help answer these questions from other members on NexusFi?
Hi Stephane - I will give you my take of why futures and not stocks. For me futures are a more transparent type of securities. Your orders go through a system called Direct Market Access which means you don't have to go through intermediaries. You place orders straight on the exchange. The other thing is, the spread on most futures instrument is really tight. The most popular instrument have only a 1 tick spread, which means it takes only 1 price movement in your direction to exit the trade at break even.
As for recommendation on what to start, sorry I can't help - I believe it's a matter of personal taste, risk tolerance, how patient one is, what commissions they pay... there's different factors. The ES (S&P500 e-mini) is among the most liquid markets but it can be slow. On the other hand it's more suited to people who don't want a market that is too volatile.
There are volatile markets such as CL (Crude Oil) or GC (Gold) where one can make (or lose) money quickly. They tend to be far riskier because of the speed at which price can suddenly change.
I find that Futures are more predictable. When backtested, up days were followed by up days 52% vs 48%- 200,000+ data points. Strong currency exchange in short period of time may lead to a good learning curve.
* PDT rule in stocks. You need 25k to day trade stocks. You need to be with a prop firm/special training, I think.
* Better for technical traders. Most futures traders are technical or price based. Stocks have more "externalities"
* Leverage. You need leverage to trade or make outsize returns in markets.
* Like the idea of trading global macro concepts
* Options are very technical and difficult to grasp.
* Can start with a small amount but the low granularity (large notional values) makes it more difficult to grow an account
* Work well for system trading but the costs tend to be high if you get it wrong
* More professional traders. There are not many verified professional currency traders compared to futures traders. As for stock traders, I think most work at firms.
In terms of CFD, with futures you are getting access to the primary market. So, you're on a more competitive playing field. However, the CFDs are good for non US traders who have smaller accounts and/or want to swing trade. The combination could be useful- swing trading the CFD and day trading the future. As for the benefits of stocks, the main benefit is that there are more to choose from and it is easier to find stocks that are being driven by various factors whereas with global markets, the factors are not as easy to identify. Of course, futures are also super liquid and you can scale a strategy which is another benefit.
Hey there,
Do you mean you day trade/enter short terms trades intraday?
The reason why people prefer futures is that you can see order flow/volume going in and out of the market which gives a better idea of how the market will move rather than looking at a naked chart.
You could still trade options on shares based on that info, my experience of options is that they are quite expensive in terms of commission but I am not an expert.
But shares/indices are the way to go because of this
Many years trader stock but I move for futures more profitable one can try to predict what the walk is trying to do also the stock on their advantage much more product, but the futures are more better Bank of hedge fund a lot of TR Ade on futures also stock is very volatile at news and information so more risk.
1) Easier during tax time. I just have to give my profit/loss for the year on a single line. Compared to something like stocks where you have to list all entries and exits of orders.
2) Less taxes. If you profit, 40% of your profits get taxed at 15% long term gains, and the remaining 60% get taxed as short term gains at your normal tax rate.
3) Liquidity. There are several futures with super thick liquidity so your spread will always be 1 tick during your typical market hours.
4) Transparency. As mentioned above you don't have to worry about some dark/backdoor pool traders building up large positions hidden from everyone else. What you see is what you see.
In trading, shortcuts lead to the longest path possible.
