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Futures is not for swing trading
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Futures is not for swing trading

  #11 (permalink)
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MiniP View Post
the NQ just made a 50 pt move at the time slot that would work for you. 1 contract would = $1000 for that size move.
This isn't always the case but there is money to be made.


-P

Thanks, that is really interesting to see. I will spend some time over the weekend looking at chance to see what moves like this occurred in the past.

When you say that a 50 point move = $1000 how is this calculated? Is it $10 per tick at 4 ticks per point?

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  #12 (permalink)
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kazz View Post
Thanks, that is really interesting to see. I will spend some time over the weekend looking at chance to see what moves like this occurred in the past.

When you say that a 50 point move = $1000 how is this calculated? Is it $10 per tick at 4 ticks per point?

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50 pt = 4 ticks per pt = 200 ticks @ a tick value of $5


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-P

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  #13 (permalink)
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kazz View Post
Thanks massive. I really appreciate you taking time out to answer my questions. It's people like you that make this forum such a great place.

I understand your point on expectancy. However, would you agree that it is easier to make more money on a small futures trading account than it is on a larger one?

For example, if one has a $10,000 account, then would they not have an easier time making say a $100 a day day trading than $100 a day swing trading?

Simply because they get many more opportunities or setups day trading than they would swing trading?

This is not a question that can be answered with an absolute. There are several ways to trade and to make X a day, provided there is enough screen time and experience.

But typically absolute beginners have unreasonable expectations.

See also https://futures.io/trading-journals/45249-wishing-trade-nq-nasdaq-100-futures-contract-live-2k-any-advice-12.html#post695035

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  #14 (permalink)
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kazz View Post
Thanks @Massive I. This is the instrument that I have been looking at to swing trade. From what I understand, there are only a very few micro currency futures worth trading as liquidity is poor in most of them. M6E is one that can be traded.

If I was to trade this particular future, how often would setups occur on a swing trading basis? I suspect that there would not be many. Is this not the reason why most people prefer to day trade?

Apologies for all the questions, I am just trying to understand what is the best way forward for me in this futures market.

In other words, they get many more setups occurring on se an hourly charge then they would on say a daily or weekly chart?

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over hte past 8 months my swing system shows 60 trades in 6e/m6e on a 20 minute chart. That's a trade every 3 days.


Last edited by Massive l; November 30th, 2018 at 06:19 PM.
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  #15 (permalink)
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kazz View Post
Thanks for the reply. Maybe I phrased it incorrectly. What I meant was that if you want to get decent percentage returns trading futures then you need to day trade.

Especially so if you have a small account. For example a $10,000 account which you are using to trade e-mini forex futures.

Bottom line is you don't take percentages to the bank...you can't live off percentages.

If you have a small account you can't take big Risk. In most Futures the tick size is too big and the ticks add up too quick holding a position day after day so you canít hold it until it works, if it doesÖlol. So yes Day Trading is the way to go unless you are trading micros.

It is harder to trade a small account because you can't sustain the drawdowns like a large account can. One of my account was recently down about $12k. Now it's made back about $7.6k. I realize this not a perfect example because a small account wouldn't (or at least shouldn't in my world) take on Risk equaling 30-40% of the account. I'm just saying with a large account you can get away with a ton more in terms of Risking X amount to see if it works out.

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  #16 (permalink)
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@kazz, a few things.

1) If you have access to the US markets, they trade nearly 24/5. For the retail trader with small accounts, even during the quietest hours at night you still have enough liquidity so that the bid/ask spreads are minimal for a lot of products. I actually live in the US and during some of my busiest weeks at my day job I will simply manage my swing positions at night.

2) regarding "decent percentage returns". Consider /CL, for example. With 10k in your account, it's possible to trade 1 contract (notice I said it's possible; it doesn't imply you should). It's not unreasonable to see $1/barrel a day, and recently we've seen lots of days with like $3/barrel movement. With a contract size of 1k barrels, that would mean 10%-30% daily changes in your account, with just 1 contract! How exactly do you define "decent returns"?

3) if you have 10k on your trading account, you might want to look into trading smaller products, especially as it seems you are starting out.

4) look into trading futures spreads, as they require considerably less margin, because they have considerably less risk. Notice one extremely important thing, though: if 1 spread takes, say, 300usd in margin, it doesn't mean you should swing trade 30 of those. Instead put on just a small number of spreads on one product, then another small number in another product, etc. This way you can achieve a decent amount of diversification across multiple markets, which may allow you to reduce your risks.

5) finally, you can look into options on futures, as they allow you to control very precisely your exposure and reduce risks, including limiting the maximum you can lose in any trade.

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  #17 (permalink)
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kazz View Post
Hi, I've been learning about futures but, the more l look into it, the more I feel that it's geared towards day traders and not swing or position traders.

If my perception is wrong I'd love for some of the more experienced forum members to enlighten me and other newbies.

My inclination is towards futures as l like the leverage and the fact that the exchange is regulated. However, I live in London and, due to working a 9-5 job, cannot day trade. Therefore my preference is to swing or position trade and I'm not sure if futures offers this option.

Futures can certainly be swing traded. If you have a small account and are learning (which means not concerned with making money) then start with a currency micro (M6A/B/C/E, etc..) and go for it.

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  #18 (permalink)
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Rrrracer View Post
Futures can certainly be swing traded. If you have a small account and are learning (which means not concerned with making money) then start with a currency micro (M6A/B/C/E, etc..) and go for it.

Thanks, I am definitely learning and not too concerned about making money right now.

My worry is will there be enough liquidity inn micro currency futures to make it a useful learning experience?

Or am I better off trading equities or spot forex if l want to learn as there will be much more activity, instruments and liquidity to play with?

Thanks.

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  #19 (permalink)
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[QUOTE=bfreis;699288]@kazz, a few things.

1) If you have access to the US markets, they trade nearly 24/5. For the retail trader with small accounts, even during the quietest hours at night you still have enough liquidity so that the bid/ask spreads are minimal for a lot of products. I actually live in the US and during some of my busiest weeks at my day job I will simply manage my swing positions at night.

2) regarding "decent percentage returns". Consider /CL, for example. With 10k in your account, it's possible to trade 1 contract (notice I said it's possible; it doesn't imply you should). It's not unreasonable to see $1/barrel a day, and recently we've seen lots of days with like $3/barrel movement. With a contract size of 1k barrels, that would mean 10%-30% daily changes in your account, with just 1 contract! How exactly do you define "decent returns"?

3) if you have 10k on your trading account, you might want to look into trading smaller products, especially as it seems you are starting out.

4) look into trading futures spreads, as they require considerably less margin, because they have considerably less risk. Notice one extremely important thing, though: if 1 spread takes, say, 300usd in margin, it doesn't mean you should swing trade 30 of those. Instead put on just a small number of spreads on one product, then another small number in another product, etc. This way you can achieve a decent amount of diversification across multiple markets, which may allow you to reduce your risks.

5) finally, you can look into options on futures, as they allow you to control very precisely your exposure and reduce risks, including limiting the maximum you can lose in any trade.

Sent using the futures.io mobile app[/QUOTE @bfreis - wow! Where do l start, this is an amazing post with great advice.

Addressing the points you made:

1. I am looking to trade the micro currency futures first to learn the ropes. Would I get liquidity in those particular instruments even after 3pm NY time?

2. I get your point on decent returns. If l was to put a number on it, I'd say returns of 50% per annum which I've heard said are only achievable day trading a "small" account. Say under $100,000. However, to get these returns one needs to day trade, making many, many trades per day. Is that the case?

3. I don't want to risk more than $500 per trade so this limits me to very few contracts. Mainly micro currency futures. If you have any others that require a margin of under $500 I'd be glad to know, thanks.

4. I had never heard of futures spread trading before so thanks. I have read up on it and must admit that it looks quite complicated as you are looking at two markets instead of one. For a beginner this could be a problem as learning one market is hard enough. Or am I missing something?

5. Thanks, again, never heard of options on futures. I'll read up on this, hopefully it's easier than futures spreads! : )

Once again, thanks for your great post. Hope you can find time to address my follow up questions.

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  #20 (permalink)
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@kazz, liquidity is not an issue with the bigger micros (EUR, GBP, AUD, Yen). You might get a point or two slippage here and there, but it's not a big deal, and if you're swing trading it is no issue at all. Most of them trade at $1.25/tick so your risk is low, perfect for learning. If you're talking about risking $500/trade, you've got a lot of overhead to play with lol.

However... none of these markets are really moving after 3PM EST. EUR and GBP don't really get moving until about 2AM when the Frankfurt session opens; then you've got solid volume from 3AM (Euro open) to say around 5-6 AM where it slows a bit, but picks up again around 7AM and usually goes pretty strong through early afternoon.

Hope this helps. I was exactly where you're at about two years ago, all good questions you have here... glad to help in any way.

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