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Trading the new CME E-Micro's (E micro) MES, MNQ, MYM, M2K and other micros


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Trading the new CME E-Micro's (E micro) MES, MNQ, MYM, M2K and other micros

 
 
bobarian's Avatar
 bobarian 
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mattz View Post
If the micro eminis could provide liquidity, it could serve as a good solution. This is what I am curious about most, what liquidity will it have.

I agree with your point that traders sooner than later should have skin in the game to experience what real trading is like and to improve their method in real time. But, it is not the size of the contract that is their obstacle in my opinion:
1) It's going through the motions while their position is fluctuations in the market place. It's a pure mind and psychology challenge.
2) The feeling they are never ready. I have spoken to people who spent years in front of the screen (without trading) thinking that they are missing an element that would make them successful if they paper traded a little more or explored more angles. KISS is not what they do.

So the reason I added FX is that many are capable of trading real funds, but their risk capital is small. I hope that over time as they build their net worth, they could potentially afford to trade with adequate capital.

As you mentioned, the paper traders who build new methods while trading real capital, have a completely different angle on paper trading.

Matt Z
Optimus Futures

There is a substantial risk of loss in futures tradng. Past performance is not indicative of future results.

All good stuff guys.
I trades forex for the past year.I think forex is ok if you are trading decent size swings.Trying to daytrade though didnt work for me because in the usa , the spreads are high.
I followed the cl for a long time, and executed on the qm.The liquidity for the cl isnt huge.The liquidity for qm is really thin...but it was good enough to daytrade.Sure, you could get smacked at times, but that can happen on the cl as well.
My thought is, if the qm and the m6e have liquidity to daytrade, than i would be really surprised if the micros didnt have decent liquidity.
Of course, i may be wrong..I think also, if you are scalping 2 or 3 ticks, thats a whole different story..We shall see!
just my 2 cents

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bobarian View Post
All good stuff guys.
I trades forex for the past year.I think forex is ok if you are trading decent size swings.Trying to daytrade though didnt work for me because in the usa , the spreads are high.
I followed the cl for a long time, and executed on the qm.The liquidity for the cl isnt huge.The liquidity for qm is really thin...but it was good enough to daytrade.Sure, you could get smacked at times, but that can happen on the cl as well.
My thought is, if the qm and the m6e have liquidity to daytrade, than i would be really surprised if the micros didnt have decent liquidity.
Of course, i may be wrong..I think also, if you are scalping 2 or 3 ticks, thats a whole different story..We shall see!
just my 2 cents

I am sure we have a few micro traders on the FX currencies, but honestly, it rarely comes up in conversations, so it would be hard for me to judge whether it has the liquidity for day traders. If you traded the Micro FX with little slippage as a day trader, it would be somewhat surprising. If you are a long term trader or swing, then I see the merits of such contract sizes.

I agree that many FX companies have large FX spreads for retail traders, but this is also why we avoided entering this arena until recently with the introduction of IG Markets in the USA. We recently reached a clearing arrangement with them, and we have studied and published their trading platform. Their spreads are .8 to .9 pips on the majors. I think they will be a massive competition for the current brokers. We will have all the details on our site soon.

For Crude, yes, Futures provide much better liquidity than many CFDs overseas.

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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weathers343
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They should have made the micros 1/5 of an emini as opposed to 1/10. That would make the broker fees more palatable. Did they not consider the disproportionately excessive cost traders will be subjected to? If the intention was to lower the barrier to entry for futures, they shot themselves and potential micro traders in the foot with this short-sighted decision. Brokers are the only winners here... At 50 cents a side I'll be paying 3 times the cost of trading the eminis. For people paying 1.50 or more per side (which is what most retail traders they are supposedly targeting pay), it's game over.

(0.5 + .22) x 2 x 10 = $14.4

(1.5 + .22) x 2 x 10 = $34.4 to buy and sell the equivalent of one emini which normally costs less than $5

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weathers343 View Post
They should have made the micros 1/5 of an emini as opposed to 1/10. That would make the broker fees more palatable. Did they not consider the disproportionately excessive cost traders will be subjected to? If the intention was to lower the barrier to entry for futures, they shot themselves and potential micro traders in the foot with this short-sighted decision. Brokers are the only winners here... At 50 cents a side I'll be paying 3 times the cost of trading the eminis. For people paying 1.50 or more per side (which is what most retail traders they are supposedly targeting pay), it's game over.

Does CME care about brokers? Some individuals that I know there are super helpful.But, they are individuals.

Most of the commissions goes to the CME when it comes to deep discount trading. So I propose to see whether the CME will match their clearing rate as well with the notional size of this contract. So at 1.18 per side on the regular ES, let's see if they match it with 11.8 cents per side or 23.6 cents RT on Micro. Then you can ask whether they genuinely created a product to assist the little guy.

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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apac
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mattz View Post
Their spreads are .8 to .9 pips on the majors.

That's pretty wide for anyone scalping FX.

 
apac
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tpredictor View Post
Leverage is not the problem. It is the lack of granularity.

Very correct. That is why FX spot is so popular. Any bet size you like starting at $1000. At ECN brokers you get 0.0 to 0.2 pip spreads on majors. But it is the commission that kills the deal for high turnover traders. I guess roughly the equivalent as paying $10 RT on e-min sp. Almost a tick. Not good deal for day traders.

Edit: the best spread I have seen on e-mini CFD's is 0.5, so double the min tick size. Zero comms. So... not too bad if you trade for longer swings. Not great for 4 pip scalps. Always the risk of the "broker" playing against your position and ticking up for stops (every win you have is a loss for him). I tried it for a while. It was nice to place any bet size I wanted from $1000 and up.

 
 
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apac View Post
That's pretty wide for anyone scalping FX.

In the USA, it is as low we have it unless you are an ECP with institutional rates.
Also, there are rebates for those who do high vol.
Outside the USA, they add commissions and when you get stopped out your slippage is above average.

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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apac
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Matt - Comms, yes. But usually only at ECN's. Book runner CFD shops just charge spreads. And run your stops.

Slip, not that bad IME, maybe 0.1-0.2 ticks on a bad day at an ECN broker. Like I said above it it is their comms that can kill. Best I have seen for retail FX if you trade $1m turnover a month is about $5 per $100,000 notional and 0.1pip spreads. So still has a worse bro/tick ratio than ES.

Best of luck expanding the retail services landscape in the US It is lacking.


josh View Post
... you are trading at 290:1 leverage. This is dangerous, and not much different than OTC forex dealers who offer similar levels of leverage.

True, but a BIG advantage of very high leverage at fX brokers is that you do not need to keep much cash with the broker. From the traders perspective, you are appropriately capitalized on the risk capital you have available, 90% of which is ring-fenced in your own bank account. From the brokers perspective, you are trading 500:1, or what ever. Keeping too much cash at a broker is a credit risk*. And you often don't earn any interest on it.

* I had money at PFGBest when they collapsed. And CFD brokers collapse often enough (recently Halifax).

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AbdeL
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AMPFUTURES REALLY REALLY ROCKS !!

everything you want to know is already on their website

Micro E-mini S&P 500 MES

Daytrading margin is only 40$

comissions is 0.40 usd per side for all Micro E-mini so thats very very good

And thats a huge opportunity for all the beginners and new traders to trade in a regulated markets with low comission and low risk.

because every trader star with small amounts and focus on learning to trade properly first. can develop solid trading skills habits and eventually real confidence,

and kill that psychological quirks That affect his Trading.

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vptrader
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AbdeL View Post
AMPFUTURES REALLY REALLY ROCKS !!

everything you want to know is already on their website

Micro E-mini S&P 500 MES

Daytrading margin is only 40$

comissions is 0.40 usd per side for all Micro E-mini so thats very very good

And thats a huge opportunity for all the beginners and new traders to trade in a regulated markets with low comission and low risk.

because every trader star with small amounts and focus on learning to trade properly first. can develop solid trading skills habits and eventually real confidence,

and kill that psychological quirks That affect his Trading.

Sounds very reasonable for sure .... I wonder will they extend those commissions to the Micro currency contracts.

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