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Low Leverage Product to Trade?


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Low Leverage Product to Trade?

  #1 (permalink)
TravelingSalesmen
Tucson arizona
 
Posts: 31 since Jun 2018
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Hey guys,

I looked around a little bit at different products on the CME to see what were the lowest leveraged markets and such. it seems like the micro currencies are the lowest leveraged. but i wanted to ask around to see if we can kinda form a list of the lowest leveraged markets to trade on?

so for instance the M6E is like between 1-2 dollars per tick move. i am interested in other non-currency futures to use as a testing ground for new auto-trading strategies that way i dont have to have a huge acct (even with 1 contract some strategies have deep drawdowns) to test a new strategy in LIVE trading.

anyone know of any other good low leveraged products?


Best.

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  #3 (permalink)
 
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 teamtc247 
Fairburn, Georgia
 
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TravelingSalesmen View Post
Hey guys,

I looked around a little bit at different products on the CME to see what were the lowest leveraged markets and such. it seems like the micro currencies are the lowest leveraged. but i wanted to ask around to see if we can kinda form a list of the lowest leveraged markets to trade on?

so for instance the M6E is like between 1-2 dollars per tick move. i am interested in other non-currency futures to use as a testing ground for new auto-trading strategies that way i dont have to have a huge acct (even with 1 contract some strategies have deep drawdowns) to test a new strategy in LIVE trading.

anyone know of any other good low leveraged products?


Best.

Stick with stocks or forex, trade small. Are you trying to day trade? if so you'll need at least 25k to trade stocks? Trade the SPY or the QQQ. I hope you would at least start SIM to see if your system works before trading live. Have fun.

Process oriented goals #1.
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  #4 (permalink)
TravelingSalesmen
Tucson arizona
 
Posts: 31 since Jun 2018
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teamtc247 View Post
Stick with stocks or forex, trade small. Are you trying to day trade? if so you'll need at least 25k to trade stocks? Trade the SPY or the QQQ. I hope you would at least start SIM to see if your system works before trading live. Have fun.

this really was a worthless answer.... doesnt add to the question, just diverts.

p.s. screw stocks.

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  #5 (permalink)
 
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 teamtc247 
Fairburn, Georgia
 
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TravelingSalesmen View Post
this really was a worthless answer.... doesnt add to the question, just diverts.

p.s. screw stocks.

Wasn't the answer you wanted to hear, low leverage in futures, PSSH. You were looking for a low leverage option. Trade the YM 5 dollars a point. Trading with one contract is not a good strategy, in my opinion, you'll learn a ton of bad habits, doesn't give you room to play with your trade, like scaling out.

Forex and stocks trade just like futures, you won't make a ton of money with a small account, but you can gain experience without risking like you do trading futures.

If you want to trade futures, put your big boy pants on and do it.

Process oriented goals #1.
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  #6 (permalink)
 
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 Massive l 
OR/USA
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teamtc247 View Post
Wasn't the answer you wanted to hear, low leverage in futures, PSSH. You were looking for a low leverage option. Trade the YM 5 dollars a point. Trading with one contract is not a good strategy, in my opinion, you'll learn a ton of bad habits, doesn't give you room to play with your trade, like scaling out.

Forex and stocks trade just like futures, you won't make a ton of money with a small account, but you can gain experience without risking like you do trading futures.

If you want to trade futures, put your big boy pants on and do it.

I respect that opinion teamtc, however I've made a lot of big trades on just 1 contract.
I agree with the risk involved with futures. It's nothing to screw around with...where the pros play and novices get slayed.

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  #7 (permalink)
 
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 teamtc247 
Fairburn, Georgia
 
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Massive l View Post
I respect that opinion teamtc, however I've made a lot of big trades on just 1 contract.
I agree with the risk involved with futures. It's nothing to screw around with...where the pros play and novices get slayed.

Very true, everyone has a different approach to taking targets. You can trade 1, but I guess what I was trying to say is you're locked in. Once you take the target, the trade is over. If you have more contracts than just the 1, you could scale out at different technical levels. If you're swing trading, you can have big trades, day trading you can have big trades, but you never know where it's going to start or stop. So to maximize your return and time, I would say minimum to trade is two, but you can have a good return with 1. It just depends what your risk appetite is like, I guess. You can still have a good return with 1:1 risk to reward, just need good timing.

Process oriented goals #1.
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  #8 (permalink)
 
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 Massive l 
OR/USA
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@teamtc247

My r/r on 1 contract trades is always around 2 and usually closer to 3. I know what you're saying though. less than 50k and new to the game I wouldn't even mess with futures.

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  #9 (permalink)
 
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 Rrrracer 
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Other than the Micro currencies, you're looking at YM/NQ which are $5/tick. I'm not aware of any others that are less or in-between. That said, there's enough movement in 6E (M6E) to test just about any strategy you care to.

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  #10 (permalink)
 bofh 
Chicago, IL
 
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Honestly, you have been given great advice above. If you really want to do futures, I would suggest you look at e-micro products i.e. M6E, unlike most e-micro mini futures M6E has enough liquidity to let you test our your system without wrecking your account. I would strongly suggest staying away from e-minis especially on indices, they can and will move against in a blink of an eye and hand you, your ass on a silver platter.

You could also look at options on indice futures or trade weekly options on indices i.e. SPX, DJIA, et-cetera. These would limit your risk to the amount you bought them for and the only thing that you have going against you is the theta(time decay). Perhaps you could look into SPX weekly/daily expirations as those usually have a very good amount of volume or maybe options on SPY which are very liquid, and usually the spread between bid and ask is ~0.01. Remember if you do trade options you are not restricted by PDT (Pattern Day Trader rule).

If you do want to go ahead and trade futures, be my guest, however, do note that you will most likely blow out that first account you trade, as most of us have. I would take the advice provided by some of the very respectable forum members above, and trade another product until you can put aside enough and learn the mechanics of the market prior to diving into the shark tank that is futures.

--bofh

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Last Updated on July 4, 2018


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