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New user, what do I need? It's craaazy.

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  #1 (permalink)
 skellington 
San Jose, CA
 
Experience: Beginner
Trading: Futures
 
Posts: 20 since May 2021
Thanks: 14 given, 9 received

Hi all,

I'm trying to switch to Sierra Chart and find their documentation wordy yet confusing when it comes to brokers/data/etc.

I'm looking for the best combo of brokers/data/order/clearing/etc. to trade ES/MES intraday (US citizen living in the US). At a high level what I'm looking for is the holy grail of:

- Just CME Group for now
- Best real-time and historical tick data feed w/ MBO data + non-professional fee discount
- Low all-in trade fees (around $3 round-trip per ES)
- Reliable broker with strong financials and SIPC insured (can futures brokers be SIPC insured?)
- Low intraday margin ($500 for ES seems common)
- Order routing with great fills, no order flow selling shenanigans (server side OCO, bracket, etc.)
- Reasonable cost

Based on the above, and from what I can understand from the docs, the best fit would be:

- [PLATFORM] Sierra Chart service package 12 (SC advanced + MBO + Denali data) [$56.00/mo]
- [ROUTING] SC Futures Order Routing Service w/ Data [$0.10 per contract per side]
- [DATA]Denali (Full CME Group w/ market depth) for non-pros [$31.20/mo]
- [BROKER] Supported Broker (Advantage, Dorman, Stage5, any TT broker), honestly this might be the most confusing part since there are so many possible brokers.
- [FCM] Is FCM handled by any of the above or by the brokers?

So this is $87.20 monthly plus trading fees of roughly $3.20-$3.50 round-trip ($3 broker + $0.10 routing service fee).

I'm confused if the above is all that's needed and the FCM. The docs seems to overlap some of the services so I'm not sure if I got the pricing right. Like service package 12 says it includes Denali data, but the exchange fees are still separate?

Thanks for any help. I'm only used to ToS and IB fully integrated services. And I've read other people say they prefer things like Tradovate + CQG + Sierra Chart and I don't know how to compare so many options.

I'm still trying to figure out how this a-la-carte service stuff works.

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  #2 (permalink)
 bobwest 
Site Moderator
Sarasota FL
 
Experience: Advanced
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Trading: ES, YM
 
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skellington View Post
Hi all,

I'm trying to switch to Sierra Chart and find their documentation wordy yet confusing when it comes to brokers/data/etc.

I'm looking for the best combo of brokers/data/order/clearing/etc. to trade ES/MES intraday (US citizen living in the US). At a high level what I'm looking for is the holy grail of:

- Just CME Group for now
- Best real-time and historical tick data feed w/ MBO data + non-professional fee discount
- Low all-in trade fees (around $3 round-trip per ES)
- Reliable broker with strong financials and SIPC insured (can futures brokers be SIPC insured?)
- Low intraday margin ($500 for ES seems common)
- Order routing with great fills, no order flow selling shenanigans (server side OCO, bracket, etc.)
- Reasonable cost

Based on the above, and from what I can understand from the docs, the best fit would be:

- [PLATFORM] Sierra Chart service package 12 (SC advanced + MBO + Denali data) [$56.00/mo]
- [ROUTING] SC Futures Order Routing Service w/ Data [$0.10 per contract per side]
- [DATA]Denali (Full CME Group w/ market depth) for non-pros [$31.20/mo]
- [BROKER] Supported Broker (Advantage, Dorman, Stage5, any TT broker), honestly this might be the most confusing part since there are so many possible brokers.
- [FCM] Is FCM handled by any of the above or by the brokers?

So this is $87.20 monthly plus trading fees of roughly $3.20-$3.50 round-trip ($3 broker + $0.10 routing service fee).

I'm confused if the above is all that's needed and the FCM. The docs seems to overlap some of the services so I'm not sure if I got the pricing right. Like service package 12 says it includes Denali data, but the exchange fees are still separate?

Thanks for any help. I'm only used to ToS and IB fully integrated services. And I've read other people say they prefer things like Tradovate + CQG + Sierra Chart and I don't know how to compare so many options.

I'm still trying to figure out how this a-la-carte service stuff works.

Hi @skellington,

You are right to be confused. The futures world has its own peculiarities, and traders who started in all-in-one shops like TOS or IB get very perplexed, because the amount of hand-holding masks the underlying complexity of the different roles.

I will try to help a little, but time spent looking at what is out there is what will eventually be of the most help.

To start out, take a look at this link, which will address some of your broker questions, especially about what you refer to above as [BROKER] vs. {FCM]. What you are calling 'broker" is kind of like an "Introducing Broker," although an FCM is really your broker in a way. (I said that the futures world has its own peculiarities.) You do not need both, by the way, but you do need an FCM, and you will have one too. An Introducing Broker may give you some services or options to make it worth your while to use them, but an FCM holds your money. (The abbreviation "IB" is often used for Introducing Broker, not to be confused with "IB" being used for Interactive Brokers. The futures world has its peculiarities. ) Check out the link for more info.



Here are a few other quick hits on your questions:

"I'm trying to switch to Sierra Chart and find their documentation wordy yet confusing when it comes to brokers/data/etc." -- Sierra Chart is a great platform, and everyone finds its documentation difficult. I'm not going to go into the specific Sierra Chart questions you have, but someone else may chime in on their preferences.

"Just CME Group for now" -- To trade ES, you're going to trade on the CME, because it's the exchange that ES exists on. An easy choice, then.

"Reliable broker with strong financials and SIPC insured (can futures brokers be SIPC insured?)" -- No. SIPC is a stock thing. If it makes you feel better, FCM's (who are the ones who hold your money) are required to open a segregated bank account for every customer's funds. Not that this is totally safe, but it's something.

"Low intraday margin ($500 for ES seems common)" -- Day trading margins are set by your FCM and can vary all over the place. $500 per contract for ES is very common, and it is also very dangerous, especially for someone new to the unusual risks of futures (the low margin is one of the unusual risks.) The margin you put up governs the amount of leverage you have, which affects the profit and the loss of a trade. I would not advise starting out with $500. Figure out your own risk tolerance, and be sure to use enough, but way more than 500. Several times more.

"Low all-in trade fees (around $3 round-trip per ES)" -- The 3.00 range is kind of typical, give or take. Don't only make a decision on this basis, though.

"Order routing with great fills, no order flow selling shenanigans (server side OCO, bracket, etc.)" -- Payment for order flow is a stock thing. Server-side OCO is a good thing, and will depend on your trade routing service (CQG, Rithmic, Sierra Chart's version if it's up yet -- see other users for this info on Sierra Chart, etc.) Check the individual service's web site for details if the IB or FCM doesn't tell you.

Exchange fees are always paid to the CME, so you can't get away from them.

I hope this has helped some, but the whole thing is complicated when you first get into it.

Ask for more help on specific questions if you have them.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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  #3 (permalink)
 tomgilb 
Nashville TN USA
 
Experience: Advanced
Platform: SierraChart
Broker: Sierra Futures/SC Denali
Trading: NQ ES YM
 
Posts: 448 since Nov 2009
Thanks: 173 given, 562 received


Here's how I understand it, if you are using the 'Sierra Chart Futures Order Routing Service With Data' service:

[PLATFORM with DATA] Sierra Chart service package 12 (SC advanced + MBO + Denali data) [$56.00/mo]
[ROUTING] SC Futures Order Routing Service w/ Data [$0.10 per contract per side]
[EXCHANGE FEES] Full CME Group w/ market depth for non-pros [$31.20/mo]
[BROKER] One that is an FCM that supports TT, or any of their Introducing Brokers, e.g. Stage5 introduces Dorman, Gain, and Ironbeam, but of these three only Dorman supports TT.

Other pertinent info:
There was a TT outage recently (the second since SC offered this), and consequently Sierra Chart has expedited development of their own Order Routing.
https://www.sierrachart.com/SupportBoard.php?ThreadID=61280
This will initially be offered with one broker, yet to be announced.

Sierra Chart has limited support for CQG data users:
https://www.sierrachart.com/index.php?page=doc/CQGTrading.php
(Read the note in the green field)

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  #4 (permalink)
 MNSTrading 
Grand Rapids, Michigan
 
Experience: None
Trading: Commodities and Russell
 
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Posts: 158 since Nov 2015
Thanks: 59 given, 317 received

Also you need this.


no swimming



please have it at no cost

Coming, they can't be denied. Going, they can't be detained.
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  #5 (permalink)
 shokunin 
Manchester, United Kingdom
 
Experience: Advanced
Platform: Sierra Chart
Broker: Optimus Futures, Rithmic, Denali
Trading: ES
 
Posts: 44 since Jul 2020
Thanks: 4 given, 74 received

To begin with, you could stay with Interactive Brokers and purchase Sierra Chart package 12 + CME Group with MBO for non-professionals. This way you would get all the benefits of Sierra Chart and a decent data feed with MBO, but you can continue to execute via Interactive Brokers. In my experience, Interactive Brokers are fine for trading ES and MES providing your PC is powerful enough to run TWS and SierraChart together. You will still need to run TWS as SierraChart sends orders through it.

You can then take your time looking for the right broker, or wait for SierraChart to complete their direct routing, or Rithmic and SierraChart to complete their DTC integration.

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  #6 (permalink)
 skellington 
San Jose, CA
 
Experience: Beginner
Trading: Futures
 
Posts: 20 since May 2021
Thanks: 14 given, 9 received

Thanks everyone.

- I sort of understand IB vs FCM but I struggle to see why IBs exist at all. In most cases, the IBs seem to provide support and marketing, but the FCMs also provide support so honestly I'm not sure that I would pay extra to go through an IB. It seems like the FCM does all the important work including 1099s and all of the infrastructure for reporting trades. For example, why go through stage5 instead of just going directly to Dorman? Either way, the harder part is just picking a good IB/FCM, not really worrying about the distinctions.

- I don't want to use IBKR because their commissions are high and their margins really high. Even with $500 intraday margin, I will have much more in the account, but I don't want to maintain $15K to trade one contract.

- I'll be checking out:
Advantage Futures
Dorman Trading
ED&F Man Capital Markets
Stage 5 Trading
Phillip Capital
Edge Clear
AGN Futures
Trade Pro Futures (https://www.tradeprofutures.com/)
I assume one of those will be great and I won't have to look at every TT supporting FCM.

I remembered one more requirement: the IB/FCM must have a web or app based trade control for redundancy (to flatten) if there is an outtage for any reason.

Thanks.

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  #7 (permalink)
 shokunin 
Manchester, United Kingdom
 
Experience: Advanced
Platform: Sierra Chart
Broker: Optimus Futures, Rithmic, Denali
Trading: ES
 
Posts: 44 since Jul 2020
Thanks: 4 given, 74 received


skellington View Post

- I don't want to use IBKR because their commissions are high and their margins really high. Even with $500 intraday margin, I will have much more in the account, but I don't want to maintain $15K to trade one contract.

Yes, I forgot about their margins. That is one of the reasons I don't use IBKR for futures.
I'm surprised you consider their commissions high: I've found them to be one of the cheapest brokers around for ES/MES.

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  #8 (permalink)
 shokunin 
Manchester, United Kingdom
 
Experience: Advanced
Platform: Sierra Chart
Broker: Optimus Futures, Rithmic, Denali
Trading: ES
 
Posts: 44 since Jul 2020
Thanks: 4 given, 74 received


skellington View Post
I struggle to see why IBs exist at all.

Some FCMs are large enough that they don't want the hassle of dealing with a large number of retail traders asking for support. I view it like the distributor/retail model. The IB is your local corner store, they charge more but you're supposed to get one-on-one service and advice and other value adds.

I use both IBKR and Optimus for different reasons, I am glad both types exist.

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  #9 (permalink)
 bobwest 
Site Moderator
Sarasota FL
 
Experience: Advanced
Platform: Sierra Chart, NinjaTrader
Trading: ES, YM
 
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skellington View Post
- I sort of understand IB vs FCM but I struggle to see why IBs exist at all.

This struggle comes to many traders, but I think it focuses on the wrong questions. You would not, in general, need an IB, because there's nothing about the IB role that is in itself all that special, and they don't do the essential tasks that FCM's do. But you don't use any firm "in general," you use one in particular because it specifically offers something you want and can't get otherwise.

An example, not directly pertinent to you because you are going to use Sierra Chart for your trading platform, would be NinjaTrader Brokerage. They are an IB, but the only way you can use the NinjaTrader platform, which is preferred by many traders, is through them or the very few other firms they will allow you to use it with. So if this is something you want, you go through this IB to get it. You can see that the "general" question of why do IB's exist is specifically answered in this particular case, because this IB has something that people want, and it's an exclusive to them. Other IB's offer, or claim to offer , other particular unique benefits. Maybe they do, maybe they don't, and maybe you don't want them if they do. But that's why they can exist in a competitive market. As to why they don't just become FCM's, I would think that setting up as an FCM would be much more involved and financially intensive, as well as having more stringent regulatory and exchange requirements, so I assume they find it easier to be specialists in something and forgo all the rest that an FCM does. (You notice I said "I assume" -- I never cared enough to find out, frankly. The general "why do they exist" question is better asked at the level of particular firms, in my view anyway.)

But whatever they have that makes them special (if they do) would be why a trader would want to use one, or not. (I never have used one, for example.) You just need to see what they've got, and if it is worth it to you. It's a case by case decision.


skellington View Post
Either way, the harder part is just picking a good IB/FCM, not really worrying about the distinctions.

Right. Some of the firms you have listed are IB's, some are FCM's. If you pick an IB, you'll need to have an FCM too, which the IB will hook you up with, and sometimes a given IB will have more than one FCM to choose from. So it's the total package you will want to look at. If you have an IB, you have to also have an FCM to do the rest of the work you want a broker to do. (Like hold your money and get your trades done. ) An IB is another layer, not always one you want or need, but perhaps it is sometimes, depending on their offerings.

Good luck. You wouldn't be the first to think it is all too complicated, but it will work out if you keep at it.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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  #10 (permalink)
 bobwest 
Site Moderator
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Platform: Sierra Chart, NinjaTrader
Trading: ES, YM
 
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shokunin View Post
Some FCMs are large enough that they don't want the hassle of dealing with a large number of retail traders asking for support. I view it like the distributor/retail model. The IB is your local corner store, they charge more but you're supposed to get one-on-one service and advice and other value adds.

I use both IBKR and Optimus for different reasons, I am glad both types exist.

Another way to look at it, which I like. If something exists, there is a reason, in a marketplace where they have to offer something to succeed.

So you can look at that way too. You still will want to assess the particular offerings when making your decisions.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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