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Best contracts to trade with small account?


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Best contracts to trade with small account?

  #41 (permalink)
 dalemissen 
Muswellbrook, NSW/Australia
 
Experience: Beginner
Platform: NinjaTrader 8
Trading: CFDs on indexes
Posts: 14 since May 2016
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HoopyTrading View Post
Why would I want to pay financing charges to hold a position when right next door there are ways to trade the same instrument derivatives with no interest needed? Not to mention there seems to be much more counterparty and credit risk with CFDs. But if it works for you, stick with what works, surely!

CFDs are available on almost every instrument. It's the higher leverage and availability that sets them apart. I haven't used futures but CFDs are available in nearly every instrument i have ever wanted to trade. The commissions are soaked up in higher spreads usually and as the OP asked, what's the best for taking small accounts, you need less margin to trade CFDs. However, they are available to people in his region.

Im still learning myself about futures and aim to move into cities once i grow my account large enough to trade them.

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  #42 (permalink)
 00cedge 
South Africa
 
Experience: Advanced
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Broker: NT Brokerage
Trading: ES
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Trade Forex...
You can trade micro's so even with swing trading you only need a $1000 account.
some people may disagree but all markets trade in a similar manner. Forex is liquid, trading cost are minimal and the ability to scale positions is great.
But seriously learn to trade first before losing your hard earned cash

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  #43 (permalink)
mangolassi
Boston, MA
 
Posts: 166 since Dec 2014
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00cedge View Post
Trade Forex...
You can trade micro's so even with swing trading you only need a $1000 account.
some people may disagree but all markets trade in a similar manner. Forex is liquid, trading cost are minimal and the ability to scale positions is great.
But seriously learn to trade first before losing your hard earned cash

Come on, guys... the OP asked for futures. Why are CFDs and forex being discussed?

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  #44 (permalink)
Schultz15
Los Angeles California USA
 
Posts: 18 since Nov 2015
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How about SGX?

They offer the Nifty and China A50. Both contracts have notional values under $20K. Volume on A50 is good (430K yesterday). Volume on Nifty is decent for a casual day trade I guess (70K yesterday).

SGX posts delayed data including bid/ask size information on their website.

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  #45 (permalink)
Craigskills
Houston, Texas
 
Posts: 1 since May 2016
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Massive l View Post
I took a friend's 5k account to 9k trading currency futures (GBP, USD, CAD, AUS). That doesn't mean I would recommend it. I'd say save your money and keep studying the markets (psychology, risk, strategy) while finding other ways to grow your bank account. Work hard and budget budget budget. "A penny saved is a penny got" -Ben Franklin

How long did it take you to get to $9K?

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  #46 (permalink)
 
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 Massive l 
OR/USA
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Craigskills View Post
How long did it take you to get to $9K?

A little over 4 weeks. @Craigskills

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  #47 (permalink)
kazz
London
 
Posts: 150 since Apr 2018
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Massive l View Post
A little over 4 weeks. @Craigskills

Wow that's pretty phenomenel!

Were you day trading to achieve that sort of return?

Would you say that you had to risk plenty of capital per trade to achieve those sort of returns?

Have you been able to maintain that sort of return over a 4 week period? If so that is an amazing ROI.

Thanks.

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  #48 (permalink)
kazz
London
 
Posts: 150 since Apr 2018
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Schultz15 View Post
Great to hear success stories like this. Why do you recommend not trading currencies?

But my complaint about currency futures is they are so US dollar-centric. Fine if you only want to trade the dollar. But what if, for example, the Euro is breaking out? (OK not lately...) But maybe get a better trade setup versus GBP, JPY, AUD or some other currency. With a Forex account it's easy to check all these, as well as do other things, like construct an equal weighted basket to guage overall relative strength of each currency. Even better, you can just buy or sell the whole currency basket directly.

Also, I was shocked at the lack of liquidity on the futures currency crosses (the few that are even offered) like EURGBP, even though these are supposed to be full size contracts. I mean I was seeing dashes on the 15m charts!

This is why the regulators efforts to push forex onto the futures exchanges will continue to prove futile. They may be able to force a few retail traders onto the exchanges, but the giant financial institutions will continue to trade OTC among themselves. Real-time currency spot pricing is already published by the banks and made available to the public. So "price discovery" is accomplished. A futures exchange is not needed.

Sorry for going pretty far from the original question. But I guess my point would be decide what market you want to trade after doing lots of research. Then check what trading vehicles are available for market access. Sometimes there is a futures contract. But also consider other venues like FOREX, CFDs, ETFs, NADEX binaries/bull spreads. Lots of alternatives out there...

Great advice, there is a whole world of trading options out there particulary if you are not based on the USA.

I think that our American cousins gravitate towards futures because they offer them the chance to trade small accounts with leverage.

Much the same way that we, in the UK and Europe, gravitate towards CFDs and spot forex. They offer a small account the chance to trade with leverage.

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  #49 (permalink)
kazz
London
 
Posts: 150 since Apr 2018
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Schultz15 View Post
Sure, the Nikkei Mini Osaka is perfect for trader like me. But things not so good back in USA. Really ever since Mid-Am Exchange closed in 2003-ish, there's not been a good venue here for aspiring futures traders. The CME tried with its "micros", but too little too late. By then the rest of the world had moved on to CFDs.

So, CFDs have been invaluable to me bridging the gap between paper trading and full size futures. And the trading terms are sweet. I'm getting 1 point spread on DAX and 2 point spread on DOW, for example. Because of their scalability, CFDs can be held for longer term positions too like an ETF. When Gold crashed a couple of years ago I held the same CFD short position for over a year, the whole time earning (yes earning) overnight swap interest.

Sorry but "regulation" is overrated. Retail FOREX/CFD is very competitive business. There are numerous on-line venues for making complaints about brokers. It just requires a little due diligence to avoid the occasional "scam". Most brokers really do want to keep their client's business.

Agreed, there is some lack of transparency in the industry. But some forex brokers are also publicly traded companies. So just watch the price of their stock for signs of solvency issues.

And there are data fees to consider. I just got an email from AMP futures that they are offering the Nikkei Mini. Great, but they want $29/month for the osaka exchange data. I've traded sugar a couple of times recently, but ICE recently increased their non professional fees to $120/month. Meanwhile I pay nothing for my Forex/CFD data. And it's good data. I compared my Sierra Chart "wick renkos" futures data to the non-repainting wick renkos CFD data in my MT4 account, and can hardly tell the difference. Next time I trade ICE sugar I will be using real time CFD data instead (Interactive Brokers doesn't require purchasing real time data)

The real downside to US residents trading CFDs is the funding and tax complications (FBAR, etc) of offshore accounts. But offshore accounts ARE LEGAL. If not, Mitt Romney would have been arrested a long time ago. Well, maybe not.

Anyway, of course, I'd prefer to trade futures to get special 40/60 capital gains tax break, and joy of not calculating wash sales!

Thanks @Shultz15

If you don't mind me asking who do you trade CFDs with?

Also, do you prefer CFDs to spread betting (which is tax free in the UK, not sure where you are based).

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  #50 (permalink)
kazz
London
 
Posts: 150 since Apr 2018
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Great points especially on how dollar centric the currency futures are and also the shocking lack of liquidity when compared to spot forex!

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