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The Downside of Trading Futures
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The Downside of Trading Futures

  #11 (permalink)
Romania
 
 
Posts: 25 since Apr 2016
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Are there brokers for the retail trader that allow for overnight hold on futures? If so, what are the downsides of this aspect if any?

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  #12 (permalink)
Tampa florida usa
 
Trading Experience: Advanced
Platform: NT
Favorite Futures: CL
 
Posts: 62 since Jan 2017
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There are some brokers that allow it. AMP does And I think that IB does. The problem is liquidity. If you are holding the TF contract and it hits yiur stop at 4 am in the morning you may be very disappointed in the slippage. Also margins will be significantly higher if you hold over night.

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  #13 (permalink)
Market Wizard
Boca Raton
 
Trading Experience: Advanced
Platform: Variety
Broker/Data: Optimus Futures, LLC
Favorite Futures: Futures
 
mattz's Avatar
 
Posts: 2,384 since Sep 2010
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cotradetech View Post
Are there brokers for the retail trader that allow for overnight hold on futures? If so, what are the downsides of this aspect if any?

I think that overnight holding could be a bit more challenging if you are not capitalized sufficiently. Those who trade overnight are traders with a method that should allow for larger swings and drawdowns.

Matt Z
Optimus Futures

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

PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
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  #14 (permalink)
okayama japan
 
Trading Experience: Beginner
Platform: oec,sierra chart
Broker/Data: Stage 5
Favorite Futures: 6E,ZF,ZN
 
Posts: 33 since Sep 2015
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The Downside of Trading Futures

It depends on which product you want to trade.
I assume since you trade fx you would be looking into trading the currencies then there is no real drawdown centralized market,no sudden spike,you can see the dom and the "real"trade and volume.
if the tick value is too high then you can trade the mini or even the micro product like the M6E tick value is really low.
The commission is around 2 tick so if you scalp then may be the 6E would be a better choice
About risk it the same everywhere you need to manage it you could for example buy on the 6E and scale in on the mini or micro product with a lower tick value.



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  #15 (permalink)
Munich Germany
 
 
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moriarty View Post
It depends on which product you want to trade.
I assume since you trade fx you would be looking into trading the currencies ...

No, I'd be looking primarily into trading the ES for a start.
Aside from the higher tick value / contract size & margin requirements, anything else I should take into consideration?

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  #16 (permalink)
okayama japan
 
Trading Experience: Beginner
Platform: oec,sierra chart
Broker/Data: Stage 5
Favorite Futures: 6E,ZF,ZN
 
Posts: 33 since Sep 2015
Thanks: 10 given, 23 received

that's pretty much it.
after you should contact your broker if you have more question about there requirement about margin,overnight margin,commision and else.
There are there for that to help you if they don't or take too much time may be change your broker.
i don't know your situation or experience just know that the ES is a tick market so it's really different than a thin market and the advantages and disadvantages of it if you already don't know it.
good luck with your trading

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  #17 (permalink)
Romania
 
 
Posts: 25 since Apr 2016
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@Traderjohnsblog @mattz @moriarty Thank you very much for your input. Just to give a bit of background, over the years I have tuned my strategy in such way, it makes me feel like I'm doing the most natural thing when generating idea, executing and managing the trade. Most importantly is to not be restricted by the time of day and that there is brokers out there supporting my very short-term overnight hold to target. So far it is a high percentage strategy and I would not change anything about it. I just have to find out if there is any downsides from the perspective of the broker. So far I've learned from you guys that the margin might be higher for overnight hold and it will be my responsibility to find out with the broker.

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  #18 (permalink)
Market Wizard
Boca Raton
 
Trading Experience: Advanced
Platform: Variety
Broker/Data: Optimus Futures, LLC
Favorite Futures: Futures
 
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cotradetech View Post
....So far I've learned from you guys that the margin might be higher for overnight hold and it will be my responsibility to find out with the broker.

Just as an FYI: The overnight margins are set by the exchanges. For example, you can take a look at ES as an example http://www.cmegroup.com/trading/equity-index/us-index/e-mini-sandp500_performanc...xchange=CME&pageNumber=1

This is the maintenance margin. The initial margin should be 10% higher. This is the MINIMUM you would need to hold overnight. Your broker may set overnight at this rate or higher depending on the risk you carry.

Thank you,
Matt Z
Optimus Futures

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

PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
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  #19 (permalink)
Long Beach , LA
 
 
Posts: 124 since Apr 2012
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mastercraft29 View Post
Hey Tom - like the guys above said, biggest disadvantage to futures is leverage and is costly if you are a new trader and not consistently profitable. i recommend sticking with forex until you are, and if you still want to switch to futures switch to the 6E which is the futures contract for EURUSD and mimics closely. the tick size is lower than all other futures markets, and margin is the same.

HOWEVER do not listen to travllr (sorry travllr). i dont know if he is associated with the vendor he mentioned but paying $7,000 to ANYONE or any indicator in this business is obsurd and will not guarantee you anything. trust me i have been there, done that. and all i got was raped. if you are interested in learning price action, i am working on a book and course that is cheap and provides very good and real information. not trying to promote myself but this is an example of why i am doing it. This business is filled with crooks and scam artists who prey on new market entrants, which disgusts me.

Hope this helps
Josh


if you find my post helpful please give thanks for journal challenge. the link is below and i am on the first page.
Thanks!
https://futures.io/feedback-announcements/41427-fio-journal-challenge-february-2017-over-1-100-prizes.html

Travllr has just done another GZT positive plug on the https://futures.io/trading-reviews-vendors/36275-goldenzonetrading-sean-kozak-9.html#post643675

He is obviously promoting GZT. The best short in town is GZT. Could even make a movie called The Big GZT Short.

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  #20 (permalink)
central florida
 
 
Posts: 192 since Jul 2014



GlobalTrader View Post
Travllr has just done another GZT positive plug on the https://futures.io/trading-reviews-vendors/36275-goldenzonetrading-sean-kozak-9.html#post643675

He is obviously promoting GZT. The best short in town is GZT. Could even make a movie called The Big GZT Short.


Lol I like the movie idea. Best quote from the Big Short "this is Wall Street, we will take your money!" Which is absolutely true when it comes to "guru's" who will teach you how to trade

Any one promoting a system or pundit asking for thousands to learn to trade is a scam. They are only after eagerness to learn to trade and will not get you anywhere.

Josh

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