Why Trade Futures?

Discussion in 'Trading' started by Equanimity, Jan 8, 2013.

  1. themickey


    +1 and no nasty surprises that the company and every other insider knew about but the man on the street learns only when the price gets smacked hard down in a literally split moment in time instant.
    #11     Jan 9, 2013
  2. In addition to what's already been mentioned - you can enter or get out of a position 'after hours' and trade overseas products.

    For the leverage reason though and the fact that futures are seductive, beginning traders (well, everyone) should treat them like a loaded weapon.
    #12     Jan 9, 2013
  3. The thing I don't like about currency trading is that it only takes a central bank one decision to manipulate their currency and it flies in one direction immediately.

    I was looking over Yen charts for the past few years and their are times where the BOJ decides to just print like $100B out of thin air. At that point, the chart just flies vertically off-the-charts.

    How can you feel confident trading that with leverage knowing that 2-3-4 times per year manipulation like that will happen that will completely blow your account (or give you lucky super-profits)?

    I prefer futures for that one reason.. There may be unexpected spikes every now and then but the only ones that approach the levels of unexpected manipulation are flash crashes. Those seem to occur less frequently.
    #13     Jan 9, 2013
  4. Its called: using Stops
    #14     Jan 9, 2013
  5. irniger


    In forex trading almost all "unexpected gaps" are priced in. There are millions of persons and organizations trading currencies and the heavyweights know what's coming, for instance from the central banks. Just check the gaps of the major currencies of last year and you'll find that trading on a H4 basis, more than 90% were "expected" in the price movements resp. visible in with oscillaters.

    #15     Jan 9, 2013
  6. ofthomas


    1) not necessily true, you dont have to overleverage... just making the margin is $500 intraday doesnt mean you should trade 10 contracts with a $5000 account. The contract specs are what they are and the margin from the clearing is what it is, but the leverage part... that is the individual now... also, there are products that offer quarter ticks... the ES is not the only product out there you know...

    2) not necessarily accurate, one can always buy the back month that will reflect ones point of view and timeframe for holding as long as there is liquidity in those months..
    #16     Jan 9, 2013
  7. ofthomas


    in FX, the broker PnL is on the spread.. so there is commission... and while available 24x7... the spreads widen when trading outside of the main market hours for many crosses...
    #17     Jan 9, 2013
  8. ofthomas


    +1 for the dark pools... but as to the HFT... you are mistaken on that one... granted, not at the sub-penny level... but more about influencing price discovery...
    #18     Jan 9, 2013
  9. ofthomas


    LOL.... give it a try... let's see where it gets filled... if there are no bids/offers at that level where your stop is... you will get filled wherever they exist at that point in time ... so in the example provided... if the cross moves $10 against you, and your stop was at -$1 and you are filled at -$5... you are in the hook for the loss where you get filled...
    #19     Jan 9, 2013
  10. Daring


    Some reasons out of the top of my head....

    Leverage, can trade good size without risking tons of cash, not necessarily advocating over-leverage but in today's market of crooked brokers, it's a good option.

    Commission fairly low for the amount of capital you are trading.

    Spectacular technical price action even in fast timeframes.

    Better tax considerations.

    Around the clock movement, allows you to let winners run not bound by early closes.

    No halts.

    No earnings in the way of swings.

    No analyst downgrades/upgrades.

    Superb liquidity, even during the after-hours for economic reports.
    #20     Jan 9, 2013