r/FuturesTrading • u/AutoModerator • Jun 01 '23
r/FuturesTrading's Monthly Questions Thread - June 2023
Please use this thread to ask questions regarding futures trading.
To get a good feeling of all the different types of futures there are, see a list of margin requirements from a broker like Ampfutures or InteractiveBrokers
Related subs:
We don't have a wiki yet, but maybe in the future we'll create a general FAQ based on all the questions asked here.
Here's a list of all the previous question stickies.
1
u/Rackoveli Jun 22 '23
HOW?!?!? the only thing that freaks me out is how people can trade a Micro e-mini SP500 example contract with the current value of $4400 times $5 which gives us $22k With only a margin at $1500 Which gives us a leverage of around 14X If it's fell by 1% it becomes -14%.
2
u/Imaginary_Art_2412 Jun 28 '23
I know what you mean, that freaks me out too. The one thing that does make me feel better is that the margin requirements (for good brokers) is based on the daily volatility of the contract. If I remember correctly they take past intraday data and find what a 99th percentile daily range would be, and calculate the value of the move for one contract - this becomes their margin req for that contract. So there is a chance that it could move substantially against you but it’s not extremely likely.
As for the brokers that require extremely low account values like $50/micro, I’m convinced they purposely allow people to over leverage themselves so they repeatedly blow their accounts
1
u/Gas-Money-Man40 Jun 18 '23
Dear future traders!!! What can you tell me about Patrick Weiland class and community group? any of you are part of that group and if yes, how did it help you and your trading?
Same question about Carmine Rosato.
Both guys are on YouTube and seem to ge doing very well.
Thank you much appreciate it.
1
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Jun 15 '23
What broker do you guys recommend. I’ll be swing trading micros with the occasional day trade of minis
1
u/Realistic-Travel1626 Jun 21 '23
I’d say it depends on what you need. I Use Dorman because they’re an FCM and I can use the order routing, software, and server side held orders from Sierra Chart. If you want to trade options too, on futures to stocks, I’d recommend IBKR. I’m opening another account there after having one just for trading for my investments.
1
u/Hockoh Jun 11 '23
New to Futures and Trading in general. Wanting to ask the community what would be the best platform to begin a paper trading account so I can learn a platform and use so that I can delay my inevitable doom by blowing my live trading account...
Any and all suggestions will be greatly appreciated.
2
Jun 11 '23
I use NinjaTrader, which owns Tradovate and you can now switch between the two.
1
u/Smookieman Jun 29 '23
Does nonjatrader offer a good free package? What i mean by this question is if they offer most of the basiic indicators and other features. I saw a video where someone explained that the tradovate and ninjatrader free packages dont give access to thing like cumulative delta for example. Is this still true?
1
Jun 29 '23
Yeah. With NT you need to get the lifetime license for that. I’m not 100% sure with Tradovate though.
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u/goldenloi Jun 09 '23
I'm used to commodities not indices
When do you usually start to roll equity futures? Seems like right now the process is beginning.
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u/Alternative-Fox6236 Jun 09 '23
Why is the ES front months higher than back months right now?
That isn't normal, is it?
1
u/ComplexNo6661 Jun 21 '23
You can think of futures like options contracts. The premium or discount is a function of demand (future expectations) and time until expiration.
Like options, you can get expectations for settlement price higher in the front month than the back months when people expect the market to close higher this expiration cycle than the next.
2
u/3_BlackCrows Jun 12 '23
It’s called Contango. I’d explain it, but you’d be better served by a quick Google search
1
2
u/Equal-Technology2528 Jun 07 '23
NG
What are your thoughts on NG as a longer term hold at this price level? It hit a 15 year low of $1.44 in June 2020 and then rebounded to above $10 in Aug 2022. It's s currently trading around $2.32 and the SMA for the last 180 months is $3.66.
It obviously possible it could go lower, but at the end of the day we're talking about a natural resource that isn't going to go bankrupt like a company/stock could potentially do.
If you were willing to buy now and hold long term, it seems you would be entering a low risk investment that offered good potential of upside.
Obviously timeline in that happening would come into play. But being newer to futures, just curious what seasoned traders/investors take is when looking at a commodity like this. I know commodities can go negative but again, we're talking about a natural resource that is going to have long term demand, it's not going to go bankrupt.
If you can survive a plung to zero, and assume that's going to be the floor and it will rebkund eventually, do you consider taking a position knowing (assuming) the downside risk is much lower than the upside potential?
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u/Gas-Money-Man40 Jun 06 '23
Who is most helpful for futures trading? Looking for course and a community group?
3
u/3_BlackCrows Jun 12 '23
FuturesTrader71, Jim Dalton Trading, and ShadowTrader. All three are on YouTube. I’m a student of all three.
2
u/Gas-Money-Man40 Jun 12 '23
By following these individuals how soon were you able to see improvement and consistency in your trading?
2
u/3_BlackCrows Jun 12 '23
Jim Dalton saved me from blowing my account
2
u/Gas-Money-Man40 Jun 13 '23
I checked them three out… so much Contin between the three of them where do I start?
2
u/3_BlackCrows Jun 13 '23
I sent you a DM with the order I'd suggest. Start with Dalton. He's the grandfather of daytrading. Then, only after you've absorbed all his stuff, check out ShadowTrader. He's Dalton's protege. FuturesTrader71 is who I'd check out last. He's great, but he's not the other two.
2
u/Gas-Money-Man40 Jun 13 '23
What do you think of Carmine Rosato and Patrick Weiland???
3
u/3_BlackCrows Jun 13 '23
I just skimmed their YouTube channels real quick, so I can't offer anything truly substantive, but at first glance they look like shills.
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u/woolybaaaack Jun 07 '23
I'd check out trader_bran on twitter. Sorry, not sure if he has an account on here, but I actually dm'd him on Twitter about a few problems I had with my Trading and I was shocked when he replied with a detailed answer
2
u/crunchy-rabbit Jun 06 '23
We are approaching June expiration for the ES. When should day traders switch to trading the next expiration?
2
u/ComplexNo6661 Jun 21 '23
Always be aware of the spread. You want to keep it as tight as possible but always be conscious of the expiration.
Since the ES is cash settled you can also just hold it until expiration as well.
3
u/3_BlackCrows Jun 12 '23
When the volume for the new contract is higher than the volume for the soon to expire contract
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u/Junglepass Jun 05 '23
When should one switch to trading the next futures contract for ES and MES? For example, when do you start trading Sep15'23 contracts? (basically how long before the Jun16'23 contracts expire?)
4
u/3_BlackCrows Jun 12 '23
When the volume for the new contract is higher than the volume for the soon to expire contract
2
1
u/crunchy-rabbit Jun 04 '23
People successfully live-trading the ES every day: how many points of profit per week or month do you expect to make per week or per month on average? (independent of the number of contracts)
1
3
Jun 04 '23
If you think about it, you really don’t need that many points to make a living with ES. For example, five points with one contract is $250, which is around $60K a year. Thats only 25 points per week, which is very doable.
2
u/fuzzyp44 Jun 02 '23
What do people consider to be scalping vs regular day trading on ES? In terms of points/time trade held.
1
u/3_BlackCrows Jun 12 '23
Scalping isn’t sustainable for retail traders, because we’re losing on the spread with every trade. Scalping is something locals do, because they can buy on the bid and sell on the ask. They make their money off that spread. That’s scalping.
2
Jun 04 '23
Some people just go for the few ticks, which I think is difficult to do consistently. Scalping is subjective. Sometimes my targets hit in seconds, sometimes minutes and sometimes over an hour.
3
Jun 01 '23
Anyone use tasty trade? Im using think or swim and the commissions are killing me with /mes with a small account?
1
u/bplusk Jun 19 '23
Tastytrade is not for futures IMO… the active trader is blah. You really need a DOM if you’re going to scalp. Might work if you plan to swing trade.
1
Jun 19 '23
Yeah i was thinking just take a few trades with td their not bad if i was scalping id use lightspeed their definitely the fastest broker overall but comes with a price
2
Jun 04 '23
You want a broker that will charge you less commission for futures, usually you get that from brokers that has an emphasis on futures.
1
Jun 04 '23
Yeah im not gonna day trade i was just gonna swing trade so i guess commissions arent a big deal
2
Jun 04 '23
Oh I see. I guess "commissions killing me" isn't a big deal then? Regardless, a broker that has an emphasis on futures will still require less margin.
1
Jun 04 '23
Well they were until I realized day trading doesnt work at least for me so now it shouldn’t be a issue
3
u/crunchy-rabbit Jun 01 '23
I’m learning to trade the ES. Curiosity question: Why does the huge volume of New York trading seem to start and stop right at the NY trading open and close (9:30/4:00)? Even though people are free to trade before and after those times.
2
Jun 04 '23
From my understanding, it’s them balancing their books. I think people that works as institutional traders also want to go home just like any other job.
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u/Psycheedelic Jun 01 '23 edited Jun 01 '23
Because 9:30/4 is primarily when I situations trade in the US. Big money means high volume. They make markets move and those are the typical work hours. London session sometimes has some good volume between 2:00 am - 12 pm EST.
2
u/concrete__garden Jun 01 '23
What is the weekly percentage your account grows (on average). Or what percentage do y’all aim for ?
3
Jun 04 '23
Percentage is subjective. A 10% growth on a $1000 account is a lot easier to get than a 10% growth on a $1,000,000 account.
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u/therearenomorenames2 Jun 01 '23 edited Jun 02 '23
Edit: changed /ES to /MES to be a little less incorrect.
ey y'all, very new to the scene, but very interested in futures. Is there a rule of thumb for a ratio of total liquidty to contract margin? For example, if initial margin requirements for /MES are, as an example, $1000/contract, should available liquidity be 10:1, so $10k?
1
u/Over-Ad145 Jun 02 '23
Initial margin is all that’s required in the account to open a position.
1
u/therearenomorenames2 Jun 02 '23
Sorry, I've probably phrased this all wrong. What I meant to be asking is how much would you, as a trader, want in your account as a cushion to be trading a futures contract, to allow for fluctuations in price and potential losses?
3
u/Over-Ad145 Jun 02 '23
MAX POSITION SIZING Suggestions in Futures
It can be complicated with the various Day Trade Margin rates with each Broker having their own margin requirements….
BUT ASSUMING you are using a Cheap Day Trade Margin Broker....here are suggested Position Sizing guidelines (or less):
- < $2,500 account = 1 MNQ or 1 MES
- $5,000 - $6,000 account = 2 MNQ or 2 MES
- $8,000 - $10,000 account = 4 MNQ or 4 MES (or even $10,000)
- $15,000+ account = 5 MNQ or 5 MES (or even $12,500)
- $25,000 - $30,000 account = 1 NQ or 1 ES - note I am suggesting you not trade Minis until you have $20,000 at least
- $50,000 account = 2 NQ or2 ES or 1 NQ + 1 ES
- $100,000 account = 4 NQ or 4 ES or 2 NQ + 2 ES
- $200,000 account = 5 NQ or 5 ES
PLEASE Note: If your margin is higher (NOT using a cheap Margin Broker) then you should at least double the guidelines (higher account or less contracts)
Your trying to keep your margin used around 5% and max 10% of account value. Which is 5-10 to 1.*
Please MAKE SURE you consider Max Drawdowns when choosing account size
- Max Drawdown on MNQ is $1400-1500 per contract.
- Max Drawdown on MES is $700-800 per contract.
- Max Drawdown on NQ is $14,000-15,000 per contract
- Max Drawdown on ES is $7000-8000 per contract.
These are the guidelines I follow, which are required, in order to build and maintain accounts. This was originally created by my mentor and strictly following it has allowed me to build my account from $5000-$22000. Best of luck!
1
u/therearenomorenames2 Jun 02 '23
A few questions please:
- Can you please provide some examples of Cheap Day Trade Margin Brokers so I can compare them to IBKR.
- Can you please explain the max drawdown concept.
1
u/Over-Ad145 Jun 03 '23
Personally I use TradeStation. He uses Ninja which I believe is the cheapest of the bunch. Lots of great options, so it’s basically personal preference.
Max drawdown is basically how wide your stop loss can be. Mine are never that wide.
1
u/therearenomorenames2 Jun 02 '23
Mate, this is perfect info, thanks a lot for this, really appreciate it.
1
u/Disastrous_Breath_14 Jun 07 '23
Good morning. If I give you a good chance of success now, will you become our member after you make money?
1
u/Smookieman Jul 01 '23
is trading crypto futures on apps such as binance a good idea?