books on trading Euro FX Futures

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bloom davies

i have recently gotten into futures, so far on demo. I am looking to trade Euro FX Futures, i just want to learn more about the product. I am excited about it, I have been using my usual strategy in trading spot fx. Can anyone tell me of any resources available or strategies i can look into?

Thanks guys

*the spotfx strategies seems to be working well in futures too, but im asking incase theres something im missing.
 
bloom davies said:
oh thanks man. For some reason i assumed that the same strategies i used in trading spot fx, wouldnt be applicable to fx futures. mainly because i noticed the difference in price on the charts between 6edec2016 and eurusd
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You need to go back to basics. A future (or derivative in general) contract has extra dimensions that the "spot" instrument on which it is derived from does not have.

Some examples are:

  • Carrying cost or Interest Rate
  • Storage cost (obviously does not apply to some instruments)
  • Dividends
  • etc, etc...

So the reason the futures price and the spot price don't match is because of these extra computations that must be done in order to derive the futures price. In some cases the futures price is below the spot price, and in other cases the opposite is true.

If you are trading with a chart (technical analysis) and that chart doesn't need the spot price, then the analysis you currently do on the spot mostly carries over to the futures price.

If you are trading the relationship between one or more futures and the spot price, obviously you need to understand these computations.
 
nitro said:
You need to go back to basics. A future (or derivative in general) contract has extra dimensions that the "spot" instrument on which it is derived from does not have.

Some examples are:

  • Carrying cost or Interest Rate
  • Storage cost (obviously does not apply to some instruments)
  • Dividends
  • etc, etc...

So the reason the futures price and the spot price don't match is because of these extra computations that must be done in order to derive the futures price. In some cases the futures price is below the spot price, and in other cases the opposite is true.

If you are trading with a chart (technical analysis) and that chart doesn't need the spot price, then the analysis you currently do on the spot mostly carries over to the futures price.

If you are trading the relationship between one or more futures and the spot price, obviously you need to understand these computations.
More...
Well I'm not trading the relationship between spot and futures prices. I'm looking to move completely out of spot to euro fx futures. So what you're saying is the same strategies I use ( Fibonacci, Ema, price action atr ) would all still be valid on the euro fx futures charts?
 
bloom davies said:
Well I'm not trading the relationship between spot and futures prices. I'm looking to move completely out of spot to euro fx futures. So what you're saying is the same strategies I use ( Fibonacci, Ema, price action atr ) would all still be valid on the euro fx futures charts?
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The only problem in that case that you will encounter is that futures expire and unless you are using a continuous contract (which have their own problems), there will be jumps in your charts.

That is why many (most) traders use the spot to do the analysis, but execute on the derivative if the spot doesn't trade.
 
nitro said:
The only problem in that case that you will encounter is that futures expire and unless you are using a continuous contract (which have their own problems), there will be jumps in your charts.

That is why many (most) traders use the spot to do the analysis, but execute on the derivative if the spot doesn't trade.
More...
Well I won't have over night trades. Short term orders . 12 tick stop and a 30 tick top. Close all orders before bed
 
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