New to futures coming from forex, few questions...

[fxRichard]

Hey guys, looking to move from forex to trading futures. Pretty new to this side of trading and need input on a few things. Before the questions I'll tell you my style and what I use to trade.

I'm a US citizen used to trade with LCG (London Capital Group) before the whole US forex regulation.

My style is scalping on a tick chart, looking for small movements. I have no set risk:reward ratio, all I know is max risk for the trade (never more than 6 ticks but varies based on the trade) and let winners run as much as I can. The same setup may give 5 ticks one day and 50 the next.

I use ninjatrader with a bunch of custom pieces I have built for my setup. I plan to start with ES and focus on that. Important things for me are keeping the transactional costs down as much as possible.

With these things in mind my questions are:

1) What is the ideal broker that supports ninjatrader?
2) Ninjatrader has their own brokerage through partnerships offering $.53 commission for futures trading. I haven't looked into this yet but how does this commission compare?

3) Any advice or things to stay away from with futures and the ES specifically?

4) how are fills and slippage with ES

It's early morning here and I'm sure I'll have more questions, hoping the ES tick chart is not too insanely fast. I find EUR/USD which I primarily focus on to be rather slow lately.

Thanks guys.

 

[fxRichard]

Watching ES on a tick chart and it's much slower than I anticipated...

 

[TradeCat]

From what you've wrote you're gambling. Coming from a Forex background you will lose a lot of money on Futures. Futures carry unlimited risk and you can lose more than you have.

Why not trade equities with margin instead?

 

[fxRichard]

Thanks for the response TradeCat. What makes you say I'm "gambling" from what I stated above?

 

[fxRichard]

Perhaps a little more explanation is in order. I did not say I don't have a set risk.

My risk varies based on the setup, never more than 6 pips, typically between 2-4 on average. Every trade is different. What I did say is I don't have a set reward. The market is different every moment of every day. The same setup will yield different results. To have a set profit target is not my style. Your cannot expect the market to conform and hit your expectations.

Who says I don't follow a trend? I say small movements because most people trade larger time frames looking for bigger pips. Those larger moves you see in that trend are made of smaller moves that make up the trend.

To say having a very tight few pip stop on entry while letting your winners run until exhausted is gambling then call me a gambler. To me gambling is putting a trade in expecting it to hit some target you defined, either missing it by just a few to turn and end in a loss or to run on way past cutting yourself short.

 

[kelly anderson]

Chinese Yuan (Renminbi): How long will it be feasible for China
I heard China now holds $2 trillion; Rogoff asks if they really want to be holding
$4 trillion in five years?
How long will it be feasible for China to peg its currency to the dollar at a fixed exchange rate?

 

[DirectMarketAccess]

Here ya go:

1) What is the ideal broker that supports ninjatrader?

Answer: Probably Ninja. After Ninja started their own firm, there are very few FCMs and IBs that offer new users access through Ninja.

2) Ninjatrader has their own brokerage through partnerships offering $.53 commission for futures trading. I haven't looked into this yet but how does this commission compare?

Answer: $.53 is pretty damn low for commissions. Firms like RJO charge around $7.00. $.53 is considered deep discount trading.

3) Any advice or things to stay away from with futures and the ES specifically?

Answer: Try not to over leverage yourself. There's tons people trading at the super-low margins, where all it takes is a 10 point move off of a news event, and all of your money is gone. Aside from that, practice the restraint that you would while trading any other product or market.

4) how are fills and slippage with ES

Answer: The futures matching engines/algorithms vary greatly from Forex. Futures firms do not control the "spread" or bid/ask like forex firms do. 99.9% of the time, your fill prices will be better in futures than in Forex. Forex brokers make most of their money off of widening the spreads, and making you pay a higher price when you buy, and selling at a lower price when you exit or short.

Hope this helps.

 

[wrbtrader]

...

3) Any advice or things to stay away from with futures and the ES specifically?

...

Backtest your trade method on all available futures trading instruments that you have access to so that you can determine which trading instrument you should be trading.

It's very common for traders to be trading the "wrong" trading instrument that results in losses when their trade method is profitable on something else. Whatever you do, do not start trading the Emini ES futures under the facade you'll figure it out later if its profitable or not for you.

 

[fxRichard]

Here ya go:

1) What is the ideal broker that supports ninjatrader?

Answer: Probably Ninja. After Ninja started their own firm, there are very few FCMs and IBs that offer new users access through Ninja.

2) Ninjatrader has their own brokerage through partnerships offering $.53 commission for futures trading. I haven't looked into this yet but how does this commission compare?

Answer: $.53 is pretty damn low for commissions. Firms like RJO charge around $7.00. $.53 is considered deep discount trading.

3) Any advice or things to stay away from with futures and the ES specifically?

Answer: Try not to over leverage yourself. There's tons people trading at the super-low margins, where all it takes is a 10 point move off of a news event, and all of your money is gone. Aside from that, practice the restraint that you would while trading any other product or market.

4) how are fills and slippage with ES

Answer: The futures matching engines/algorithms vary greatly from Forex. Futures firms do not control the "spread" or bid/ask like forex firms do. 99.9% of the time, your fill prices will be better in futures than in Forex. Forex brokers make most of their money off of widening the spreads, and making you pay a higher price when you buy, and selling at a lower price when you exit or short.

Hope this helps.

Thanks for this great response DirectMarketAccess. I appreciate you taking the time.

I currently have an account with IB but what I am finding is their feed is quite slow and not good enough when trading off of a tick chart. Sometimes the chart delays and all of a sudden an influx of data comes in and it updates. I have never had this problem before.

If I were to switch to the NinjaTrader brokerage they appear to be an introducing broker for Dorman Trading and Phillips Capital. Anyone have any experience with either of them?

NinjaTrader supports Continuum and Rithmic for futures data feeds when using them as a brokerage. Anyone know which is the better feed or would I be better off with a monthly paid data feed?

Thanks!

 

[Xela]

Hey guys, looking to move from forex to trading futures.

I did that, nearly a year ago, and can throw in a thought or two, but with no promises that they'll help.

My style is scalping on a tick chart, looking for small movements.

You're slightly closer to being a scalper than I am, I'm guessing, from your general description - even though your description of letting things run doesn't really fit my picture of scalping at all.

I would still suggest that you at least consider the possibility of using constant-volume charts rather than tick charts, for futures. The reason I switched from Forex to futures was that on the advice of ex-institutional trader friends who were very familiar with how I trade, I wanted to be able to use constant-volume bars. I just wish I'd done it earlier (and am saying that as someone who made what most people would call a decent living from spot forex for quite a while before switching).

I plan to start with ES and focus on that.

I spent 6 months looking at ES, CL and NQ (planning to switch, while I was still trading forex), and decided to go for NQ as my primary instrument, rather then ES.

The advantages of ES are all the ones you already know about (and probably the reasons you've selected it). I offer the observation that for someone used to trading EUR/USD and Cable, as I was, NQ is overall much more like what you're used to looking at. I'm glad I chose it. Yes, ES does have bigger volume (of course) and probably, overall, better fills (just about), but it's as boring as hell and will try your patience, if you're used to scalping forex. Just my perspective.

I use IB and like it, but won't advise about brokerages. I haven't compared enough to have any insight to offer.

hoping the ES tick chart is not too insanely fast.

It's however fast you set it to. You choose the number of ticks just like you'd choose a temporal periodocity if not using tick or constant-volume charts. I strongly prefer constant-volume, myself.

I find EUR/USD which I primarily focus on to be rather slow lately.

This comment confused me and I don't really know how to respond to it, except to state the obvious, i.e. that you get to choose what speed/tick-count/volume-count of charts you want to trade from. If you're talking about, for example, "the amount of action there is in an n-minute period", I was coming from EUR/USD and preferred NQ because ES felt like watching paint dry and I wanted something that moves a bit more. Just my perspective (but I'm guessing from the wording of your questions that it might be a rather different one from yours, in which case just ignore me on this point!).

Whatever you do, do not start trading the Emini ES futures under the facade you'll figure it out later if its profitable or not for you.

I feel a bit cheeky "endorsing" WRBtrader's comments, given that he has far more experience than I, but this is clearly right, and pretty important.