Why Trade Futures?
- Thread starter Equanimity
- Start date
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.
Its called: using Stops
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.
Felix
Felix
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..
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...
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.
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.