Futures Trader salaries in the United States range from $32,680 to $1,119,284 per year, with a median compensation of $203,812 per year. Futures traders in the center earn between $203,812 and $507,784, while the top 86 percent earn $1,119,284.
Is trading FX or futures better?
When compared to spot forex, currency futures trading provides traders with significant advantages. Here are four reasons why many traders choose currency futures to forex, ranging from the security of trading on a licensed exchange to the lack of hidden fees.
Up Front Pricing
Variable spreads make pricing unpredictable when trading traditional spot forex, and transaction costs might vary with each deal. Furthermore, because of the “cost of carry” involved with forex trading, dealers may be charged interest for holding positions overnight. Because of the mix of these elements, the expenses of forex trading are somewhat hazy.
When trading futures, on the other hand, all transaction expenses are known ahead of time. To put it another way, the cost of doing business is known from the start. Additionally, there are no fees for holding futures positions overnight.
Transparent & Level Playing Field
There is less market transparency in FX trading because there is no centralized exchange. Moreover, despite the fact that forex is an electronic market, orders are frequently processed by a “dealing desk.” There are inherent issues in establishing a fair marketplace for all participants when a middle party processes currency orders.
Meanwhile, a centralized exchange trades and clears all futures deals. The Chicago Mercantile Exchange, for example, clears all E-mini trades (CME). This means that all trades, including complete timing and sales information, are made public in real time.
The FIFO rule first in, first out also applies to futures markets. This assures that all futures traders are on an equal footing. In terms of order execution, both institutional investors and individual traders are treated equally.
Accurate Volume Data for Use in Trading Decisions
When speculating on markets, volume is a crucial aspect to consider. Many technical traders use volume to predict when the market is ready to enter or leave a trade.
Because there is no centralized exchange for FX markets, precise volume information is simply unavailable. Traders may have access to volume data from a single forex exchange, but this does not necessarily reflect volume from other forex exchanges.
Because futures markets are centralized, all futures traders have access to volume data. Volume is also important in technical analysis, and several technical indicators, such as the Volume Profile, rely on it.
Diversification Across Sectors
While Forex traders can only exchange one currency for another, futures dealers can invest in a variety of industries. Futures traders may diversify their portfolios by trading everything from equities indexes, metals, and agriculture to bonds, energy, and commodities.
A futures trader, for example, may speculate on the S&P 500, gold, and crude oil all at the same time. Spot forex traders, on the other hand, are restricted to only trading in the currency market.
Is there a future for forex?
The distinction is that forex trading involves buying and selling currency, but futures trading comprises trading thousands of other financial markets, including forex, indices, stocks, commodities, and more.
As a result, you can trade forex with futures (also known as forwards in the forex world) and other derivative products, whereas futures can be traded on a variety of financial exchanges.
You can trade forex on futures, on the moment, and with options with us. Let’s look at each phrase individually to see how they differ from FX and futures trading.
Which futures market is the most straightforward to trade?
You might be wondering what futures are. A futures contract is an agreement between two parties to buy or sell a commodity or investment at a predetermined price at a future date. The vast majority of futures contracts fail to deliver the underlying commodity or security. Because most futures transactions are purely speculative, they provide a way to hedge risks or profit.
The first step toward maximizing the potential of your assets is to find the best futures to trade. Selecting a futures broker is only the beginning of futures trading. You must also select a proper product or market, as well as decide the appropriate size of your trading account and develop a trading strategy.
Futures contracts come in a variety of shapes and sizes. One that is ideal for you may not be ideal for another trader. Markets, on the other hand, have distinct personalities and are as different as the people who trade them. When choosing a market to trade, keep the following crucial characteristics in mind:
- Volatility. Because some futures contracts have a wider daily trading range than others, they are considered more volatile. Volatility is an important factor in calculating risk and reward potential. You might select more volatile contracts because the profit potential is higher. The transactional cost is practically unchanged. Others may find that the contracts with the lowest volatility are better suited to their tactics, as increased volatility raises the risk of losing money.
- Liquidity. Choose extremely liquid products while you’re first starting out. Trade in active markets with enough volume to allow you to enter and exit orders without significantly altering pricing. This will ensure that you can quit a position with the same ease with which you entered it.
- The size of the contract. Select a contract size that is appropriate for your account and trading strategy. You have the option of choosing between a conventional contract and a smaller version known as an E-mini contract. E-mini contracts are traded electronically, are very liquid, and have a minimal starting margin requirement. Micro E-mini contracts, which are smaller, are also an option.
Eurodollar Futures
Eurodollar futures are the most actively traded interest rates in the world. They are a valuable and cost-effective financial instrument for hedging interest rate variations in the United States dollar. Eurodollars are essentially U.S. dollars held in commercial banks outside of the United States. Among their advantages are:
On the CME Globex trading platform, over 98 percent of Eurodollar futures are being traded electronically.
E-mini S&P 500 Futures
E-mini S&P 500 futures, denoted by the ticker symbol ES, are an excellent way to increase or manage your exposure to large-cap firms in the United States stock market. They provide an efficient, liquid, and cost-effective option to invest in the S&P 500 Index, which tracks 500 of the top firms in the United States. The following are some of the advantages of ES futures:
Crude Oil Futures
Crude oil futures are the most cost-effective option to trade the international oil markets. The most commonly traded crude oil contract, the NYMEX WTI, trades around 1.2 million contracts each day. To clarify, one contract equals 1,000 barrels and is worth about $44,740. WTI futures on the NYMEX provide direct access to the global oil market, which is a significant benefit over alternative trading options. If you fit into one of the following two groups, you can trade crude oil futures:
- Hedger. These futures can help you mitigate the impact of anticipated price variations on the value of your oil-related assets.
- Speculator. Crude oil futures can be used to express and profit from your opinions on the direction of oil prices.
Year Treasury Note Futures
Treasury futures are a cost-effective option to trade the US government bond market, which has the highest level of security and diversification of any government bond market in the world. These highly liquid futures can be used to possibly boost income, hedge interest rate risk, spread trade, speculate on interest rates, and modify portfolio duration.
Micro E-mini S&P 500 Index Futures
Micro E-mini futures are a tenth of an E-mini contract’s size. They allow you to trade in the equity index markets in a straightforward and cost-effective manner. These futures help you manage your exposure to the 500 largest companies in the United States. The following are some of the advantages of trading equity index futures:
Is FX trading similar to day trading?
Forex day trading is a short-term trading method that involves buying and selling currency pairs inside a single trading day. Rather than keeping overnight positions, traders typically place a number of forex trades per day and close them out at the end of the trading day. For day traders, the price changes of liquid currency pairings can present a plethora of chances, therefore they will typically seek out currency pairs that are both liquid and volatile.
Which market is the most suitable for trading?
- Traders select markets based on their trading techniques, financial resources, trading hours, and geography.
- Investors can trade on the stock market, the foreign exchange market, and the options market, among other marketplaces.
- The FX market, as well as exchange-traded funds, are popular among day traders because of the low entry barriers.
- The commodities market and the market for contracts for difference are often attractive to long-term investors.
What is the most profitable forex indicator?
Tenkan Sen and Kijun Sen, on the other hand, are two major aspects of this indicator created using the notion of moving average. These two lines move in lockstep with the price, and any rejection from them triggers a trade.
Fibonacci
Fibonacci is a trading tool that gives the most accurate market direction because it is tied to all living things.
The golden ratio of 1.618 is the most important aspect of the Fibonacci tool. Traders in the forex market use this ratio to spot market reversals and profit-taking zones.
If the price follows a trend, corrects towards the 61.8 percent Fibonacci retracement, and then reverses, the price will most likely advance to the current leg’s 161.8 percent Fibonacci extension level.
What is the most effective forex trading strategy?
Important! These techniques can be used as a starting point for creating your own forex trading strategy. The proposed setting and recommended amounts for placing pending orders are only suggestions.
The strategy may not be a fail if you don’t like the backtesting or the performance on a live account. All you have to do now is find individual settings for indicators that are appropriate for a specific asset or current market scenario.
Scalping strategy “Bali
This method is highly popular, as evidenced by the fact that it is described on numerous trading websites. However, different Internet resources offer varied advice on the Bali trading technique.
Bali is a scalping forex strategy, or at the very least, it is designed for short term time periods, according to the developer. It’s also appropriate for day trading. It proposes that stop losses (SL) and take profits (TP) be kept to a minimum (TP). However, because the desired duration is so long, signals are only transmitted infrequently.
The Linear Weighted Moving Average is used as an additional filter in this case. There are essentially no delays in the long-term periods since the LWMA prioritizes recent price movements.
In the long run, the LWMA may occasionally send an early signal. However, this technique just evaluates the MA position in relation to price fluctuations. It is a buy indication if the LWMA is below. It’s a sell indication if the line is above the price.
The indication is likewise based on Moving Average, however the calculation formula is different. Its design is more precise (the price noise is reduced).
It allows you to detect trend breaks a little earlier than the standard MA. The property of Trend Envelopes is intriguing. When the price breaks through its previous trendline, the color and placement of the line change. It’s similar to a trading signal.
Under the chart, the indicator is displayed in a separate window. This oscillator identifies pivot points in trends. It does it faster than traditional oscillators.
It has two lines: a dotted signal line and a solid supplementary line. However, there are two distinct colors on the receiving line (orange and green).
Important! It’s worth noting that the indicators in the Bali trading method were chosen to deliver early buy and sell signals. This allows a trader to confirm market movements and analyze fundamental elements with greater time.
The MA indicator is a basic MT4 tool, and the other two indicators are available for free in the archive at this link. In MT4, go to “File Open data folder” to add them to the trading terminal. After that, navigate to MQL4/Indicators. Restart the platform after pasting the indications into the folder.
On the upside, the price breaks through the orange line of the Trend Envelopes. The descending orange line on the same candlestick became the rising blue line.
The candlestick is higher than the LWMA. When the prior criterion is met, look for the candlestick to appear above the MA. The candlestick has to shut above the LWMA’s red line. The blue Trend Envelopes line must be visible at the signal candlestick.
At the signal candlestick, the supplementary line of the DSS of momentum should be green. This line must be higher than the dotted signal line (that is, it is breaking it through or has already broken).
When the signal candlestick closes, enter a trade. In a four-digit quote, I propose establishing a stop loss at a distance of 20-25 points. 40-50 pts is a take profit.
The arrow points to the signal candlestick, which is when the colors of the Trend Envelopes change. The blue line is below the orange and is moving (purple ovals) (otherwise the signal should be ignored). The green line of the DSS of momentum is above the dotted line at the signal candlestick.
The price has broken below the blue line of the Trend Envelopes. The rising blue line becomes the falling orange line at the same candlestick.
The candlestick has fallen below the LWMA. Expect a candlestick to appear below the moving average if the prior criteria is met. It must close below the LWMA red line. At the signal candlestick, there must be an orange Trend Envelopes line.
At the signal candlestick, the DSS of momentum additional line should be orange. It should be placed below the dotted signal line (that is, it is breaking through it or has already broken).
1. The screen below shows a candlestick that closed at the MA (red line) level, almost completely below the line.
2. The DSS is below its signal line at the signal candlestick, as shown in the screen below. Besides, the blue line isn’t increasing; it’s flat.
Signals are uncommon, so you may have to wait a few days for one. In half of the cases, you’d be better off monitoring the trade and exiting it before the price reaches the take profit. When the market is flat, don’t trade. Evaluate the performance of this method immediately in the browser.
Candlestick strategy “Fight the tiger
This is a winning weekly trading method that can be used to trade different currency pairs in position. It is based on the price’s springy action: if the price climbed swiftly, it will decrease sooner or later.
We can use a chart and a timeframe W1 in any terminal (although you can also use a daily timeframe). The size of the candlestick body of various currency pairs should be examined. The following pairs are available: AUDCAD, AUDJPY, AUDUSD, EURGBP, EURJPY, GBPUSD, CHFJPY, NZDCHF, EURAUD, AUDCHF, CADCHF, EURUSD, EURCAD, GBPCHF, EURAUD, AUDCHF, CADCHF, EURUSD, EURCAD, GBPCHF.
Then, within the week, identify the pair with the greatest difference between the opening and closing prices.
At the start of the following week, you’ll place a trade on this pair.
The bear candlestick, which represents the previous week’s price activity, has a comparatively large body.
At the start of the following week, you enter a long trade. A stop loss should be placed at a distance of 100-140 points, and a take profit should be set at 50-70 points.
Exit the transaction in the middle of the week. A take profit or a stop loss might be used to close it. Then, once again, anticipate the start of the week and place a new order. Orders should not be placed at the end of the week.
The graphic shows that there is always a bullish candlestick following each bearish one (although it smaller).
The question is how long should you compare the respective lengths of candlesticks? Each currency pair has its own set of rules.
Some little bear candlesticks were followed by rising candlesticks, as you can see. Risk management, on the other hand, advises against opening a counter-trade (a long trade). The relatively minor drop from the previous week could continue.
The bullish candlestick, which represents the previous week’s activity, has a comparatively large body.
The candlesticks with huge bodies in comparison to the prior bullish candlesticks are indicated by red arrows. Except for the deal signaled with a blue trade, all signals were lucrative. The strategy’s downsides are few indications, despite the strategy’s high profit percentage. You can also use the approach to trade many currency pairings at the same time.
This method has a clever variation based on the same premise. Intraday techniques are preferred by investors and day traders with a high trading volume. They don’t have enough cash to have a significant impact on the market.
As a result, if there is considerable market action on the weekly chart, it indicates that big traders are exerting pressure. To put it another way, if three weekly candlesticks point in the same direction, the fourth candlestick should also point in that direction.
The psychological aspect is equally significant in this case. One month is represented by four candlesticks. Those who have been driving the market in one way for a month should begin taking profits.
The weekly chart has a “three candlesticks” (rising or falling) pattern.
It’s preferable if the next candlestick is larger than the prior one. Doji candlesticks (candlesticks with no bodies) are not considered.
The close level of the first candlestick in the sequence serves as a stop loss. The take profit is 50% to 100% of the previous candlestick, but it is often preferable to personally quit the transaction.
Four of the five patterns are profitable. The strategy’s disadvantage is that you can wait a long time for a pattern to appear. It could take two or three months.
This term of anticipation is justified, however, if the strategy is launched on many currency pairings. Take exchanges into consideration!
“Profit Parabolic trading strategy based on a Moving Average
The method is known as a universal one, and it is frequently cited as the finest Forex strategy for achieving consistent gains. It uses typical MT4 indicators, EMAs (exponential moving averages), and a confirmation tool called a parabolic SAR.
This is an example of a trend strategy. The majority of sources recommend utilizing it in a variety of periods, including minute ones, but market noise reduces its effectiveness in very short timeframes. It is preferable to employ timeframes of 15-30 minutes. You can trade any currency pair, but you may need to adjust the parameters of your indicators.
With intervals of 5, 25, and 50, the EMA is a useful tool. A (5) is red, a (25) is yellow, and a (50) is blue. close apply to (closing prices).