How To Succeed With Futures Trading Platforms

0
17

Futures trading has become increasingly popular among retail traders in recent years. A futures contract is an agreement to buy or sell an asset at a predetermined price on a specified future date. Futures are available on a wide variety of underlying assets like commodities, currencies, stocks, and indices. The key benefits of trading futures contracts are leverage, ability to go both long and short, lower transaction costs compared to stocks, and potential tax advantages.

Major benefits of using Good Future Trading Platforms

Choosing the right futures trading platform is critical to succeed as a trader. The trading platform provides the gateway to enter and exit trades efficiently. Here are some of the major benefits of using a good futures trading platform:

Easy Market Access

A futures trading platform allows you to access a wide range of global derivatives markets from a single account. You can trade popular futures contracts on assets like Crude Oil, Gold, Treasury Bonds, E-mini-S&P 500, and more. Leading platforms offer futures across major asset classes – energies, metals, agricultural commodities, currencies, and equity indexes. This saves you the hassle of maintaining multiple accounts with different brokers.

Powerful Trading Tools

Sophisticated trading platforms offer a suite of advanced trading tools to analyse the markets and execute trades. Key features include real-time quotes, interactive charts with technical indicators, news feeds, risk management tools, and order entry options. Platforms like Thinkorswim, Ninja Trader and Trading View are equipped with extensive charting capabilities and pre-built scanning tools to identify trading opportunities across thousands of instruments.

Back testing and Automation

Back testing allows traders to test the viability of a trading strategy by applying it to historical data. By reviewing the performance results, traders can fine-tune their strategy before risking real capital. The best futures trading platforms have built-in back testing capabilities or allow integration with external back testing tools. Platforms also enable traders to automate their strategies by coding them into automated trading systems that can be run in real-time.

Mobile Access

Leading futures brokers offer mobile trading apps synced with their desktop platforms. Mobile access allows you to monitor the markets and manage your account on-the-go. You can check prices, place trades, modify orders, and implement risk management right from your smartphone or tablet. Seamless mobile integration gives you greater flexibility to trade futures.

Cost Savings

Futures trading platforms provide lower costs compared to other instruments. Commissions on futures trades tend to be very low, costing less than $5 per round turn. There are no clearing, settlement, or exchange fees. The built-in leverage function reduces the margin needed to control a large dollar value of contracts. Overall, these features make futures a cost-efficient trading instrument.

Education and Community

The best futures trading platforms invest heavily in education, providing a wealth of learning resources. These include trading eBooks, video tutorials, online courses, and professional mentors. Some also have community forums and chat rooms where traders can exchange insights. Access to trading education and peer support helps accelerate your learning curve.

Let us look at some of the best futures broker platforms:

  • TD Ameritrade – Thinkorswim

TD Ameritrade acquired thinkorswim in 2009 and made it the firm’s flagship platform. Thinkorswim consistently ranks at the top for its powerful trading tools, ease of use, and multi-asset class capabilities. The platform provides advanced charting, back testing, scanning, and customization features for futures traders. Thinkorswim is also packed with education content and boasts an active trader community. 

  • Ninja Trader

Ninja Trader is a standalone trading platform popular for futures and forex trading. It has an intuitive interface with customizable charting and analysis tools. Traders can back test strategies across equities, futures and forex using historical tick, volume, and order flow data. Ninja Trader supports automated trading through the Ninja Script programming language and connection to various data feed and brokerage services. The platform can be accessed for free for advanced charting and simulation trading. Live trading requires at least $400 commission per month from partner brokers.

  • Tradovate

Tradovate is a futures-focused online trading platform suitable for active day traders. It provides quick order entry, fast trade execution, and integrated charts and analysis. Tradovate is cloud-based and works seamlessly across desktop, web, and mobile. One unique feature is its proprietary Trader Sync technology that continually adjusts to match a trader’s connection speed for smoother operations.

  • CQG

CQG is an institutional-grade platform built for professional traders, brokers, and fund managers. It enables complex order management, global market data, advanced analytics, and API development. CQG supports high frequency and algorithmic trading across futures, forex, stocks, and options. It is widely used by prop trading firms and sell-side institutions. The platform charges exchange fees and market data fees, along with broker commissions. But overall costs are low for active futures traders.

  • Rithmic

Rithmic provides trading technology infrastructure to many retail futures brokers. The Rithmic terminal has an intuitive ladder interface that displays the market depth. It offers quick one-click order entry for fast trade execution. Charting capabilities include multiple timeframe analysis, drawing tools, and custom indicators. The platform has hotkeys for order management and enables automated trading through its C# .NET API. As it powers many retail brokers, commission structures vary across firms.

Choosing a Futures Broker

In addition to the trading platform, the brokerage firm backing it is equally important. Here are key factors to consider when selecting a futures broker:

  • Costs – Commission rates, exchange, and regulatory fees
  • Margin rates – Interest charged on leverage.
  • Product range – Markets and instruments supported.
  • Execution quality – Slippage control, speed, and reliability
  • Customer service – Platform support, account management
  • Technology – Order types, connectivity speed and uptime
  • Licensing – Registered with the CFTC and NFA
  • Reputation – Length of service and feedback from existing clients

Futures Trading Hours

Getting started in futures trading also requires knowing when the markets are open. Futures trade almost 24 hours following the sun from Asian to European to American time zones.

Forex trading open hours for major futures contracts:

  • Oil, Gold: 6 pm Sunday – 5:15 pm Friday (17 hours a day)
  • E-mini-S&P 500: 6 pm Sunday – 5 pm Friday (nearly 24 hours)
  • 10 Year T-Notes: 6 pm Sunday – 5 pm Friday (nearly 24 hours)
  • Corn, Wheat: 7:30 am – 2 pm Central Time, Mon-Fri

Futures exchanges are closed on weekends. However, it is still possible to trade certain major futures like gold and oil through CME Globex and ICE electronic platforms with modified hours.

The most active trading times coincide with the regional business hours. Higher volume translates to greater liquidity and volatility. For an active futures trader, it is essential to understand the prime trading hours of each product traded.

Conclusion

In summary, futures trading provides significant benefits like leverage, short selling ability, lower costs, and tax efficiency. But having the right platform and brokerage service is must. Leading futures trading platforms offer the tools and technology needed to analyse markets, build strategies, execute trades, and manage risk efficiently. With a proper setup, active traders can fully harness the advantages of futures to diversify their portfolio.