FOREX & FUTURES TRADING ON THE WORLD MARKETS

Looking To Trade Forex?
Learn To Trade Forex

There is much we can do to Increase forex profitability.

Many factors that cause currencies to fluctuate are global, such as industrial activity [ I.E. the purchasing of product or resources from other countries that businesses accomplish using other currencies], interest rate changes made by central banks [ I.E. the European Central bank recently dropped interest rates on June 5,2014 which had a profound effect on moving the stock markets as well as currency rates], rumors and breaking macroeconomic news, extreme weather conditions around the world, monetary and fiscal policy changes ,government releases and of course what we’re talking about here — speculation.  Much of the fundamental and technical analysis that is used with stocks can also be applied to FOREX trading.

.Unlike the stock market, the FOREX (Foreign exchange) market is open 24 hours a day except for weekends. The hours below correspond to someone living in the Mountain time zone.

There are no margin calls in FOREX trading and instead of contracts trading units are sold in standard lots of 100,000, mini lots of 10,000 and micro lots of 1,000 often at a 50:1 margin. The higher margin and the uninterrupted trading offer more profit opportunities but also require risk to be tightly monitored.

 

Working with futures has many advantages that options don’t offer. Here are some of the advantages of using futures.

 

  1. They can be traded all week long between 4 P.M on Sunday until 4 P.M on Friday. If there is an earnings announcement or government release you can play the move after hours without having to wait until market open on the next trading day. In addition you are free to hedge your position, preparing it for the morning action.
  2. They are traded using ticks and points. Each point is given a specific dollar value. That value is divided by the number of ticks. For example:  The nasdaq 100 designated by the call sign  /mnq has each point equivalent to 2.00 usa dollars and 4 ticks. Each tick is .5 usa dollars. So each point that the underlying move changes your account value 2.00 with up or down depending on you buying long or selling short. 
  3. Futures are not affected by interest rates, time decay or volatility which makes them more straightforward in their pricing. There is no delta, gamma or beta to keep track of or consider. 
  4. Because of the above features they are great tools to hedge other positions and/or take advantage of highly volatile days.
  5. They work very well when designing positions that can advance in profit from positive or negative moves of the underlying.
  6. Many contracts run at 3 month intervals before expiring. 
  7. They can be used to trade commodities and indexes while also hedging company stocks as noted above. 
  8. You can enter and exit positions as often as you like in a given day regardless of your account value
  9. Each contract you enter requires a certain amount of collateral which is locked. That amount is designated by your brokerage and does not fluctuate as option prices do. That money is held in your account until you exit the position. 
  10. You do have to be approved separately from your brokerage in order to use futures. Because futures move quickly you must be very careful with your money management implementation. 

 

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