So the leverage that is decided in the contract can create problems. Forex and Futures both have their pros and cons, and if you are planning to invest your money, then it is essential to plan everything and research everything properly. Another thing is that before coming to any platform, make sure to educate yourself and get as much knowledge as you can.

Many investors use both platforms, and you must identify your needs before entering any of the platforms. One thing that you can do to increase the chances of being profitable soon gets an experienced mentor that can share real-life examples and tips, and you also have to be patient because it will take some to understand the market better. Privacy Policy. Home Choose a broker Best Forex Brokers Learn trading Affiliate Contact About us.

Home » Education » Forex vs. Futures Day Trading. Forex vs. Futures Day Trading The difference between forex day traders and futures day traders is that the futures contract is an agreement between a buyer and seller to buy or sell a particular asset at a given price on a specified date. Author Recent Posts. Trader since Currently work for several prop trading companies. Latest posts by Fxigor see all. The Best VPS for Forex Trading!

Related posts: Understanding Currency Futures — Futures Forex Trading Futures trading and instaforex What are E-mini futures? Trading Point Meaning — Futures Point Value vs. The clearing houses that settle the contracts often require an initial margin from FX traders. This margin acts as a guarantee for the investor that their account can afford to support the trades.

The maintenance margin is tracked, and when it drops below a set amount, it triggers a margin call. At this point, investors need to deposit more to raise their margin level back above the preset mark.

Exchanges, such as the Chicago Mercantile Exchange CME , list exact maintenance requirements for all supported contracts on their websites. The CME is the worldwide leader in forex futures trading. Other exchanges with high trading volumes include the Intercontinental Exchange and Eurex. Investors can trade forex futures live through an open cry-out system.

However, this option has already been phased out by many exchanges. The most straightforward way is through electronic means, i. the internet. Forex futures represent just another way to trade currencies.

Other methods used by investors to trade forex include:. Both technical and fundamental analysis are used when trading forex futures, similar to stocks. Technical analysis studies the price movement of the forex market using real-time or historical charts. The investor examines important market data such as price and volume to predict future trends.

The most significant difference between forex futures and stocks analysis comes from the use of fundament research. Forex traders must understand macroeconomic fundamentals and forecasting methods. Global events affect forex futures. Inflation, deflation, interest rates, political unrest, sanctions, and commodities prices are a few of the most influential factors.

Usually, a change in any of them will impact the value of a currency. For example, the Japanese yen is particularly sensitive to energy cost, which is a commodity. This is due to Japan being one of the biggest energy producers in the world. Investors frequently use forex futures to hedge or speculate on foreign exchange rates.

Socio-economic factors usually impact the price of currencies, and you must take them into consideration when creating trading strategies. You also need to be aware of the margin size as it can magnify profits and losses. See our list of the best forex futures brokers to start trading today. A currency futures contract is an agreement between two parties to exchange currency on a preset date in the future, at an agreed exchange rate. The contract enables both parties to mitigate risk and establish an exchange rate today, for a time in the future.

This contract can subsequently be brought and sold for speculation, but ultimately, on the day of expiry, the currencies will be exchanged at the agreed rate. Futures are marked to market daily, and changes are settled accordingly until the expiry date of the contract. A futures contract can be sold prior to expiry. The day on which goods or currency are exchanged is known as the expiration date.

The leading US trading Exchange. Nadex offer genuine exchange trading to global clients on Binary Options. Fully regulated by the CFTC. com boast a global reputation. Regulated in the UK, EU, US and Canada they offer a huge range of markets, not just forex, and offer tight spreads on a cutting edge platform. NinjaTrader offer investors futures and forex trading. Use auto-trade algorithmic strategies and configure your own platform while trading with the lowest costs.

However, they are different asset classes. Forex is used for currency trading, while indices represent a cluster of stocks. One of the pros of index futures is their exposure to a wide range of investments. They are diversified from the start. Forex involves trading currency pairs, while futures day trading applies to many financial assets, including stocks, options, forex, bonds, and indices.

They have a contract that specifies the future time and price of the sale. But start with the one you are most interested in right now. Simply put, you can start day trading forex with almost any amount of capital, for day trading futures you will need more, and for day trading stocks you will need the most in the US, elsewhere, you can trade the amount you want. Trading is hard enough, and trying to do it with too little capital will make it even tougher.

Each market has ideal times to trade it. Consider when you can trade, as one market may fit into your schedule better. With day trading, less is often more. There is no reason to day trade for many hours. Trading for 1 to 2 hours is often enough to capture some good trading opportunities during the ideal times to trade.

Forex offers the most flexibility in terms of when to place trades, futures are also quite flexible, and for day trading stocks you need to be available during pretty specific hours. This topic was touched on at the top of the article. I will go into a bit more detail here, but I put it at the bottom because NO ONE SHOULD DECIDE WHICH MARKET TO DAY TRADE BASED SOLELY ON RETURN POTENTIAL…for all the reasons listed above. You want to trade something you are passionate about, that you have time for, and that you have the capital for.

Only you can answer which market is best for you after considering what you are most interested in, how much capital you have, and what time of day you can trade. The main thing is to trade what you are interested in. This is the most important thing. Once we have decided that, we can then arrange our time and come up with the money to make that happen. I day trade the EURUSD and I post my charts on Twitter and in the weekly reviews.

The method I use is covered in detail in the EURUSD Day Trading Course , if you are interested in day trading forex. I also day trade stocks I go in phases…sometimes stocks, sometimes forex, just depending on where my passion is at the time.

For trading active stocks ones that move a lot each day , consider a trend-following strategy using a 1-minute chart to capture trends that occur regularly during the day. No matter what market is traded, or method used, it is helpful to learn and understand the concepts of price action, which is spotting trends and reversals in real-time.

You may also want to day trade stocks that have earnings announcements. Day traders will typically use a 1, 5, 10, or minute chart , or anything in between. The 1-minute chart shows more detail than the longer time frames. Typically, the smaller the time frame used, the more potential trading opportunities.

Larger time frames generally offer fewer trading opportunities, and stop losses and targets will generally be bigger than on smaller time frames. Some people make a lot, while others lose a lot.

When learning, and even for professionals, consider setting a daily limit of how much you can lose. Everyone is bound to have a bad day sometimes, so having a daily loss limit assures that no single day hurts the account. To enforce this, also set a maximum loss on each trade, called a stop loss order , so that if a certain amount is lost the trade is closed automatically. Some day traders will trade up to four or five hours per day, but this is not required. Each market typically offers a few hours each day with lots of trading opportunities.

Even day trading one to two hours is often enough to capture a few of these opportunities. Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage. Cory is a professional trader since In between trading stocks and forex he consults for a number of prominent financial websites and enjoys an active lifestyle.

He runs TradeThatSwing and coaches individual clients. Save my name, email, and website in this browser for the next time I comment. Notify me of follow-up comments by email. Notify me of new posts by email. Sign Up for My Free Weekly Trading Tips Newsletter.

Which Market is Best for Day Trading?

I have traded all these markets and all can make a day trader a great living. You can make great returns in stocks, forex, and futures. That said, futures and forex provide more leverage than stocks.

You can trade bigger positions with smaller amounts of capital. To counteract this though, certain stocks can move a lot, futures can also have significant movement, and forex tends to move the least.

Therefore, the leverage in forex simply makes up for less movement than stocks. Day trade a market you have a passion for, and that interests you. As discussed in Why Most Traders Lose Money , to be a successful trader means being better than most other traders…and that takes work. People with a passion for what they are doing will put in way more work, because they love it, and are more likely to become successful than people who try to put in the bare minimum amount of work and learning.

I started with stocks because the stock market fascinated me. And stocks were a great place to start for me. As I learned about forex and futures, I became interested in them and traded them as well. Pick one market to start with, but you are not committed to that market for life. You can always learn about another market later on. But start with the one you are most interested in right now. Simply put, you can start day trading forex with almost any amount of capital, for day trading futures you will need more, and for day trading stocks you will need the most in the US, elsewhere, you can trade the amount you want.

Trading is hard enough, and trying to do it with too little capital will make it even tougher. Each market has ideal times to trade it. Consider when you can trade, as one market may fit into your schedule better. With day trading, less is often more. There is no reason to day trade for many hours.

Trading for 1 to 2 hours is often enough to capture some good trading opportunities during the ideal times to trade. Forex offers the most flexibility in terms of when to place trades, futures are also quite flexible, and for day trading stocks you need to be available during pretty specific hours.

This topic was touched on at the top of the article. I will go into a bit more detail here, but I put it at the bottom because NO ONE SHOULD DECIDE WHICH MARKET TO DAY TRADE BASED SOLELY ON RETURN POTENTIAL…for all the reasons listed above. You want to trade something you are passionate about, that you have time for, and that you have the capital for. Only you can answer which market is best for you after considering what you are most interested in, how much capital you have, and what time of day you can trade.

The main thing is to trade what you are interested in. This is the most important thing. Once we have decided that, we can then arrange our time and come up with the money to make that happen. I day trade the EURUSD and I post my charts on Twitter and in the weekly reviews. The method I use is covered in detail in the EURUSD Day Trading Course , if you are interested in day trading forex.

I also day trade stocks I go in phases…sometimes stocks, sometimes forex, just depending on where my passion is at the time. For trading active stocks ones that move a lot each day , consider a trend-following strategy using a 1-minute chart to capture trends that occur regularly during the day. No matter what market is traded, or method used, it is helpful to learn and understand the concepts of price action, which is spotting trends and reversals in real-time.

You may also want to day trade stocks that have earnings announcements. Day traders will typically use a 1, 5, 10, or minute chart , or anything in between.

The 1-minute chart shows more detail than the longer time frames. Typically, the smaller the time frame used, the more potential trading opportunities. Larger time frames generally offer fewer trading opportunities, and stop losses and targets will generally be bigger than on smaller time frames. Some people make a lot, while others lose a lot. When learning, and even for professionals, consider setting a daily limit of how much you can lose.

Everyone is bound to have a bad day sometimes, so having a daily loss limit assures that no single day hurts the account. To enforce this, also set a maximum loss on each trade, called a stop loss order , so that if a certain amount is lost the trade is closed automatically. Some day traders will trade up to four or five hours per day, but this is not required. Each market typically offers a few hours each day with lots of trading opportunities.

Even day trading one to two hours is often enough to capture a few of these opportunities. Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.

Cory is a professional trader since In between trading stocks and forex he consults for a number of prominent financial websites and enjoys an active lifestyle. He runs TradeThatSwing and coaches individual clients. Save my name, email, and website in this browser for the next time I comment.

Notify me of follow-up comments by email. Notify me of new posts by email. Sign Up for My Free Weekly Trading Tips Newsletter. Which Market is Best for Day Trading? Stocks, Forex, or Futures? February 10, Posted by Cory Mitchell, CMT Day Trading Stocks Info , Forex Day Trading Lessons No Comments.

No single market has a sustained advantage over another in terms of returns. I will look at returns a little more in-depth at the end of the article.

What Day Trading Market Are You Interested In? Day trading forex involves trading global currencies like the Euro, US dollar, Canadian dollar, Japanese yen, etc. It is the biggest finacial market in the world. You can trade 24 hours during the week. Same patterns over and over. Read the Forex Introduction to learn more on this market.

Day trading futures involves trading contracts on commodities, stock indexes, and currencies including Bitcoin to name a few. Many of these contracts also trade 24 hours with a small break per day. If you have an interest in these things, then maybe futures are for you.

Day Trading stocks involve trading stocks, typically that are high volume and have lots of daily activity in them. Some traders trade the same stock or ETF every day, while others may trade different stocks each day based on what is moving.

How Much Capital Do You Have for Day Trading? See How Much Money to Trade Forex for more details. Or 50x their deposited capital. Day trading futures will take more capital than forex. Thes contracts generally have less volume, so they are not ideal, but may be a good place to start out before moving up to the mini bigger contracts. If you execute 4 or more day trades within a 5 day period, you are considred a day trader.

This makes it the most capital intensive day trading market. Therefore, you can trade with whatever amount of capital you wish. If you are in another country, you can estimate how much capital you need by looking at at the commisisons you pay. The smaller the account, the more commisions hurt. Most other countries have similar rules. What Time of Day Can You Day Trade? With forex, you can place trades any time during the week. The market opens at 5pm EST on Sunday and closes at 5pm EST on Friday.

For forex day trading the entire London session is quite good. This is the ideal time to daytrade. That is from 3am EST to Noon EST. Trading within an hour hour before or after this is also an ok time 2am to 1pm EST , but only if required. See EURUSD Daily Volatility and Price Movement Tendencies for more on this. The ideal time for trading futures contracts will vary a little bit depending on the contract, but most contracts see the most movement between 9am and am EST.

Then the lunch hour kicks in and things are usually pretty slow. Between 1pm and 4pm stock market close there tends to be more action again, so this is also a good time to day trade. Some contacts have their official close earlier in the day. Most futures contracts trade around the clock, so you may find there are some opportunities before 9am, starting at about 3am when London opens. With stocks, the ideal time to day trade is between am and am EST, and then again from 1pm to 4pm.

Day Trading Return Potential for Forex, Stocks, and Futures This topic was touched on at the top of the article. Your profit potential is determined by your reward:risk, your win rate , and the number of trades you take.

If the ES isn't a good fit, consider day trading a global commodity, such as crude oil or futures associated with European or Asian stock markets. Socio-economic factors usually impact the price of currencies, and you must take them into consideration when creating trading strategies. The best strategies take into account risk and shy away from trying to turn huge profits on minimal trades. Some traders trade the same stock or ETF every day, while others may trade different stocks each day based on what is moving. Consider when you can trade, as one market may fit into your schedule better. Instruments CFD, Forex, Stocks, Crypto, Futures, Options, Commodities Regulator CySEC, IIROC, NFA, CFTC, FCA, CIMA Platforms MT4 Min.

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