Best broker scalping futures

However since , I have gradually moved to scalping and day trading CFDs on the DAX 30 and the Dow Jones 30 while continuing to trade futures on other indices. I've found CFDs effective for an intensive scalper and day trader on some indices because CFDs eliminate many of the shortcomings of scalping futures and day trading. As always, everything is a matter of measurement and precision.

But I hear so much incorrect information about CFDs relayed ad infinitum, I'm going to take the time to say a little about them. Below is my review of the specificities, the strengths and weaknesses of futures and CFDs for scalping and day trading so that you can share my thought process.

Many common beliefs will be overturned and so much the better, a trader who doesn't evolve is condemned. Becoming a futures trader was the objective of my life as a young trader.

In fact, in the early s, the derivative product which was the most liquid, the least expensive, with the best image was futures that crushed all its competitors, Warrants, Turbos and other Options.

Becoming a futures trader was achieving a sort of aristocracy in trading, we only talked about this on stock market forums, there were futures traders and there were others. Futures traders converged with traders from large institutions, they saw lines of several million euros go in a few seconds In early August , the United States of America lost its AAA credit rating and there was panic on the stock markets.

I was then mostly trading CAC 40 FCE futures on the European scalping markets which had become impossible to work with. The gap between the ask and bid prices were from 2 to 3 points different practically all day and institutional investors had fled the market, their order books were desperately empty. I can still remember wanting to liquidate 5 FCE lots between noon and 1 o'clock to get the best offer, there were only 5 lots on line and I waited over 6 minutes before a single lot moved.

A horrible ordeal for a scalper.

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Then the market dropped suddenly, leaving me with 4 lots on my hands and a possible tidy profit became a big loss. I had to face the facts, it had become impossible to scalp CAC 40 FCEs. I had already noticed that there had been fewer and fewer people in this market for a few years, and that gaps were more and more frequent, as much on the CFE as on the Dow Jones 30YM futures, but I stuck to what I knew best, scalping futures.

A day trader friend then told me about CFDs and said that some CFD brokers, including PRT CFDs, offered a 1 point spread on the CAC 40 while I had double or even triple that with futures at certain times of the day, which made this index impossible to scalp or at least difficult to make recurring profits. I wasn't very convinced, CFDs had bad press at the time because the product had just been launched in France bringing down prices, for example the margins were a tenth of those earned by French equity brokers who were traditionally protected, like Orange when Free undercut internet prices by circulating information on the poor performance of CFD brokers.

In short, a little indoctrinated, I cautiously opened an account, telling myself that I was going to temporarily scalp CFDs whilst waiting for the order books to fill up with futures again. And it was a revelation after a few weeks, a few months… Everything which had curbed my performance on futures had disappeared, by trading in the same way, my earnings sky-rocketed… to the point that I divided my scalping and day trading equally between futures and CFDs.

This was also an emotional revolution because I mourned the loss of my position as a futures trader, oh how narcissistic, abandoning the aristocracy of trading, detoxing myself of the rumours that were circulating about CFDs. There is no substitute for personal experience. My only regret is not having moved to CFDs sooner. There is a genuine balance in trading both at the same time and also greater security, in the case of problems with settlement prices Euronext failure , you can switch from one to the other.

The futures market, contrary to what you may believe or read, is no longer the extremely liquid market it once was. In , when I began to scalp futures, it was, but little by little it has dried up I've pinpointed the turning point to To give you an example here is the order book for DAX futures on an entirely normal day:.

Example of an order book for Da futures: You can see that with a price gap of 1, the bid and the ask no longer meet as before, and if you want to "grab" 20 lots for example, there are 4 lots at With 20 CAC 40 FCE lots, you would currently "break" the order book, something that was unthinkable 10 years ago. People who say that FCE futures are liquid, as I sometimes read, haven't seen a FCE futures order book for 10 years This example is identical to YM futures on the Dow Jones 30 which has permanent gaps of 2 to 3 points and even more anaemic order books.

This has consequences on our trading results: Futures lot sizes are not "adjustable": The costs are now often higher than on CFDs: For all inclusive CFDs, I have a fixed spread of 1.

On the Dax, I pay a 1 point spread on fixed round-turn commissions on CFDs with a tick size of 0. Order books are empty on futures a few minutes before an announcement. Spreads are not fixed and they can sky-rocket, it is impossible to enter or exit, you just have to wait and sometimes pray … here again we come back to the problem of liquidity Generally Futures are much more advantageous if the bid and the ask price "meet".

This is a total revolution for scalpers and day traders, we no longer have partially completed orders, there are no more problems of orders stacking up in the order book. CFDs have made order books obsolete, CFD brokers guarantee liquidity, that is their problem, no longer ours.

CFD lot sizes are adjustable, you can buy a 1. You can adjust the size as you like to the nearest 0. For example, the tick size, which is a disguised spread, is 0. For CFDs, it is 0. You can buy or sell within the "futures spread". To enter or exit futures, it will be either or With CFDs you can enter or exit at , And of course, there are more ticks for CFDs than for futures There are even more advantages, such as wider time slots than for futures, it is possible to be more aggressive When futures have less leverage, the margins are higher, they are more secure and reassuring.

You can't " crack " with Futures and get massacred by the use of insane leverage as you can with CFDs. They are therefore more "secure". Because of lack of information, lack of curiosity, comfort and habits In the meantime CFDs arrived and started to shake up the market and its habits. To start with, CFD brokers had bad press, especially in France, which explains why understanding them was delayed. French brokers attempted to preserve their margins by casting doubt on the newcomers' qualities and the world of CFD brokers is indeed vast.

There are about 5 CFD brokers who dominate the market, they are powerful, often quoted on the stock market, monitored, audited and inspected, and some are worth billions. They are regulated by the AMF and the ACPR French independent financial administrative authorities.

Their accounts are guaranteed, segregated etc. One of these CFD brokers is more powerful than the Paris stock market in that they do 4 to 5 billion euros worth of transactions per day whilst the Paris stock market has difficulty to exceed 3 billion euros per day There are also unregulated CFD brokers in tax havens who are more akin to crooks than to brokers.

Scalping Futures - Online Finance Academy

Reliable CFD brokers suffer from the poor image of these companies which are brokers in name only. The choice of a CFD broker is fundamental, not all of them offer the same range of services and protection. You should take your time and do your homework. The best option is to choose a broker listed with the AMF and ACPR, you are then sure to have a reliable broker, regulated by competent people. Steer clear of Cypriot brokers regulated by the Cysec.

Not all CFD brokers offer the same services. For example, my CFD broker offers fixed and guaranteed spreads with a spread of 1 on CAC 40, Dax 30, etc.

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This means that if there is a market panic, the spread stays at 1. Other reliable CFD brokers also offer a spread of 1 on the Dax or CAC 40 but it is not guaranteed, so if there are unforeseen events it can increase to 2, 5, 10, etc. That makes all the difference between a spread of 1 and a guaranteed spread of 1. Be that as it may, there is a transformation on the market that many traders, in either futures or shares, still have difficulty in understanding. You only need to look at the volumes of futures traded in the last 10 years on the CAC 40 FCE to understand that the wind is changing A trader wants to have low fees, absolute liquidity, no slippage, a guarantee that prices are perpetually tradable, to be sure of being able to enter or exit the market when he wants with as many lots as he wants, to be able to choose lot sizes, to have his accounts guaranteed in case of bankruptcy, etc.

AMF and ACP regulated CFDs brokers offer this. I talked about this to my friends in futures, I often feel they are reluctant due to the "status of futures traders", which is highly valued in the public imagination, but those who try it often switch from futures to CFDs very quickly. For example I can't imagine going back to only scalping futures, I would really feel that I was going backwards.

Everything that could swallow me up, my profits on some indices, floating spreads, partially or uncompleted orders, difficulties with entering or exiting unsettled markets, etc. I have my fixed and guaranteed spread, impacted prices, and my orders are completed irrespective of the number of lots. My scalping is now incredibly fluid.

I buy and sell when I want, in the amount that I want, I manage my positions much more keenly by splitting my lots to almost 0. Admittedly, my transition from scalping futures to CFDs sky-rocketed my profits on some indices. I prefer to abandon my poor aristocrat's title of futures trader to profit from CFDs and the additional revenue that they give me. It's a question of efficiency We shouldn't pit CFDs against futures but take advantage of their synergy. In conclusion, I recommend that scalpers and day traders trade both futures and CFDs, or at least have the curiosity to put it to the test.

The simplest test is to ask them how many lots are there on the first lines the DAX 30, YM or ES. Most of them don't know, they have never ordered through these media or seen an order book, etc. But they have been talking and talking and spouting the same nonsense ad infinitum for 10 years.

Sometimes you need to think for yourself and try things out Nothing is all black or all white, it is obvious that, if you want to trade, DAX 30 CFDs are more advantageous and this is coming from a former Dax futures trader for a hedge fund Let's be smart, this is our livelihood. But this was a revolution for my trading and my results on the DJ and the DAX.

The French are always resistant to new things, but even Minitel was eventually abandoned for the Internet in , there is a long way to go in France. Therefore futures are better for ES STOXX Nm for example and CFDs with a guaranteed spread are better on other indices.

And the thing that makes the most sense security Why do I trade CFDs and Futures at the same time? Why do I trade with ProRealTime CFD and ProRealTime Futures? And stop losses are not garanteed and subject to slippage. On CFDs I have a few questions: I use PRT CFDS Regards. Now I called PRT and they told me that I would have problem trading a large amount oc DAX CFDs and the I could experience slippage.

What are your experience of the matter. For exemple a large amount would be the equivalent of 10 futures i. A large amount would be equivalent CFDS 40 futures. I have trade CFDS with no problem. And with limit order, slippage not possible.

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Each investor must make their own judgement about the appropriateness of trading a financial instrument to their own financial, fiscal and legal situation. Comparing CFDs and futures for Scalping and Day Trading 9 27 - 5 comments.

Trading futures, a goal in the early s Contents Trading futures, a goal in the early s But why start trading CFDs in ? Weaknesses in scalping and day trading some futures Strengths in scalping and day trading some futures Strengths in scalping and day trading some CFDs Strengths of futures for scalping and day trading Why don't scalpers and day traders in futures move to CFDs?

Finally what does a futures or CFDs trader want? Comparing CFDs and futures for Scalping and Day Trading. Pivot points in trading Profit Factor and Trading Trading rule number 1: February 3, at 4: January 19, at January 28, at 7: April 1, at 8: April 12, at 1: Leave a Comment Click here to cancel reply. Recent Posts Human capital theory How to invest in financial markets Adverse selection Marginalism Moral hazard. My Cfds and Futures Broker. About Contact - Privacy - Legal notice.