Currency Futures News & Information on Cannon Trading

Currency Futures

Category Archives: Currency Futures

In simple terms, a currency futures contract is a futures contract where you agree to exchange one currency for another, on a specified date at a price that is fixed on the date when the contract is purchased.

Having been around since the 1970s, currency futures are counted as medium to high risk contracts. One thing worth knowing about forex is that they are not traded on a centralized exchange, futures currencies however do and that is an advantage for traders in our opinion. Now, in order to bring down the risk of trading currency futures, one can rely on hedging. This blog archive on currency future lists a number of write-ups on currency futures and hedge funds.

At Cannon Trading, we can help you with all that you need to know about currency futures trading. Our professional team educates and assists you in dealing with tricky trade situations. Please do read the informative articles that have been listed under this category.


Trading Currency Futures

February 16th, 2022 Filed under Currency Futures, Future Trading News | Comment (0)

Trading Currency Futures

Trading currency futures offer the perks of a central exchange and transparency regarding the flow of orders as they come into the market. Market participants share a level playing field with volume transparency and the information they use to trade. Traders are provided with peace of mind and can unabashedly focus on improving their performance, which promotes a diverse and liquid trading environment. Confident traders in turn create liquidity in the financial markets.

Trading liquidity persists across many major USD futures currency pairs, including the Euro(6E,) Yen(6J,) British Pound(6B,) Canadian Dollar(6C,) Australian Dollar(6A,) Mexican Peso(6M,) and more. The reasonable margin requirements and competitive trading fees and commissions of the futures market make trading currency futures an attractive option for many styles and types of traders.

However, even though it’s transparent, don’t underestimate the challenge provided by the market itself. Liquidity and tight bid-ask spreads are created from voluminous markets. Importers and exporters hedging their currency risk, financial institutions conducting business, and speculators hoping to earn a living, are all hoping for a better future. This creates a competitive atmosphere with participants jockeying for the best position.  It’s definitely an environment to prepare for carefully.

The exchange continues to provide accessibility for traders of many different capital amounts. Trading at 1/10th the size of the larger contract, the E-Micro FX Futures provides a smaller alternative than their larger relative. Although the fees and commissions tend to scale more economically for the larger sized contracts, the micro contracts allow traders more flexibility to size their positions. In addition, they also provide opportunity for creative hedging, spreads, and pairs trading with the bigger contract sizes. A savvy trader may find themselves geographically tracking interest rates.

Trading Currency Futures: Here Are Some Useful Tips for Budding Traders!

  1. Intimately Learn Your Currency Instrument

It’s common for traders to have a favorite instrument. It can be argued that a trader’s favorite instrument is one that they’re most familiar with. Currency futures traders tend to find niches as each pair or futures contract will have behaviors unique to itself. As technology advances and the markets continually become more efficient, instrument correlation is more obvious. Though correlated at times, the volatility, price behavior, liquidity, and volume of each instrument or currency will be unique.

  • Learn one instrument until you feel comfortable with it. You might find that it’s easier to understand the price movement of other instruments once you’ve studied a single one for awhile.
  • Get specific with how you perceive the price movement of your selected instrument.
  • Learn your instrument’s correlation to others. Ask yourself, “how does my favorite instrument, correlate to the others throughout the market and world?”
  • Watch or practice that instrument on a demo until you feel confident in explaining what you’re seeing.
  1. Define Your Trading Currency Futures Plan

For novice currency futures traders, the excitement of “giving it a try” will often outpace their strategic planning phase. Most traders can remember the thrill of their first few trades. Before long, the reality of the market tends to encroach on a trader’s psyche. Beginners learn that the market is not as easy as they would’ve hoped and they wish they had been more thorough in their planning stages.

  • Assess who you are as a person. Do you know your personality type? Build a trading plan around yourself and your business needs. If you’re trying to trade a strategy that doesn’t fit your personality, your results will suffer.
  • Build a plan that clearly defines when you should or should not trade. If you can’t answer when you should trade, then you should study your instrument further. A desire to learn and improve can be argued as one of a trader’s defining qualities.
  • Prepare for different outcomes. Traders tend to romanticize the results they seek. Trust in your plan. Currency futures trading is full of adversity, all trading is. The consistency of yourself, and your plan, is what will help you through the challenging times.
  1. Execute with Discipline

It’s obvious and underutilized that a trader’s discipline will slip when it’s least expected. The best tools, plan, education, and commission structure will be of no help to an undisciplined currency trader. At the pinnacle of adversity, when asked about discipline, traders tend to smile. It’s a sensitive subject.

  • Practice self-awareness and mindfulness. Ask yourself the hard questions. “Am I trading because of a good opportunity, or am I just trying to make-up for a previous trade?”
  • Develop good muscle memories and rework bad ones. Sometimes traders pickup bad habits as they learn. Do your best to identify these, as well as other stress that could impact your discipline and focus.
  • All traders feel emotion. Don’t let the emotion control your decisions. Trading leveraged instruments may provide you with immediate feedback and that’s not always a positive thing. The markets move quickly and it’s easy to get lost in the action. A good rule of thumb is to try and trade a size that seems boring. If you’re constantly stressed or anxious about your position, it may be too sizable.
  • There’s no easy way to deal with your own challenging behavior. It’s a struggle that all traders face. The deciding factor in your success will be how effectively and confidently you manage your failures. Having discipline in all aspects of your trading creates fruitful possibilities.

Get More Insights and Sign Up for A Free Demo Here: https://www.cannontrading.com/software/e-futures-international?q

Author: Josh Meyers, Broker at Cannon Trading Company

Important: Trading commodity futures and options involves a substantial risk of loss. Therefore, recommendations contained in this letter are of opinion only and do not guarantee any profits. There is not an actual account trading these recommendations and past performances are not necessarily indicative of future results.


Should I Trade FOREX or Currency Futures?

July 18th, 2019 Filed under Commodity Brokers, Commodity Trading, Currency Futures, Day Trading | Comment (0)

By Matt Kang, Senior Broker

FOREX (foreign exchange market or currency market) refers to an international exchange market where currencies(pairs) are bought and sold. For instance, EUR/USD, GBP/USD, AUD/USD and more. If you are trading forex, you can hold your positions as long as you want because it doesn’t have any expiration date. But there is a cost associated with keeping the position over night, it can either be a credit or debit depending on the interest difference between two countries.

Currency futures are in one currency such as EURO FX or Canadian Dollar. Unlike FOREX, there is an expiration date which means you can only hold the position until that time. For example, if you are trading Mexican Peso and South African Rand but carry the position after the expiration date, these currencies are physically delivered four times in a year on the third Wednesday of March, June, September, and December.

 

Liquidity and Centralized Market?

 

The FOREX market is the largest and most liquid market in the world.  There is no centralized location for FOREX, which means there is no one physical location which is supervising this market. Therefore, traders must check the quotes of various currency pairs from each dealer.

The currency futures market has a respectable daily average closer to $100 billion. Compared to the 4 trillion FOREX daily volume. Currency futures are not as liquid as forex, but sufficient enough to trade. Currency futures are a centralized market, and one key aspect of centralized markets is that all traders and investors are able to see same quotes and the existence of a clearing house, it guarantees the integrity of the transactions. The resulting benefit of reduced risk from not dealing with variable counterparties is a key aspect of this.

 

Cost of Trading and Commission?

 

Some people say “I trade FOREX because there is no exchange, no regulatory fees and no commissions” but it is not true.  If you trade currency futures, you will see all of these fees exist, such as NFA fees, exchange fees and commission fees. It will cost around $5-8 (buy and sell) for a self-directed account. If you are trading FOREX, then all of these fees are included in a bid/ask spread. A typical spread for EUR/USD is 1.2 pips which is equivalent to $12.

 

So Should I Trade FOREX or Currency Futures?

 

 

For the average investor who trades an account of $2,500 to $500,000 it is probably wiser, and more cost effective to trade Currency futures. The cost of trading will be lowest with this amount of funding and the roll-over rate will not dramatically impact your trading.

 

If you are working with very little money ($250 to $2,000) OR trading with more than $1 million OR trading some exotic pairs, then you will be better off with FOREX because it offers mini as well as micro trading sizes. Also, if you are investing over $1 million, then it is possible to earn interest and lower spread (fees).

 

Disclaimer – Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

 


Trading Videos+ Trading Levels for June 4th

June 3rd, 2019 Filed under Commodity Brokers, Commodity Trading, Currency Futures, Day Trading, Economic Trading, Financial Futures, Future Trading News, Future Trading Platform, Futures Broker, Futures Exchange, Futures Trading, futures trading education | Comment (0)

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Dear Traders,

Like us on FaceBook!
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Trading 101: Trading videos on bollinger bands, Parabolics, Trading levels, Range Bars and more!
Watch the latest trading videos we have posted and shared with our clients!
In this week’s newsletter we are sharing two videos, each a few minutes long. The videos discuss practical tips for trading and sharing our experience with you
1. Using bollinger Bands as a possible tool for exiting trades
2. One way you can use the Parabolics study ( also known as PSAR) to manage current positions, possibly as a trailing stop
3. Different ways traders can utilize support and resistance levels in their trading.
4. Entering trades on a stop, using “price confirmation”.
5. Utilizing Range Bar charts for shorter term trading as a way to try and filter out some noise.

Good Trading

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

 

Futures Trading Levels

06-03-2019


Economic Reports, source: 

bettertrader.co

 

This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.


Australian Dollar Chart & Economic Reports 11.18.2014

November 17th, 2014 Filed under Currency Futures, Future Trading News | Comment (0)

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

Hello Traders,

 In the past I shared some markets I like to look at for day trading opportunities when stock index futures are in dead/ manipulated periods….Today I would like to talk a little about the currency futures markets. I personally prefer currency futures over FOREX any day. More than a few reasons but the main ones are: currency futures trade on one, regulated main exchange ( CME) while FOREX trades through different inter banks and other means of transactions that are not necessarily regulated.FOREX are “commission free” but in reality there is a spread built in that dealer marks up each time you buy or sell which makes FOREX more expensive than futures.

The main ones I like to follow are:

The Euro , The Yen, The British Pound, The Australian. All are paired versus the US$.

Each market will have different times of higher volume which can allow for traders in all time zones to pick their market. Simply open an hourly chart, like the example I am showing below of the Australian $ and add the volume indicator to observe what times the market has the most action.

  • 1 Euro tick is $12.50
  • 1 Yen tick is $12.50
  • 1 Aussie tick is $10
  • 1 British tick is $6.25
  • 1 Canadian Dollar tick is $10

Currency futures will often trend better than other segments and will experience different levels of volatility during economic reports in the different parts of the world.

If you plan on following any currencies, start in demo mode, know what reports are coming that affect the specific currency you are trading, take a look at the daily, weekly charts to get a feel and monitor the action for a while.

Any questions and I will be happy to assist.

Read the rest of this entry »


Futures Trading Levels & Economic Reports 9.24.2014

September 22nd, 2014 Filed under Commodity Brokers, Commodity Trading, Currency Futures | Comment (0)

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

After a frustrating trading day, I read this one again and thought it is worth sharing:

Educational Feature: Dealing With Losing Trades

By www.JimWyckoff.com

A main tenet of success in futures trading is the ability to accept losing trades as part of the overall trading process. This is not an easy undertaking–especially since many futures traders tend to be of a more competitive nature in the first place. Traders certainly don’t have to enjoy losing trades, but they must accept the fact and move on. Those who can’t accept the fact that losing trades are a part of futures trading usually don’t stay in the business very long.

My wife is a school teacher, and one of her favorite acronyms–ADM–can be applied to losing futures trades. “Accept” it. “Deal” with it. “Move” on. (This is a part of the important psychological aspect of trading, and deserves much more discussion than I can provide in this feature.)

I had lunch with one of my trading mentors a while back. We discussed losing trades. I asked my mentor how many losing trades in a row he has had to endure during his long and successful trading career. His reply was 13 in a row. I asked him how he coped with that. He said that while it was certainly not easy, he knew that losing trades are a part of the business and that he was in the business “for the long haul,” and that his trading methodology was sound. He added, “Ninety-percent of futures trading profits are made on 10% of the trades, which means most of the other trades are either small losers or break-even-type trades.” This is an important fact for all traders to keep in mind.

My lunch meeting with my mentor was good for me because, even though we made no “break-through” discoveries on the path to increased futures trading success, we did reaffirm our own philosophies on trading and markets. My passion for trading and market analysis is fed immensely every time I talk with people in my profession, or attend the quality trading seminars.

Read the rest of this entry »

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