You\u2019ve just decided that it\u2019s time to open a trading account. Maybe you\u2019ve already spent time studying the markets and mapping out your trade strategy \u2013 or you\u2019ve put it on your to-do list.<\/p>\n
However much time you plan on devoting to this task, or how intently you plan on concentrating on it, you\u2019ll also have another important thing to consider \u2013 seriously: who to use as your futures broker. At the most basic level, trading is putting your money at risk \u2013 in the hands of a brokerage house responsible for handling your funds and executing\/clearing your trades. Those trades will incur commissions and require margin to hold in your account \u2013 and all these components call for their own analysis.<\/p>\n
If you\u2019ve decided to open an account with a discount broker, it\u2019s presumed you\u2019ll be selecting a trading platform with which you\u2019ll place your own trades, unassisted. As the name implies, commissions for trades placed through a discount broker are less \u2013 often meaningfully \u2013 than full-service brokers. Commissions are that main fixed cost of trading, so the more trades you make, the higher your fixed costs, the greater the impact on your account\u2019s bottom line. So, certainly you want to be mindful of this aspect of your trading. And to that end, make sure you understand how commissions are quoted, the several elements of a commission and how they\u2019re presented to you overall.<\/p>\n
Futures commissions are almost always charged on a per-trade basis and are quoted as \u201cper side.\u201d Two sides \u2013 a buy and a sell (in either order) constitute a \u201cround turn. \u201dThe elements of a commission include the exchange fee, the National Futures Association (NFA) fee, the brokerage fee and possibly other fees (routing fees, platform fees, etc.) The bottom line when you\u2019re doing your shopping: understand the total per side \/ per round turn commission \u2013 not leaving out any of its elements \u2013 so that you have an accurate assessment of this cost to your trading, so you can compare among those firms with which you\u2019re considering opening your account.<\/p>\n
To quote Warren Buffet, \u201cPrice is what you pay; value is what you get.\u201d When opening a futures trading account, this translates to: know what you want\/need to be the trader you want to be: the features of your trading platform, the availability of your broker, the support the clearing firm provides, the clearing firm\u2019s day-trading margins, whether the clearing firm is staffed with an overnight desk, etc. Find what you want, become comfortable with its costs, open your account, plan your trade and trade your plan.<\/p>\n
One last word regarding trading platforms: there\u2019s no argument that placing trades via an online trading platform with instantaneous access to the futures markets is by far the most efficient means of trade execution \u2013 compared to dialing up a futures broker, providing verbal trade instructions that the broker needs to listen to, repeat back to you to make sure the order is understood and then place the trade on your behalf. So, look for a trading platform you\u2019re comfortable using. There is a fairly wide range of choices available for you to single out for yourself. Almost all FCM\u2019s offer their own proprietary platforms and they support the many third-party ones available as well.<\/p>\n
You\u2019ve just decided that it\u2019s time to open a trading account. Maybe you\u2019ve already spent time studying the markets and mapping out your trade strategy \u2013 or you\u2019ve put it on your to-do list. However much time you plan on devoting to this task, or how intently you plan on concentrating on it, you\u2019ll also […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30,61],"tags":[],"class_list":["post-14366","post","type-post","status-publish","format-standard","hentry","category-futures-broker-2","category-futures-trading-2"],"_links":{"self":[{"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/posts\/14366","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/comments?post=14366"}],"version-history":[{"count":1,"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/posts\/14366\/revisions"}],"predecessor-version":[{"id":14367,"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/posts\/14366\/revisions\/14367"}],"wp:attachment":[{"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/media?parent=14366"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/categories?post=14366"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/wp-json\/wp\/v2\/tags?post=14366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nTrading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.\u00a0 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.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"