Currency Futures Trading

In today’s economic climate it is difficult to want to attempt anything where there is risk of financial loss, but in not assessing other potential avenues of income or revenue, might actually be a bigger risk. So, is Trading Currency Futures the answer?

That is totally dependent on what you think is a good opportunity is. Now, let me be very clear here. Trading Currency Futures is not for anyone looking for a conservative investment or has thoughts of trying to get rich overnight. Trading Currency Futures is not for the meek or garden-variety-investor but is for those individuals who have the ability to think outside the box and want to be an active participant in their financial future.

So, if you’re a serious about considering currency futures trading as an alternative investment idea here are some simple facts.

• Currency Futures Trading require a lot less money then opening a franchise business.
• There are no monthly financial obligations such insurance or utility bills.
• In Currency Futures Trading you have a daily profit and loss statement.
• You actually have the potential to begin making money from the onset.
• Trading Currency Futures is not something that is likely to go out of business.
• And you can start Trading Futures with as little as $2,000 U.S. dollars.

These are just a couple of tidbits to consider. Again, trading currency futures is not for anyone who can’t stomach risk or can’t afford to play. And remember even though you have the potential to make money from the onset, then logically you could potentially lose money from the onset. So, if you are seriously considering different alternatives of making money then explore the Currency Futures Market, the most aggressive and exciting markets in the world.

Yes, I am interested in learning more about Currency Futures Trading.

Rate this article “Trading Currency Futures as a Business Opportunity.”

The Currency Futures Market is now trading E-Micro Currency Futures Contracts! What does this mean for the average commodity trader or for anyone thinking about trading leveraged markets? It means that smaller commodity traders can now participate in the most exciting markets in the world for 1/10 the financial commitment.

Before the E-Micro Currency Futures Contract a currency trader trading the Euro Currency was exposed to a financial risk of $12.50 per adverse tick. See chart below.

You can clearly see how trading just one full sized contract of the Euro Currency can be quite tight for someone with an account size of less then $10,000. It doesn’t necessarily mean it can’t be done, but you can see just how decisive a currency trader needs to be with smaller sized account.

Now take a look at the same chart (below) utilizing an E-Micro Euro Currency Futures Contract in place of the full sized contract. Notice the difference between what the same currency trader would be faced with while trading an E-Micro Euro Currency Futures Contract in the same scenario.

So, you might be asking, how does trading an E-Micro Currency Futures Contract help me as a currency trader in Currency Futures Trading? Take a look at the chart below.

Let me just point out. This chart is for illustrative purposes only. The illustration on the chart is not to be considered a hypothetical trade utilizing a trading system, trading methodology or any trading idea. The purpose of this chart is to illustrate the principle differences of trading a full sized contract compared to an E-Micro Currency Futures Contract.

Now with that being stated, let us move forward. If a currency trader had an account size of $2,500 and had taken a long position in the full sized Euro Currency at the close of the 5-minute bar (blue arrow), the question is would a currency trader be able to handle the downside heat? If this fictitious currency trader decided that he or she was willing to risk 10% of their equity, and placed a stop at the area where the trader would be down 10% or $250.00. This fictitious currency trader would have been stopped at 1.4104, which is a hypothetical loss of $250.00 without commission, fees or slippage taken into account.

Now, if the same fictitious currency trader were utilizing an E-Micro Euro Currency Futures Contract instead of a full sized futures contract then the results might be different. The reason would be because the trader could actually give the market more room and risk less of their equity. Here is an example of the same trader willing to risk 2.5% of their equity utilizing a E-Micro Euro Currency Futures Contract. Utilizing the same entry points as the example above in this scenario this fictitious currency trader would not have been stopped out of the position. The reason the currency trader would not have been stopped is because 2.5% of $2.500.00 is $62.50. The 2.5% risk actually equates to 50 ticks below the entry price of 1.4124. This means that the price of the Euro Currency would have had to fallen to 1.4074, which in the above illustration did not occur. The actual low was 1.4094. 

The point is, a currency trader with a smaller account size using the fictitious trading scenario might have been able to withstand the downside move more effectively trading the E-Micro Currency Futures Contract then the full sized contract. I think it’s worth pointing out, and this is just my opinion, but a trader utilizing E-Micro Currency Futures Contracts will not have the added pressure of trading such a larger contract in which a big swing in the wrong direction could wipe out a smaller account. Again this is just an opinion, and by no means am I saying or implying that a currency trader utilizing an E-Micro Currency can’t or won’t lose their total investment by trading E-Micro Currency Futures Contracts.

Another key point is that the E-Micro Currency Futures Contracts are traded exclusively on CME Globex electronic trading platform. These E-Micro Currency Futures Contracts are cash settled which means there is no risk of ever having to make or take delivery. The E-Micro Currency Futures prices settle nightly to the same settlement price as the regular-sized CME currency futures. And everyone who trades at CME Group, from the largest financial institutions to active individual traders, everyone has complete and equal access to the book of prices and trading opportunities.

 Rate this Article E-Mirco Currency Futures ideal for new and smaller Traders.

The Euro Currency Futures Contract is one of the most popular currency markets traded and in my opinion the reasons are simple. The Euro Currency Futures Contract has good liquidity, which allows currency traders to get in and out of the market relatively easy and very close to the last traded price. The volatility in the Euro Currency Futures Contract offers a strong range, which allows currency traders to implement a multitude of trading strategies within a single market. And last but not least with the advancement of the electronic platform all speculators have basically equal access to the Euro Currency Futures Market.

The Euro Currency has 3 specific contracts that can be utilized in speculating on the price of the Euro Currency is relation to the US Dollar.

You can see by looking at the above table that there is a big difference in trading the E-Micro Euro Currency Futures Contract then the full sized Euro Currency Futures Contract. While the e-mini Euro Currency Futures Contract has been established for quiet some time the creation of the E-Micro Currency Market makes the e-mini currency market obsolete in my opinion.

With the creation of the E-Micro Currency Market smaller traders can now implement longer term trades that were once a little more difficult because of the larger capital requirement (read E-Micro Currency Futures ideal for new and smaller Traders). Therefore, a trader can implement a three-prong trading approach that the same currency trader may have not been able to do a year ago.

What is the three-prong trading approach? Think of this approach as utilizing three different branches of the military attacking a single enemy. The three-prong trading approach involves implementing three different strategies within the same market. The main reason in utilizing the three-prong trading approach is to diversify your strategies within a single market, which hopefully can reduce risk in adverse situations while improving performance when trading well. The 3-prong trading strategy involves a short-term trading approach utilizing the full sized Euro Currency Futures Contract, a swing trading approach utilizing the E-Micro Euro Currency Futures Contract and an option strategy utilizing options on the full sized Euro Currency Futures Contract.

Trading the Euro Currency is very exciting and offers currency futures traders the opportunity to make money everyday utilizing a multitude of trading strategies. Remember, if you can potentially make money everyday then you can also potentially lose money everyday, but in that lies the art and beauty of trading currency futures.

Rate this article, “Trading the Euro Currency Futures Contract.”