Trading the Euro Currency Futures Contract
Posted by: Richard Estrada // Category: Currency Futures TradingThe 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.
|
Contract |
Margin |
Tick Value |
|
E-Micro Euro Currency |
$473.00 |
$1.25 |
|
E-mini Euro Currency |
$2,363.00 |
$6.25 |
|
Euro Currency Full Size |
$4,275.00 |
$12.50 |
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.”