It’s been a long time anticipating futures (moving around some files taking the dust)
So I made a comparison tests of fills of futures vs CFDs, side by side with simultaneous mouse clicks, market orders (important remark since the futures are more “alive” between the spread)
Results : the fills including associated costs are about the same between the big future contracts and the CFDs
So you do feel a disadvantage trading the micro-futures. It is especially true if you exit about flat without much movement, then the overhead can be 1.5x to 2x more than CFDs …if on the other hand, you exit after larger amplitudes, then it is less painful. Conclusion, better watch out your avg win/loss per trade if the micro futures can suit your style without being too damaging
Was exactly the kind of feedback I was wondering about … Thanks !
@alex78 I measured the carry cost of the 6E future (compare the quotation difference versus the spot and count the days towards the expiry date of the contract)
Result : slightly above 3% / yr (for a long position). It’s just a little lower (approx 0.5% maybe?) than the rates charged by the cheapest FX brokers, but not by a mile! Anyway, certainly not free when holding a swing position
Besides several well-known brokers in Germany, Stereotrader is now officially available at AMPGlobal. There the MT5 version is available for customers free of charge. https://www.ampglobal.com/trading/stereotrader.html
I personally use the MT4 version and the MT5 version here at darwinex. A description of the current versions can be found here in German language
Happy trading and nice weekend
I made more fill tests (MT5 futures to MT5 CFDs with an efficient trade copier as setup). This time limit to market orders copying, instead of market to market. Limit orders, even at the best bid/ask instead of market orders, is the wisest way to trade, because of the perpetual noise, enhanced in case of open order book. I listened to a HF chief operator explaining he would split the orders spaced in time evenly on limit orders in order to induce positive slippage on signals. I’m just imitating that for the experience.
Oh boy, in this situation the micro futures win so much more than CFDs. Like 3 times the advantage I’d get from CFD market orders over micro future market orders.
So I tested in reverse mode, limit orders on CFDs copied as market orders on micro futures, to check that the advantage was coming from the order type, not the instrument class. To my surprise, I did not get better fills from the CFD limits, micro futures continued to get better all-included cost fills, just to a lesser extent.
Business wise, it’s a no brainer. Regarding tools, it solves all the headaches.
Do you mind me asking what broker you trade cfd on futures with?
(When) will Darwinex be able to offer a CFD for the CME micro future of the Dow Jones index?
The micro future is avaiable since May 2019.
And what bid/ask spread you are expecting? Will it be comparable to micro futures YM?