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Trading Futures vs Trading Equities


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MyTotoro
Vancouver, Canada
 
Posts: 11 since Feb 2012
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So I've been reading a lot of posts since I've joined and before it and I've gotten a few ideas in place: putting aside the trivial (I say trivial because these are related to execution) like broker, platform, datafeed, charter

There are 4 things a beginner can start doing research on:

Commodities, Futures, FX, and Equities

1. Commodities: typical stuff like Gold and Corn, etc. For this, it would largely be a lot of fundamental analysis and probably news driven (being applicable to gold vs. currency printing), I've read on other sites ZH being one that 'the CME group can raise margins' and wipe out smaller players. Does this mean that unless we have a minimum amount of money, we have to be forced out? Also, I know gold is traded on CME, but is it also traded on NYMEX? Is this the same thing as a stock being listed on more than one exchange? It's also traded 24/7 so this is different vs trading strictly during market hours for stocks?

2. Futures: for example the ES S&P 500, are these futures that bet on the direction of the stock market movements? so this would be direct speculation on good rallies or pullbacks? Is the fact that they're marked to market everyday the only drawdown? I've read that Futures aren't for noobs so...

3. FX: it's widely written that not all the brokers are interconnected and that your broker can 'screw you' overnight and so on, or make higher spreads, etc (how so? if you're receiving data from a live feed and buy EUR @ 1.3, and you know your broker charges 10 bps, it's going to cost you 1.301 isn't it? While it might be nice in theory to trade FX, it's different when it's actually being traded

4. Equities: from what I've heard/seen, this is by far for retirement funds... why is that? People don't like to let their money hold overnight? Why is that bad (fundamentals don't change overnight, and you should know stuff like earnings report etc - you shouldn't buy a stock if you haven't done due diligence?)

thanks!


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Last Updated on March 27, 2012


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