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Posts Tagged ‘Futures’

With the turmoils in the global economy, Indian Rupee exchange rate has seen huge volatility against USD and other major foreign currencies during the last three years. In the past, Indian financial markets offered very few options such as currency forwards, swaps and options (traded on OTC – over the counter market) to Indian investors for hedging their currency risks. Cash Forex or OTC Forex trading was not easily accessible to small investors and even more, it was suitable to only large participants due to various factors that acted as deterrent to retail investors.

Although trading forex on exchanges is not a new concept in the international currency markets, Chicago Mercantile Exchange being one of the top exchanges for foreign currency futures and currency options, but in India, trading in currency futures is relatively new. However, after having commenced Currency Futures trading from August 2008, Indian Currency Markets have witnessed huge growth in terms of turnover and number of contracts. At present, three recognized stock exchanges NSE, MCX and BSE offer trading in four currency pairs USDINR, EURINR, GBPINR and JPYINR and very soon the market regulator SEBI is likely to allow trading in Currency Options.

Exchange traded currency futures have come as a blessing not only to large participants but also to retail traders and investors. Here is a quick guide to the basics of currency futures.

What is Currency Future?

Currency Future is a legal contract or a commitment to exchange one currency against another at a fixed price and at a fixed date with the contract tradable on any recognized exchange.

Easy Accessibility: With the availability of currency trading on the recognised exchanges NSE, BSE, and MCX, it has become very easy for all sorts of market participants to trade in currency markets.

Easy Affordability: With contract size of $1000 USD and margin as low as 1.75%, it was never so easy and affordable for any retail investor to take a call on Indian Rupee by taking position in currency markets.

Low Transaction Costs: As compared to high commissions and spreads payable to the banks or foreign exchange agents, you have to pay a small amount of brokerage charges, and statutory taxes when you trade in forex futures on exchanges.

Transparency: When you trade on recognized stock exchanges such as NSE and MCX, it is possible for you to verify trade details if you have a doubt that the broker has tried to cheat you.

Efficient Price Discovery: With its state-of-the-art automated electronic trading system where the orders are executed on price-time priority, exchanges are better poised to offer efficient price discovery than the unregulated OTC Forex markets. In fact, internationally, it has been established that currency future is a better and efficient mechanism for price discovery. 

Swing Trades Stocks

What sets the Watts Trading System apart from the rest of the systems sold out there is the price. In the trading business, you get more for a lesser price and a lot less for a hefty price.

The Watts Trading System by Ryan Watts of the Watts Trading Group is a complete trading package in itself. It not only gives and teaches you trade signals, but also includes the other two extremely important aspects of the trading profession. They are the psychological aspect of trading and the training aspect which comes in the form of Ryan Watts himself and his Free Trading Room. The last Trading System we tried was the overpriced and worthless Invicta Traders Trading System sold by Neil Corke a.k.a. David Cooper or Chris Lawrence and Matthew Kean of Invicta Traders and Super Edge Trading, who are vendors and not traders themselves. That was the final straw that brought the search for the Trading Systems or Method Holy Grail to an end. That is when we decided to just stick with the Watts Trading System and make it work for us. If systems did work so well there would be no discretionary traders left who are the very successful ones in this business. The key to trading success lies in reading the market well and anticipating its next move as taught with the Watts Trading System rather than blindly following some lagging indicators that are based off price alone. Swing Trades Stocks Read the rest of this entry »

How To Trade Futures Market

During my many years of day trading futures markets I have often wished I could get my PC to do my trading for me. Surely it should be possible to automate the process, saving countless hours sitting in front of a screen waiting for trading setups to occur. So, can it be done and, if so, how easy is it? The answer is yes, it is possible, but it is far from a trivial undertaking. Of course, much depends on the tasks you need to automate to implement your trading style. Good brokers offer order types which allow a fair bit of automation of your trading plan. How To Trade Futures Market Read the rest of this entry »