How Do You Trade Micro Futures?

If you’re looking for instant forex funding for trading, you might have heard the term “micro futures” being used in relation to forex trading. But what does this mean, are micro futures different to standard futures contracts and how can you trade micro futures if this is what you’re interested in?

Let’s start with the basics…

What are forex futures?

Before we look at micro futures, we need to explore forex futures to help us understand the difference between the two types of trades. Forex futures are contracts that allow you to buy or sell currency at a specified date, time and contract size.

To trade in forex futures, you will need to put down a deposit on your trade, known as a margin. One of the reasons why forex futures trading has become so popular over the years is that the margin required here is lower than for traditional stock market trades. This makes forex futures accessible to a wider number of investors.

The other figure that it’s important to understand when forex trading is the tick This is the smallest possible price movement within a given currency pair. Ultimately ticks are used to track the changes in value between currency pairs.

The size of a tick depends on the exchange you’re trading through, as they set tick sizes, as well as on the contract instrument you are using to trade.

How are micro futures different from standard forex futures?

The way in which trades are executed for micro futures is much the same as for standard forex futures. The big difference is in the size of the trades. As their name suggests, micro futures are smaller value trades.

Essentially, the contracts you trade in are of a smaller value. This has two main benefits – first that you need less capital up front to get started with forex trading and second that you are exposed to lower financial risks.

It stands to reason that if you are putting less money down to make a trade, the amount you could lose is lower. This makes micro futures a good starting point for those who are new to forex trading and want to learn the ropes with lower risk.

In general, micro futures contracts will be one-tenth of the value of standard futures contracts. This means the margin size is lower, as is the tick size. Of course, while micro futures minimise your potential losses, they also minimise your potential gains.

This means they aren’t suitable for all traders and, indeed, you may decide that once you’ve got a better understanding of forex trading from using micro futures that you want to graduate to full forex futures trading.

Are micro futures the same as mini futures?

No. Mini futures are still smaller than standard futures trades, but are a higher value than micro futures. Think of mini futures as the next step once you’ve mastered micro futures trading.

Mini futures are one-fifth of the value of a standard contract, which means you will have larger margins and larger ticks than you do with a micro futures trade. Ultimately, understanding the levels will help you better manage your risk, particularly while you’re learning about futures trading.

How can I trade micro futures?

At FTUK, there is now the option to trade micro futures within our platform. You can either apply for instant funding, or choose the one-step funding option. This latter option gives you a chance to prove that you are able to effectively manage risk in the markets.

Once you have consistently demonstrated your trading skills in a simulated account, you can transition into real forex or futures trades. With futures trading, you will keep 100 per cent of the rewards you generate once you’ve been funded into a futures account. With forex trading, you keep 80 per cent of the rewards once you have a funded account.

When you have a SIM futures account, you will be funded to between $50,000 and $150,000. The advantage to opting for micro futures when you start trading is that you can make many more micro futures trades than you can mini futures trades – you could trade up to 150 micro futures versus 15 mini futures.

Ultimately, the process of trading micro futures is the same as full futures trades. However, because the values are lower, there is less risk to you and also less pressure. This makes micro futures the perfect types of trades to start learning the ropes with and to help you on the road to making money from your trading activity.