Software Overview – Product Selection – Reading Futures Symbols
Software Overview – NinjaTrader, Jigsaw Daytradr, Replikanto, Ninja Mobile Trader VPS, Journalytix
This is just a quick section to describe the software tools I’m using. Use what works best for you.
NinjaTrader is a pretty popular (if not the most popular) trading software out there. Most of the trader evaluation companies give you a free license to use during the evaluation and some even a free license after.
If you ever venture out on your own (ie. open a brokerage account), you’d have to buy a copy. Make sure your brokerage is compatible with it. I own a copy myself, and while I don’t really use it as my primary trading tool, it is good for taking a look at a chart. It’s actually quite powerful for chart traders. Put all the indicators you want on NinjaTrader.
Jigsaw Daytradr is my main trading software. It sits on top of NinjaTrader is how I describe it. I log into my accounts through NinjaTrader, Jigsaw Daytradr then has a bridge so it pulls all its data from NinjaTrader.
Daytradr is a pure Depth of Market (DOM) trading platform. While it has some additional tools, bells and whistles, it’s primary function is an elaborate depth of market. There’s no demo version of Jigsaw Daytradr, but there is a money back guarantee if you buy it and don’t like it. I’m not saying everyone should run out and get it, quite the opposite. If it’s a tool that you think would help I highly recommend it, but it’s not for everyone.
I’ve been using Flowbots Replikanto since September 2021 and it’s a great product. If you use NinjaTrader and want to be able to copy trades between accounts, this is the software to get. It’s a plug in for NinjaTrader. They do have a 5 day free trial that is fully functional, give it a try.
I just recently started using Ninja Mobile Trader VPS. It turns out they are far more than just mobile trading. Yes, that is a huge benefit, but also you basically are getting an ultra high speed connection right in Chicago close to the CME. Another benefit is you have 1 computer to maintain. I set up NinjaTrader, Jigsaw Daytradr and Replikanto all on my Ninja Mobile Trader desktop, and now I can easily switch between my laptop and desktop since I’m really just using the same machine. I’m a big fan.
Worth checking out, and you get 10% off if you use code CAN10
I made a long video review of Ninja Mobile Trader VPS and even show how it works both on a computer and iPhone.
Journalytix is a Jigsaw Trading trade journaling product. It has a great user interface, very graphically and easy to manipulate. As well there are notifications for news events and more. You can classify all your trades with your own pre defined hash tags, as well as mark what trade set up you used on any given trade. Use the powerful AI to dig into your stats.
Product Selection – Why The Treasuries
I get asked why I trade the treasuries. They aren’t the most popular futures contract, although they aren’t the least either. The information below is why I trade the treasuries, emphasis on “I”. You can trade whatever you like. I’m not trying to sell anyone on trading them. Just pointing out the benefits as I see them.
An easy one to wrap your head around, they have low commissions relative to other products. When you are trading your own capital, commissions become important really quick. Especially if you make a lot of trades. You might be trading away like a maniac and end the day with $400 in profit. Oh but wait, you forgot you were paying $4 per contract each trade. Congrats, you made nothing for your hard work. At least with the treasuries the commission rates tend to be on the low side compared to other products.
High Per-Tick Value
Along with lower commissions, they have a much higher per-tick profit value. The Ultra Bond (UB) is $31.25, 30 Year (ZB) is $31.25, Ten Year Note (ZN) are $15.63. You don’t need a large run of ticks to be making money in the treasuries. For me, they are a product I trade large size and look for small tick profits. 2 ticks profit trading 10 lots of UB is a $600 winner.
That said, remember that goes both ways. This plays into why you have to cut losing trades quickly.
Low Volatility / High Liquidity
In general, relative to other products like the equity indices, they are lower volatility. You won’t see the 30 Year Treasury spike 100 ticks at open. It just doesn’t happen. The shorter term the treasury product, the less volatility as well. The 5 Year Note for example is even less volatile. The Ultra Bond is the most volatile of the products, but it makes sense. It represents the treasury product with the longest time line before maturity, so factors that impact interest rates will have a bigger impact in the longer run. Remember, we are trading futures. Contracts on future prices of instruments.
Along with the low volatility, you can pick the treasury that is best suited for you. I like to gauge the products in terms of how rowdy they are. The Ultra Bond is the most rowdy, and where I usually find myself. But if it’s extra rowdy on a given day, I trade the 30 Year Bond. Sometimes the 10 Year Note if I want a more calm, pick off a few ticks type of day.
There is also high liquidity in treasuries relative to other products. Something like an equity index (ES, YM, NQ) might have less than 10 contracts sitting on the bid or ask at any given point. It doesn’t take a big market order to come in and wipe them out, and if that order is for 500 contracts, it’ll send the equity product spiking as it just clears out price after price. Compare that to the treasuries. Seeing a 1,000+ contract trade in the 10 Year Notes is a common occurrence, and doesn’t move the price needle. You have time to react and read the order flow, which is what I’m ultimately doing.
The treasuries correlate very well together. You’ll see when we get to trade setups what I mean, a lot of the trades I take are when the correlation breaks down momentarily. As a quick example, if the 10 Year Notes and 30 Year Bonds are trading at their highs of the day, but the Ultra Bond is hanging out in the middle of its range, there’s a strong chance it will catch up to the other products. Since the UB travels the most distance in terms of ticks, there’s a lot of potential to grab a 5+ tick winner when it does catch up to its counterparts. There’s also a potential to put on a spread. You’ll see a few examples in a few pages of The Catchup trade I do.
Watching the order flow in the 10 Year, 30 Year and Ultra Bond is basically what my entire strategy boils down to as you’ll see. The correlation between the products is what makes it all possible.
To a lesser extent but something that is important, the treasuries tend to trend well. What I mean is if the 10 Year Notes establish a direction, quite often (not always), they continue this direction for awhile. What they don’t do is go up 2 ticks, pull back 1, go up 3, pull back 4, go up 5, all in 30 seconds. They trend well.
I will say the Ultra Bond will be a bit more volatile, but overall moves in the same direction as the others. So while the 10 Year Notes may be moving up, the UB might do a bit of bouncing around, with a general trend in the same direction as the other products. This matters since you can get stopped out quickly if you trade a more volatile product, and why I also say people should figure out how rowdy they want to be.
Reading Product Symbols
A quick section on how to read futures symbols. Once you know the lingo it becomes easy like anything.
- First and Second letters are the product code. Ultra Bond for example is UB. 30 Year Treasury ZB.
- Third letter is the month code. You can find a list at the CME Group Month Codes
- Fourth is a number representing the last digit of the year. 2 = 2022
UBH2 is the Ultra Bond March 2022 contract. If you are ever stuck, the CME Group website is a wealth of knowledge.
Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Hypothetical Performance Disclosure:
Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.
You can read more here: Risk Disclosure
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