If you’re looking for the best futures trading software, you might be new to the futures trading game.
As a refresher, know that a futures contract is an agreement between two parties to buy or sell a given commodity at a certain date and price at a future date. Futures trading can be useful for businesses that want to ensure a steady supply of products and buyers.
For example, a retail store selling out of a particular brand of sweater may sign a futures contract with the sweater’s manufacturer to purchase 500,000 items at $10 each three months from now. This contract is beneficial to both the buyer and the seller; the retail outlet has the peace of mind that comes along with knowing that the sweater will not be discontinued or rise in price, and the seller knows that he will sell half a million sweaters and will have plenty of time to produce this large quantity.
Successful futures traders can make a significant amount of profit with very little money actually changing hands. However, there are also a number of risks to understand before you sign–and a great futures software can help limit your risk.
Before you proceed, understand the risks
Futures trading is generally considered to be one of the riskiest types of trading. Understand and accept the risks is a crucial part of responsible financial management.
Risks associated with futures trading are most often the result of leverage abuse. When buying and selling currencies, futures brokers often allow traders to control more money than they have in their accounts to make buying and selling contracts more worthwhile.
Theoretically, if your broker extends a 10:1 leverage to you, you can sign a futures contract agreeing to buy $10,000 worth of a given stock with only $1,000 in your account. Should the value of that stock decrease, you’ll still be stuck with the $10,000 contract and a less valuable asset in your hands.
Liquidity refers to the level of ease you’ll encounter should you want to sell something at a stable price. Assets with high liquidity, like blue chip stocks or a futures contract that’s been locked in at a lower rate than market price, can be sold readily and easily to a number of eager buyers. However, a contract that binds you to buy a stock that’s decreased in value at an inflated price will have very few buyers clamoring to take it away from you,leaving you to foot the bill.
Rising interest rates can scare off investors, which will lower the price of the stocks in your futures contract and make them less valuable.
Our picks for the best futures trading software
Now that you understand the risks, it may be worth it to choose software that can help you make the best possible decisions, have a reasonable cost, is easy-to-use, and accessible across several platforms.
1. Ally Invest
Ally Invest is a trading platform and brokerage firm that’s especially useful for beginning futures investors. New traders who are just getting started with Ally will be diverted directly to the Ally Invest LIVE platform, which was retooled for the purposes of functionality.
From creating an account to reporting taxable income, the Ally Invest LIVE platform was created with the novice in mind, explaining all necessary steps with clarity.
Ally Invest offers 84 technical indicators, and its charting software is intuitive and easy to operate. It’s important to note that if you already have an account with Ally, you will need to open another account to trade futures. However, Ally Invest LIVE makes it easy for even a totally beginner to get started, and its research and education tools can be valuable if you’re looking to further your technical understanding without paying for a costly monthly subscription package.
Consistently recognized as one of the world’s leaders in desktop trading, TradeStation offers a robust trading platform and low-cost trades. The company’s newest release, TradeStation 10, was designed to act as a foil to its online web trading platform.
TradeStation’s web-based platform will appeal to new futures traders and those who want to keep things simple; the design is basic, tools are functional yet not overwhelming, and its customer service team has been consistently praised for its professionalism and short wait times.
However, TradeStation 10 appeals to the segment of futures investors who are looking for more features and tools. Many of the new additions to TradeStation 10, such as its RadarScreen tool (which allows investors to chart market trends and follow a particular movement) and itsHot Lists feature (which offers alerts to unusual market activities) were previously only available to brokers.
When combined with $5 trading fees and daily unique webinar offers, TradeStation is a powerful tool that can be equally as useful to a new investor as it is to a seasoned professional.
- Frequent traders looking for volume discounts
- Professionals who need a powerful platform: Lightspeed's Level II, Livevol X, and RealTick Pro
- Intermediates who are looking to advance their trading knowledge and strategy
Lightspeed’s platform has a very specific target market in mind: high volume traders who buy and sell as a career, not a side hobby.
Its account minimums are high; you will need a minimum investment of $10,000 to get started with Lightspeed. However, for frequent traders, Lightspeed’s volume discounts can be worth the massive investment.
Traders who make between 250 and 750 trades a month pay just $4 per trade, and those who make more than 10,000 trades a month pay just $2.50—that’s about half as much as users on competing low-cost platforms.
Similarly, Lightspeed also offers deep discounts for futures traders as well. Expect to pay between $0.25 to $0.60 per contract depending on how many trades you make a month. Overall, Lightspeed is a great choice for serious traders who can take advantage of package discounts. For more casual traders, other options may be more affordable and just as useful.
4. Sierra Chart
Founded in 1996, Sierra Chart is a futures analysis software that’s been continuously under development for over two decades. Don’t be put off by Sierra Chart’s AOL Online-esque site—the software is all about cutting the frills and passing the development savings on to the user.
Subscriptions to Sierra Chart start at $20 a month and increase in price depending on the package options the user selects. .
Customer service options are limited. Currently, Sierra Chart does not offer phone or chat support, and some customers have expressed frustration with the company’s lack of email responsiveness.
The characteristic that makes Sierra Chart unique is its massive customization potential; the software offers over 300 technical studies, alerts, and indicators. Programming gurus can even upload their own indicators to personalize the platform further. For experienced traders and tech nerds, Sierra Chart’s completely customizable platform is the prime spot for a personalized futures deck—though more inexperienced traders and the less tech-savvy will likely find the program to be too overwhelming to be of any use.
eSignal is a charting software that’s most useful for professional traders who are looking for customization but who do not have the technical knowledge to effectively operate Sierra Chart.
eSignal offers hundreds of alerts and indicators options, combined with the customer support options that are missing from Sierra Chart’s platform. eSignal is just as effective as a trading platform as it is a charting software, allowing traders to connect with over 50 brokers and link multiple accounts from one single platform.
eSignal also offers mobile app compatibility for on-the-go traders. Subscriptions to eSignal start at $50 a month but be aware that low-level packages do not include real time data streaming—a feature that many professional traders find crucial.
Rithmic is a professional-grade futures trading software created by passionate industry professionals that offers exceptionally low subscription prices and commissions.
The platform only offers futures trading, but it takes this specialization to heart by offering fast order routing, real time data feeds, and Excel compatibility. Rithmic’s team of developers has taken an exceptional level of care backing up user data.
Both the platform’s hardware and its exchange data have been backed up by multiple layers of protection—so if you’re particularly concerned about fraud or you keep a large amount of money in your account, Rithmic can provide an increased level of peace of mind.
Rithmic’s basic package is free to use but serious traders may want to consider subscribing to Rithmic Trader Pro, which offers an expanded set of tools.
Beginners should proceed with caution, as some users have criticized the platform’s customer support; users have called the platform “intimidating” for futures novices and complained that customer support is available for very little beyond technical installation of the software packages. However, for those who already understand the futures market, Rithmic’s focused platform and user-first pricing structure will be a breath of fresh air.
Few trading platforms are programmed to help beginners use the futures trading market because very few traders can stomach the risk that comes along with selling contracts. If you’re a new trader, learning more about market movements and price fluctuations through a low-cost day trading course can help you gradually ease yourself into the futures market and offer you the education you need to help protect your financial future.