Much to report

Well it has been over a month since I have posted, and the truth is I have not been trading futures. Over the last month I took on two new challenges:

• I began managing my girlfriend's retirement account.
• I did research on finding the best broker to set up a live futures account with.

On the first point I know most of you reading this would think- bad idea. I am not licensed to manage money, I should not be risking my gf's money, etc. But if there is one thing I have learned about licensed brokers it is this- they usually don't do anything special. When was the last time you heard about someone's broker saving their ass in a market downturn? Yea I didn't think so- if fact, I have never heard of a broker saving someone's ass. Brokers are trained in "buy and hold" being the only legitimate strategy. The reality is, in the age of bubble and bust, buy and hold is a recipe for disaster. As sad as it is, I feel that I am more qualified to manage a retirement account than most brokers because I understand the fundamentals of trading and I am trained in portfolio management, which brokers typically are not. What's fun about managing a retirement account is that is a much longer time frame than I am used too. I have found it too be a satisfying and educational experience so far.

And for some good news on this subject- my girlfriends retirement account is up 10.42% since I began managing the account while the S&P is up only 7.04%. That's right- that means a 3.38% abnormal return in 52 days. Annualized on a non compounding basis that would be a 23.7% market adjusted return. Suck on that brokers. Of course the real tests will be when I trade out of certain positions- a task that I have not yet had to do. Lets just say- so far, so good.

On the second point- researching the best futures broker- that has been one hell of a challenge. The charts that you have seen on the blog have been from Thinkorswim. They have an awesome platform, but for live futures trading, there is no nice way to put this- they suck. Their commissions are high, at $7 per round trip per contract. This is just plain and simple, not competitive. My research quickly revealed that no futures trader should be paying more than $5 round trip. Beyond high commissions the data feed sucks as well. After comparing the data stream of TOS with other respected data feeds like Zenfire or TT it is clear that TOS data is slow and filtered. This represents a serious disadvantage in the super fast, tick by tick, world of intra-day futures trading. The final point that is extremely important are the margin requirements. TOS requires over $6,000 in an account to trade one mini dow contract. This is just bloody ridiculous when other brokers offer as low as $400 intra-day margins per contract. Clearly TOS is not the way to go what it comes to trading futures on a live account.

After extensively combing the industry for the best combination of cost, platform, data feed, and margin requirements two brokers were left standing: Amp Futures, and Mirus Futures. Both offer low commissions (<$5 rt) with the best data and trading platform available to retail traders today: Zenfire and Ninja Trader. They also do $500 intra-day margins.