Day Trading the Futures, CFDs, and Forex Futures Market [2025 Edition]

Futures trading has been a long-standing component of the financial markets. Its reach has expanded far beyond the original agricultural contracts of the 19th century. Today, traders can trade futures on nearly all asset classes, including forex futures and futures contracts for indices and commodities.  

This guide explains what futures contracts are, the difference between CFDs vs futures, how day trading in futures works, and how traders can use MT4 and MT5 futures brokers to access the market. 

This material is for informational purposes only and not financial advice. Consult a financial advisor before making investment decisions. 

What are Futures Contracts

The first futures contract was written in 1851. The product was corn, and it occurred at the Chicago Board of Trade (CBOT). The plan was for the seller (who was a farmer) and the buyer (an industrial company) to commit to a future exchange of products for cash at a fixed price. 

Essentially, the seller of a futures contract would agree to sell a fixed quantity of a certain commodity on a particular day in the future to whoever wanted to buy the contract. The price of this contract would depend on the demand from buyers, as well as the supply from other sellers. 

The futures market originated in the commodities industry. It was farmers, miners and oil producers who wanted to manage the risk of not knowing the price they would get for their product in the future. This gave birth to the futures contract. In a similar way, the buyer of the futures contract would agree on a fixed price to buy the underlying commodity from the seller on the expiration date of the contract.  

Lesson: A futures contract is a legal agreement to buy or sell a set quantity of an asset at a predetermined price on a specified future date.  

Where are Futures Traded

You can now trade futures contracts on a wide range of markets, including currencies, commodities and stock indices. The pricing of futures contracts depends on the supply and demand determined by the number of buyers and sellers.

Futures are traded on a futures exchange, such as:

• The Chicago Mercantile Exchange (CME)
• The Chicago Board of Trade (CBOT)
• The New York Mercantile Exchange (NYMEX)
• The InterContinental Exchange (ICE)

Futures exchanges can also be found across Europe and in other major financial trading hubs. The only difference now is that instead of people buying and selling contracts in the 'pit', it's all performed electronically through a broker.

How does Futures Trading Work?

Futures contracts are standardised, meaning all contracts for a given market have the same specifications, such as quantity, quality, and expiry date. For example: 

• A single WTI crude oil futures contract on NYMEX = 1,000 barrels of oil. 

Contract codes are used to identify the asset, month, and year of expiry (e.g., CLX21 = Crude Oil, November 2021). You can view the codes directly from the exchange, such as the example below from the Chicago Mercantile Exchange:  

So far, we've mentioned who the futures market was designed for - businesses, farmers, miners and so on. However, because of the often extreme price movements in some of these markets, it has also given birth to speculators and different styles of futures trading.

Day Trading the Futures Market 

Day trading futures involves opening and closing positions within the same trading day to try and profit from short-term price movements. Day traders in futures markets often: 

• Focus on high-liquidity markets (e.g., E-mini S&P 500, oil, gold, forex). 
• Use intraday, low-timeframe (1, 5, 10-minute charts) to find quick entry and exit points. 
• Close all positions before the market session ends to avoid overnight exposure. 

While day traders try to speculate on short-term price movements, a day trading futures style is very challenging to do, is high-risk and requires careful money management, fast execution, and very high emotional mastery. It's not suitable for most traders.  

Other Futures Trading Styles 

• Spread trading: Holding two related futures positions, either on the same market with different expiry dates or on correlated markets, to try and profit from price differences. 
• Position trading: Holding futures for weeks or months, aiming to trade larger price trends. 
• Hedging: Using futures to offset risk in other investments or business operations. 

What are Futures CFDs 

While futures trading can offer interesting opportunities, it can be quite daunting to retail traders as the contract size is often quite large. The possibility of trading futures via CFDs may be more accessible. 

A CFD, or contract for difference, is a derivative product that allows a trader to speculate on the rise and fall of a market. They were originally developed in the early 1990s in London by two investment bankers at UBS Warburg. Essentially, a CFD is a contract between two parties, the buyer and the seller. It stipulates that the seller will pay the buyer the difference between the opening price the contract was entered and the closing price at the contract's end. 

In this instance, the seller is usually your broker, unlike futures trading where you trade directly with an actual buyer or seller of the commodity you are trading. With a CFD, the trader pays the difference between the opening and closing price of the underlying market. Whilst CFD trading may seem similar to futures trading, there are some big differences. 

Fortunately, you can start trading futures CFDs from a demo trading account. This allows you to trade in a virtual trading environment to sharpen your trading skills and build your trading strategy until you are ready to go live. 

CFDs vs Futures: The Key Differences 

Forex Futures 

Forex futures are exchange-traded contracts to buy or sell a currency at a set price on a future date. Unlike spot forex (traded over-the-counter), forex futures are standardised and traded on exchanges such as the CME. 

Traders might choose forex futures for: 

• Transparent exchange pricing 
• Centralised clearing (reducing counterparty risk) 
• Defined contract sizes and expiry dates 

Retail traders may find trading forex CFDs more accessible as it allows you to trade smaller position sizes with no expiry dates but can still be used for speculation or hedging strategies.

How to Trade Futures or Futures CFDs on MT4/MT5 

Many MT4 and MT5 futures brokers offer access to both traditional futures, CFDs and futures CFDs. To start trading: 

1. Choose a regulated broker that offers futures CFDs. 
2. Select your market – Commodities, indices, or forex futures CFDs. 
3. Identify your chosen contract – Futures contracts expire at different dates in the future.  
4. Wait for your entry signal – Use the MT4/MT5 charts and indicators to analyse price patterns for entry and exit points. 
5. Risk manage the trade - Define your risk parameters and keep the risk low 
6. Execute your trade - MT4/MT5 have one-click trading and other order types to execute a trade.  

Advantages of Trading Futures 

1. Full Price Transparency: Futures are openly traded on public exchanges like the Chicago Mercantile Exchange. As they are frequently bought and sold by institutional investors and commercial companies, the pricing reflects the underlying market very closely. With CFDs, the price is calculated from the underlying futures market and then adjusted to accommodate the fees of the broker. These could be minimal or large in liquid markets, but higher in more exotic markets that are not traded as often. 
2. Cost-Effective for High-Level Traders: Commissions for futures contracts tend to be quite low in the larger markets. This might make it more suitable for large quantity traders, due to the cost savings. However, as you will find out below, trading futures requires higher starting capital compared with CFDs. 

Disadvantages of Trading Futures 

1. Big Contract Sizes: When trading futures, you are buying a contract to buy a certain amount of a product or a commodity. These amounts are standardised. For example, Gold trades in a size of 100 ounces per contract, with every one-point move being an equivalent of $100. This means if you bought just one contract (the lowest you can buy on the futures market), then a ten-dollar move against you would mean that you would lose 1,000 USD. Gold is volatile and can move much more than ten dollars a day. With CFD trading, you can adjust your contract size to fit in line with your own risk management. 
2. Expiration Dates: Every futures contract has an end date. This means the value of the contract is eroded the closer you get to the expiration date. It also means that if you wanted to stay in the trade for longer, it may not be possible to do so. With CFDs, there is no expiration date, which adds a great deal of flexibility for a trader who wants to exit their position when they want to. 
3. Fewer Markets Available: Whilst there is a good range of markets available for trading futures, it is nothing in comparison to the volume of markets available to trade with CFDs. For example, Admiral Markets offers more than 3,000+ CFD instruments to trade on. 

Why Some Traders Choose Futures CFDs 

For some retail traders, futures CFDs may offer a more flexible way to access the same price movements as traditional futures without the large capital outlay or rigid contract sizes. With CFDs, you can: 

• Trade smaller positions 
• Avoid expiry-related rollovers 
• Access a wider range of markets from a single platform 

Final Thoughts 

Whether you want to trade futures directly on exchanges or via futures CFDs with an MT4/MT5 broker, it's important to understand the pros and cons of each method, as well as the risks involved.  

Day trading the futures market can be fast-paced but capital and emotionally intensive. CFDs provide more flexibility for smaller accounts, but all types of trading styles involve managing emotions that come with winning and losing.  

Consider trading on a demo account first. This allows you to trade in a virtual environment, practice your skills and strategies before using real funds.

Continue Reading:

• How to Trade CFDs
• Spread Betting vs CFD Trading Guide
• Learn to Trade: A Step-by-Step Guide

FAQs on Futures Trading

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