Many Traders have asked me what trading platform I use when daytrading the S&P ES Futures. I use the NinjaTrader platform and recommend it to anyone who wants to daytrade the Futures market.
I am often asked why I’m trading the ES Futures and not the S&P CFDs (Contract for Differences). I have years of experience trading both the S&P CFDs and ES Futures and I will outline why I trade Futures using the NinjaTrader platform in this article.
Futures Trade on Centralized Exchanges
A significant difference between Futures and CFD trading is that Futures trade on centralized exchanges such as the CME (Chicago Mercantile Exchange) and CBOT (Chicago Board of Trade), while CFDs are not required to trade on centralized exchanges. On centralized exchanges, there are rules that the market price must be set at a specific price that regulated brokers are required to follow. There is no fixed price required for CFDs on decentralized exchanges. Since unregulated brokers are not required to show your trade order price in a decentralized exchange, you could be buying at a bad market price. Worse still, some brokers have a conflict of interest to widen the price spread so they can benefit from you losing.
When I daytrade the ES Futures, I know the market price before getting into the trade. For example, ¼ tick of the S&P ES Futures is worth $12.50. A Trader buying the ask would be required to pay a $12.50 spread. With CFDs, the price spreads can change from each trade! For more information on the difference between Futures and CFD trading, check out my blog “Why I Trade Futures instead of Forex“.
Measuring Risk to Reward and Position Sizing Possible on Futures
It was unnerving to me that the price spreads can change from each trade with an unregulated broker. One of the first things I learned when I attended Trading school is that it is critical to determine your risk-to-reward ratio before getting into a trade. With a set market price in Futures, I can figure out my risk-to-reward ratio on every trade and determine my position sizing with every trade in Futures.
If unregulated brokers can change the price spread on every trade, it would be impossible for a Trader to measure the risk to reward on each trade with CFDs. I would rather be on an even level playing field with other Traders with Futures. I did not want the outcome of my trades to be at the mercy of unregulated brokers trading CFDs.
Unfiltered and Filtered Market Data Feed
Unfiltered market data means you are getting every tick in trade reported to you from the centralized exchange with no filtering involved. Many market providers show filtered data by not reporting all the transactions that occur (see Figure1 below for an illustration between unfiltered and filtered data).
What makes NinjaTrader unique is that their market data feed is unfiltered. With all data on NinjaTrader being true tick-by-tick data, Traders are assured that no data points within a series have been lost. Traders using technical analysis need the most accurate representation of the price action at the exchange that NinjaTrader can provide. If you analyze filtered data, your trade analysis may not be accurate, causing you to miss trade opportunities, and it can also affect where you should be putting your Stop Loss and Take Profit targets.
Unfiltered Data Filtered Data
1 2 3 4 5 6 7 8 9 10 1 3 5 6 8 10
Figure 1
Different Market Prices between Futures and CFDs
As many of you know from “My Trading Journey” blog, I had an S&P Trading Coach named “Carol” (pseudonym). When I first joined Carol’s coaching program, I was trading S&P CFDs. Carol traded Futures using NinjaTrader and would post her Daily timeframe charts with Fibonacci levels every day. The price levels on her NinjaTrader charts (using unfiltered data) would be slightly different from the price levels on my charts (using filtered data).
One day, I noticed that the Daily price closed at a different Daily level on my trading platform than Carol’s posted Daily chart. How the price closes on the Daily chart can likely indicate where the price will be heading the next day. That was when I realized the importance of using unfiltered data.
After switching to the NinjaTrader platform, I also noticed that the price was respecting the Fibonacci levels better than with CFDs. When S&P CFD trading, price often did not use the Fib levels or have much of a reaction at the levels. The unfiltered data gives me the most accurate representation of the price action at the exchange. With NinjaTrader, the price frequently hits my Fib levels to the tick, which gives me that edge when day trading.
Backtesting Using Free End-of-Day (EOD) Market Data
As many of you know, I did not backtest enough when I started learning to Trade and lost money. I learned the hard way the importance of backtesting. Backtesting allows Traders to figure out their trading plan without risking their money. For new Traders, I strongly recommend backtesting your trading strategy before using real money. Don’t chase after the money. Stop focusing on the outcome (profit) and focus on the process (learning to trade by backtesting).
Kinetick is a market data feed provider used exclusively by NinjaTrader. One way Traders can backtest their Trading strategy for free is by using the Kinetick end-of-day (EOD) market feed. Free EOD data means Traders wait until the end of the Trading day to download the Kinetick historical data to test their Trading strategy. Traders who are working a day job or are unavailable during the live trading session can use the EOD market for free. For Traders who want to use the live market feed, NinjaTrader offers a free 2-week trial.
NinjaTrader Video Tutorials by Rose Excellence
I have been using the NinjaTrader platform to trade the ES Futures since 2019 and never looked back. I recommend NinjaTrader to anyone who wants to daytrade the Futures market.
I created NinjaTrader video tutorials on my YouTube channel, Rose Excellence. My YouTube channel also has other Trading-related videos showing what I have learned on my Trading journey. When I think back on all my struggles learning to trade, I hope my videos can help new Traders in some way.
Business Coaching with Rose Excellence
There were many times I felt lost on my Trading journey. I would have succeeded a lot faster with more hands-on coaching and guidance. I created a Business Coaching program to help new students learn financial investments more quickly than I did.
I often felt alone on my Trading journey, so I created a Discord group for retail investors to discuss ideas with each other. I believe there’s strength in numbers, and I want to build a community for retail investors to provide support and help one another. You will have better success in Trading by learning with others than by yourself. Traders can join my Discord group at this link:
If you would like to find out more about my Business Coaching program, feel free to send an email to RoseExcellenceCoach@gmail.com, and we will chat soon.
Thank you,
Rose 🌹