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The Dos and Don’ts of Using Your Smartphone for Futures Trading

by | Tips & Strategies

Although the history of the smartphone only dates to 2007, it has had an immeasurable impact on all of our lives, from the way we communicate to the way we conduct business. Simple person-to-person dialogue has evolved into a fully interactive experience. Society in general has made the transition into the digital era never to return.

We complete a wide variety of everyday tasks from our phones, including trading futures. But is trading futures from a mobile device a good idea? Can a person engage the market efficiently via smartphone?

Addressing the Challenges of Mobile Futures Trading

Traders are always looking for an edge in the marketplace. Identifying areas where your edge, not to mention profitability, may be compromised is a crucial exercise for anyone considering trading from a mobile device.

Technology

Perhaps the most obvious pitfall of mobile trading is an increase in “latency.” Simply put, latency is the amount of time it takes a “packet” of information to go from point A to point B.

“Trade-related latency” is the time necessary for trade execution, from mouse-click to fill at the exchange. In the futures market, anything that increases trade-related latency can cost money.

So, is it even possible to trade futures without adding undue latency via smartphone?When done properly, yes.

  • DO: Ensure that your device is virus free and equipped with a robust trading platform. Any hitches in the operating system can increase latency dramatically. Staying virus-free is an absolute must.
  • DO: Make sure that you have the fastest, most stable data connection possible.A cutting-edge smartphone in proper working condition is on-par with the capabilities of a desktop PC. The only thing that will hurt your trading is a slow connection to the market. As long as strong connectivity is preserved, then mobile futures trading is viable.
  • DON’T: Use an underpowered or slow device for active trading.Your smartphone must not only be smart, but among the smartest available. Older and lower-end devices may increase your risks.
  • DON’T:Attempt to trade in areas where internet connectivity is spotty.This can be more difficult than it seems. Just because there’s a strong data connection present, does not mean that YOUR connection to IT is strong. Performing several “ping” tests with a relevant server (exchange servers if possible) will produce a more accurate picture of true data flow.

The Human Element

Futures trading can be a demanding, all-encompassing endeavor. Markets are capable of moving rapidly, requiring split-second decision-making and constant attentiveness. Although technology presents several unique challenges, personal psychology and mindset are also circumstances that affect the mobile trader’s odds of success.

Here are a few suggestions that may help reduce the number of mistakes an aspiring mobile trader will make:

  • DO: Avoid physical distractions.At times it can be a monumental challenge, but finding a quiet place to focus on the task at hand can limit physical errors.
  • DO: Double check your analysis and order entry before initiating the trade.It may be an obvious point, but a smartphone’s display is much smaller than a collection of 24-inch HD trading screens. Accurate charting and order entry can be a nuisance when working on such a small visual scale.
  • DON’T: Overtrade.The convenience of mobile devices gives us the ability to trade anytime, anywhere. Temptation to dodge in and out of positions across asset classes can be considerable. Always trade within the parameters of a clearly defined strategy.
  • DON’T: Multitask.Often, this is easier said than done. Texting, participating in social media, or even talking can cause mistakes if you’re trading at the same time. Remember that trading futures involves frequent transfers of money. Mistakes typically cost money.

Getting Up and Running

There’s no debating that modern mobile devices are technological marvels. The computing power of the average smartphone is more than 2.5 times that of the Cray-2 Supercomputer, which was used by NASA to simulate shuttle launches in the late 1980s. Such impressive functionality has made smartphones the benchmark for global connectivity.Mobile devices offer convenience and flexibility. When used properly, they can be an effective tool at the disposal of any futures trader. 

 

Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

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