Morad Askar, AKA FuturesTrader71 (FT71), has spent years in the futures industry and is well known for his open sharing about futures trading from a professional’s perspective. He has produced a large amount of trade education material on subjects including trade execution, trade management, trading psychology, risk management and more. Morad’s latest effort has been the development of Edge Clear, an innovative brokerage designed for online traders. You can listen to his daily premarket prep session, Trader Bite, at 8 AM CT, where his daily overview and pre-trade planning take place in a live webcast. We sat down with him to talk about his current projects and his advice for new traders, especially trading during the COVID-19 pandemic.
How did you get into the industry and what led you to form Edge Clear?
Morad: I came into futures after trading Nasdaq equities as a high-frequency scalper. I actually entered into futures with TT’s X_TRADER® as my first trading platform at a prop shop. Later, we used X_TRADER Pro in my own prop shop. Although futures trading is not suitable for all investors, I found futures to be much more flexible, available and more readily traded than equities. After coming online in 2008 as part of evolving my trading edge, I found that the online community contained a lot of misleading and complicated information. As I started to share my own trading experience as a professional, I quickly got a large following and continued to grow from there. This led to the development of trading solutions that are designed specifically for the independent online trader. The resulting solutions led to Convergent Trading and Edge Clear. My online presence is predominantly on Twitter and on YouTube.
Edge Clear’s objective is to help the trader apply their focus to trading the markets rather than dealing with brokerage and trading solutions. The needs of the online independent trader are very unique and often underserved. With our unique trading background and experience, we offer traders a more comprehensive, low-cost solution that includes risk management planning, matching traders with technology and offering unique programs such as the Edge Pool initiative. We also offer access to a large variety of futures products and fully support TT®.
How have you utilized TT in the past through your prop firms and at Edge Clear? What features do you and your customers like, and what features do they ask for?
Morad: TT’s X_TRADER Pro was a staple offering at my prop shop a while ago. Every trader had access to it for its direct market access and support. It was paired with X_RISK® to help me monitor trader performance and adjust leverage or liquidation where needed. It was a key part of our success as a firm. At Edge Clear, customers use Trading Technologies’ software to facilitate their executions either directly or through third-party software.
We have surveyed a number of our traders about the functionality that attracts them to the TT platform and found that execution speed, order types, multi-broker support, ADL® and the mobile platform are some of its key strengths. We have learned that traders enjoy using the mobile app as a way to manage their risk when their internet goes down or when they need to manage a position while away from their workstation. If a power outage hits a member’s home in Texas, the ability to log in to the mobile app and manage orders gives a sense of protection before entering the market. On top of all this, we have quite a few members that take advantage of the daily loss limit to put a hard stop on their risk plan. At Edge Clear, we actually encourage our traders to set a daily loss limit on their accounts. It gives the trader more confidence in case they fight the trend or go on tilt.
It appears as though COVID-19 has attracted many new traders into the markets. What guidance can you provide to these new traders?
Morad: I fully believe risk management is the key component that traders do not take seriously enough. We are staunch advocates of trading with a risk plan in place. We encourage our member traders to use the built-in risk controls within TT and other platforms that offer it. When I was learning to trade, risk limits kept me from digging a bigger hole for myself than I could climb out of. Most traders aren’t educated enough about the fact most fail because of a handful of really bad losses that then drain their psychological resilience and grit to remain on their path.
The opportunity to trade during COVID-19 is unprecedented, and we did see a large interest in trading. However, I believe that many come into the field without a clear understanding of the substantial risks associated with leveraged products, a clear plan and a strong grasp on risk control. This is a business, and it must be treated as one. The guidance I share and promote at Edge Clear is to take a moment to put together the following:
- Create a proper plan that includes details about when you will trade, what you will trade, what your time frame is and what your objectives are.
- Focus your entire effort on the process of trading. What do you need to see in order to execute a trade? Your profits and losses are not a good measure initially.
- Avoid trading “from your gut.” Your plan doesn’t have to be algorithmic in nature, but it should give you at least three clear parameters that need to line up to execute.
- Define your risk. How much will you risk on every trade to see it play out? How much per day?
- Keep track of how you are performing relative to how you planned to perform.
- Be keenly aware of your emotions while you trade, but your actions should be governed by your plan and not how you feel. We can’t ignore our emotions, but just know when you are euphoric or on tilt. You don’t have to act on what you feel.
Given the issues you just raised, how are you helping your customers overcome these?
Morad: Every member of Edge Clear is assigned a personal broker and that broker is available to discuss their needs. We provide trading members with solutions to manage risk. TT does this well. We also make sure that the products, quantities enabled and margins used by traders are sustainable. When a trader takes large losses, we lose as well. We are trained to pay attention to when a trader is trading outside of his or her normal zone. We prefer to set hard limits in the platform and we like to use auto-liquidation whenever possible, thanks to TT. We also provide traders with a risk questionnaire or template to help them get started on this.
For someone just starting out, what do you recommend they trade?
Morad: We have been pioneers in pushing for micro-index products since 2012. We believe the market needed these badly and they are here through the CME. At Edge Clear, the brokers and myself suggest that the trader master the micro product live (they trade at 1/10th the size of the mini contract) before transitioning to the e-mini products. The micro-indices exist for the S&P 500, Nasdaq, Russell 2000 and Dow.