Futures and Forex Trading

Futures Trading in a Midland IRA

Futures trading is one of the most popular and common investments in a self-directed IRA. Typically, the IRA owner has expertise in market trading. Never is this more true than with futures and forex traders. Investors need knowledge and understanding of the markets and how they trade. The majority of futures trading in an IRA is done in a managed account where a fund manager handles all trades.

What is futures trading? Futures trading is a contractual agreement between a buyer and seller on a specific price for a commodity such as gold, oil, or orange juice at a specified date in the future. The buyer of a futures contract is taking on the obligation to buy and receive the underlying asset when the futures contract expires. For this reason, futures trading, especially in IRAs, is often speculative, and the contract sells before expiration. Still, it can also be used for hedging against the market or industry. You can trade futures on stock exchanges by buying contracts in the S&P 500, the DOW Jones, and Bitcoin. Unlike the stock market, futures trading is nearly 24/7.

Forex Trading

Forex trading is the trading of currencies. Investors have learned to trade Forex in their self directed IRAs. Investors should have the training and expertise in trading before getting started with these highly specialized and volatile investments. Midland only allows trading with US-based currency exchanges. It is important to understand the intricacies of Forex trading or to work with an experienced manager. Open a Midland self directed IRA and get started investing in Forex today.

How does Forex work? Currencies trade against each other as exchange rate “pairs.” For example, the Euro traded against the US Dollar, EUR/USD pair. There are many different currency pairs available to trade, and you are not limited to USD pairs. As another example, you could trade the Japanese Yen against the Euro, JPY/EUR pair.

Unique Trading Times for Forex

Unlike the stock market, the forex market is open nearly 24/7 as it is open 24 hours a day from 5 p.m. ET on Sunday until 4 p.m. ET on Friday. This unique timing is because currencies continue to trade in markets worldwide, even after the New York exchange closes. Forex trading opens daily with the Australia/Asia area, followed by Europe, then North America.

New York: 8 a.m. – 5 p.m. ET
Sydney: 5 p.m. – 2 a.m. ET
Tokyo: 7 p.m. – 4 a.m. ET
London: 3 a.m. – 12 p.m. ET

During timezone overlap, liquidity and trade volume increases. The two busiest timezones are New York and London, especially during their overlapping sessions. The New York and London overlap accounts for the majority of this five trillion dollar per day market.

Forex markets are utilized by Banks and other financial institutions to hedge their foreign currency holdings as conditions change globally. Individual investors are also able to participate in these markets.

Types of Futures & Forex Trading

  • Self Directed Trading
    • Trade futures/forex independently with a self directed account (for the experienced trader).
  • Managed Accounts
    • Let a professional money manager (Commodity Trading Advisor) do the trading for you.
  • Automated Accounts
    • Automated trading programs able to execute orders at high-speeds following trading algorithms.

Benefits of Investing With Your IRA

  • Building for Retirement
    • Most Americans do not want to rely on Social Security.
  • Earnings Growth
    • The gains within self directed IRAs and other plans accrue on a tax-free or tax-deferred basis to benefit you when you retire.
  • Tax Deductions Can Be Taken on Contributions to Your Self Directed IRA
    • While this does not apply to Roth IRAs—most contributions to other retirement plans and self directed IRAs are eligible deductions on your income taxes.
  • Roth Self Directed IRAs Are One of the Most Beneficial Retirement Plans Available
    • All contributions are made after tax, but the earnings grow on a tax-free basis provided that certain requirements are met.

Trading in IRA Process & Timeline

    - 1 Business Day
    Open a Midland Account

    Midland IRA’s application can be completed entirely online. You may also contact us and we will send you the paperwork.

    - 1-2 Weeks
    Fund the Account

    Transfer funds from an existing IRA or rollover funds from a former employer plan. If you are eligible, you can also make an annual contribution to your IRA.

    - 2-5 Business Days
    Make the Investment - Forex

    Complete FCM paperwork. Title to your Midland IRA account. Most of the time, they will send Midland a copy once reviewed and approved.

Midland’s Role Once the Trading Account is Open

All trading will be done with the FCM. Midland is responsible for all cash flow record-keeping related to the IRA-owned trading account. Whenever you are looking to add additional funds or remove funds from the forex account, it will need to flow through your Midland account. Midland handles the ongoing tax reporting for contributions & distributions of assets held in your Midland retirement account.

Important to Note: Trading accounts must be held in title by the investor account: Midland Trust Company as Custodian FBO Client Name Client Account Number.


Am I allowed to trade with margin?

Can I personally guarantee funds?

I already have a trading account with this futures/forex company. Do I need a new one?

I already sent paperwork to the trading company to open an account. Do I still need to send a copy to Midland IRA?

What happens after my trading account is open?

I want to remove funds from my futures/forex trading account. Can I do this with them directly?

I want to add funds from my trading account. Can I do this with them directly?