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I'm trying to choose between implementing a strategy using the ES and using SPY options. I want the option contract with the tightest spread and a delta of around .83, so I can buy 6 of them for every ES contract I would buy if I were to implement it in the ES, so that I've essentially got 500...

Has anyone done any research on how much the SPY has to move in order for the ES to move? Or is the causality the reverse of that and the ES has to move in order for the SPY to move? But, if that were the case, how would the SPY ever move anything other than a multiple of 2.5 cents, since that's...

Thanks for the response. You mention the closing settlement, so does that mean these rules wouldn't apply if the second position was opened during the overnight session (or if both positions were opened up overnight)?

If you are holding an open long ES trade of 1 contract and you then want to short 1 ES contract at a later point in time, and hold overnight (leave aside for the moment the question of why?), is your margin requirement $5625 for each of the contracts, so $11250, or is adding the second contract...

Agree 100% that there is no point in trying to figure out the "why" of a short-term move. In fact, I think it's one of the most financially-ruinous things a trader can do because it makes the assumption that you are smarter than the market, whereas I think the proper assumption for a trader is...

Would be interesting to know if he was using something like Kelly or optimal F for position-sizing, both of which can give you brutal drawdowns, but, so long as your edge doesn't deteriorate, should maximize account equity over time.

My take is that it depends on your holding period. I trade intraday but don't end each day flat. The exposure to overnight moves when I trade SPY options is something I don't always want (I want it if the overnight ES action moves in my favor, but don't want to either turn a winner into a loser...

To get a delta near 1 on an SPY option, you'll probably pay about $5-7 (depending on where we are in the expiration cycle), so that ratio is not a good apples to apples comparison. But, I'm not sure that the ratio is really relevant for position-sizing. If I'm putting a specific amount...

So you can't trade a long and short position within the same futures account at the same time? I can see how the positions would cancel each other out on one level, but what if you are managing the trades to different targets or stops? Say I'm long the ES and I'm still above my stop and then I...

Others have said it, but I'd condense my advice down to 1. Keep as many statistics regarding your trades as possible, whether they be real or simulated. Win/loss % and ratios, profit factor, Kelly/optimal f (don't necessarily use them for position-sizing, but they'll give you confirmation...

As I recall, the moderators suggested ddav start a journal b/c of the nature of what he was posting originally didn't fit the category he was posting in. I've read many other journals on this site and not a single one of them have the same level of evasiveness and excuse-making on the part of...

If you're right 60% of the time, in this business that's not a failing grade, that's an "A".

Fortunately, there was never a chance I would even consider taking that advice! I've read enough of his posts to know that there's nothing in anything he says which would add any value to my trading.

All three numbers (losses on losing trades, top 10% of winning trade gains and other 90% of winning trades) are about the same number, although, of course, the sign on the losses number is negative.

Another way to deal with getting stopped out prematurely is to have a solid re-entry strategy. That might not be viable for some, depending on the nature of their system, but for anyone who is trading Hourly bars or above, it should be part of their strategy development. You're talking about...

I read in one book (whoops, I guess that makes me a book reading maestro) that a good rule of thumb is that your INITIAL stop should only get hit on around 10% of your losing trades. The other 90% of your losing trades, you should be able to move your stop in your favor. Seems reasonable to me.

According to tonyorlando's logic ("pros don't use stops, they hedge") why wouldn't they be? And if they aren't, what, other than some type of stop or the hedging by acquisition of a equivalent upside-oriented instrument, was the catalyst for the closing/hedging of those trades? Did they close or...

Granted, but let's simplify the model to narrow it to a net short position taken on March 9, 2009, with no stop. If tonyorlando can tell me how that position would be managed by pro who doesn't use stops, I'd appreciate it. Sure, that position could be one of hundreds or even thousands held by...

Also, to take an extreme example, what would a "pro", not using any stops, do with a short position initiated on March 9, 2009? You can't tell me not a single "pro" went short that day and that every single short trade was initiated by "noobs and book reading maestros". Should that "pro" just...

I'm sure you have data to back up your claim about pros! I advocate stops, although, of course, you have to use them correctly, and I don't work for a broker. If pros use hedges in the same way others use stops, then they are functionally equivalent. 6 of one, half-dozen of the other...