Advantages and disadvantages of trading Oil(CL) vs. ES
- Thread starter Robertwiz
- Start date
historically and by that I mean prior to Nov 2012, CL futures would commonly range $2,000 - $3,000+ per contract intraday, with several different $1,000+ oscillations inside. So once you got the hang of things, it was pretty easy money.
from Nov 2012 to date, volume and volatility have contracted greatly. That doesn't mean it' s poor to trade... just tougher. A lot of the former CL guys have washed out and quit since then. Like anything else simply takes adjustment.
pros to CL versus ES:
still has more oscillations and ranges than ES intraday = more opportunity to finish profitable
pros to ES versus CL:
much greater liquidity (non-issue for most individuals)
more methodical price movement, i.e. far less algo explosions
less radical chop
half the margin for ES than CL... so you could say trading one CL contract is equal to two ES contracts
**
ES is fine for anyone to trade. CL is superior in some ways for experienced, skilled veterans to trade. If you go on tilt and try to fight the market in CL, i.e. pulling stops, averaging down and all the other stupid stuff, you will go broke much faster in CL.
from Nov 2012 to date, volume and volatility have contracted greatly. That doesn't mean it' s poor to trade... just tougher. A lot of the former CL guys have washed out and quit since then. Like anything else simply takes adjustment.
pros to CL versus ES:
still has more oscillations and ranges than ES intraday = more opportunity to finish profitable
pros to ES versus CL:
much greater liquidity (non-issue for most individuals)
more methodical price movement, i.e. far less algo explosions
less radical chop
half the margin for ES than CL... so you could say trading one CL contract is equal to two ES contracts
**
ES is fine for anyone to trade. CL is superior in some ways for experienced, skilled veterans to trade. If you go on tilt and try to fight the market in CL, i.e. pulling stops, averaging down and all the other stupid stuff, you will go broke much faster in CL.
1) CL can exhibit "better" price movement overnight so you're not constrained by the hours of the primary daytime session.
2) CL has slightly more interesting spread trading possibilities versus HO, RB & BR and its own calendar spreads.
3) CL's pit session closes at 1:30pm (CST) compared to ES's 3pm. You can finish your day sooner and then catch an earlier train home or get on the expressway sooner before rush-hour traffic builds up.
4) Regarding price limits, CL is "slightly better", at first, but the ES overcomes that with its second and third limit, in the event of "meltdown" scenarios during the day. :eek:
so far for the month of Jan my intraday efforts produced +22 points ES ($1,100) per contract and 400+ cents ($4,000+) per contract with one full week left to pad those stats.
the difference? many ES sessions were 6pt - <10pt session ranges, sideways congestive wedging. The only volatility in stocks at these bubbled highs happens in selloffs, such as past two sessions. Typically the new year's real volatility begins last week of January from first FOMC meeting onward. ES price action should return to normal 15+ to 30+ point intraday ranges soon.
Some of us just moved to natty. Some magnificent moves this month, far exceeding crude.
On this note, if you're a counter-trend fader and you fade a trend in the ES, you can get hurt; if you fade a trend in the CL, you're a liquidity provider and can be drained of all your liquid before you even realize you're dehydrated.