Are some markets easier to trade than others?

L

Laissez Faire

Hello traders,

I`ve heard it said time and again that you should not trade a certain market, be it the ES or FX, because those markets are ultra-competitive, liquid and very efficient. From that premise, some markets are easier to trade than those I just mentioned. They would also be less competitive, less liquid and less efficient.

Which are those? Stocks?

The statement makes sense assuming a longer holding period, but for day trading purposes, I`m not sure if I`m following along here. If anything, liquidity and a tight spread is extremely important for a day trader.

The question is strictly about day trading.

Thanks in advance,

Laissez Faire
 
Every trader’s appetite for volatility is different, as is their ability to function within that volatility

You can find everything from dead….. to hold on to yer ass - in terms of volatility

Volatility is risk – how much is enough….

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Another aspect is control / ability to control (think gamesmanship) – more volume, less “gamesmanship” that can be induced


Illiquid markets are harder to trade because, depending on the size you’re trading – you may be the whole / majority of the market, for that day

Again, depending on your size, exiting could also get real costly if not done with proper planning....


That said; some around here do thrive in less liquid instruments


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It all about your style/ approach/ risk appetite/ temperament/ patience/ ability to perform

RN
 
Quote from Laissez Faire:

Hello traders,

I`ve heard it said time and again that you should not trade a certain market, be it the ES or FX, because those markets are ultra-competitive, liquid and very efficient. From that premise, some markets are easier to trade than those I just mentioned. They would also be less competitive, less liquid and less efficient.

Which are those? Stocks?

The statement makes sense assuming a longer holding period, but for day trading purposes, I`m not sure if I`m following along here. If anything, liquidity and a tight spread is extremely important for a day trader.

The question is strictly about day trading.

Thanks in advance,

Laissez Faire
More...

I think if you're a nervous trader who can't stand to sit through price wiggles and normal retracements, and likes to snare quick small profits, then volatile instruments like energy futures, currency futures, and high priced momentum stocks (AAPL, AMZN, NFLX, FSLR, PCLN, etc) will give you more instant gratification, because they have serious intertia once they get a move on.

If you have a lot of trading experience, are highly disciplined and relaxed, and are able to hold a trade for stop or target, come hell or high water, then you can trade absolutely anything, including "efficient" back-and-fill instruments such as ES.
 
Trading of scrips with poor liquidity is very tough.example cash scrips on XETRA(germany)
Quote from Laissez Faire:

Hello traders,

I`ve heard it said time and again that you should not trade a certain market, be it the ES or FX, because those markets are ultra-competitive, liquid and very efficient.,

Laissez Faire
More...
 
Quote from NoDoji:

I think if you're a nervous trader who can't stand to sit through price wiggles and normal retracements, and likes to snare quick small profits, then volatile instruments like energy futures, currency futures, and high priced momentum stocks (AAPL, AMZN, NFLX, FSLR, PCLN, etc) will give you more instant gratification, because they have serious intertia once they get a move on.

If you have a lot of trading experience, are highly disciplined and relaxed, and are able to hold a trade for stop or target, come hell or high water, then you can trade absolutely anything, including "efficient" back-and-fill instruments such as ES.
More...

I`m afraid I belong to that first group. Maybe I`m trading the wrong instrument :(

I was initially interested in trading CL, but chose ES due to my schedule.

Both currencies and CL seems to go to sleep by the time I start to trade. At least that was the conclusion I made when I first made the decision.

The big moves are usually over in the ES as well by the time I`m seated, but due to the nature of the stock market, there seems to be consistently a little more action going into the close compared to CL/6E.

I`m starting to wonder whether trading the afternoon is a losing strategy from the beginning. Maybe my time would be better spent working longer hours in my current day job, saving money and swing trading currencies, until I have enough money that I can actually quit my job and focus 100% on daytrading full-time/part-time.

Going off-topic now....:)

Just thinking out loud.

Best regards,

LF
 
Certain markets are easier to trade than others, and require different strategies. If a market has no volume, it's worthless. But otherwise, if there's anyone doing business, smaller markets tend to be easier to trade - the spread's bigger, so when you capture it you make more. They move slower, so there's more time for analysis. All in all, it's just easier.

An example of a good learning market right now would be Dec. Wheat. It trades >5K contracts most days, so there's plenty of people to hit your orders. The spreads are frequently bigger than a tick. Major moves take 20-30 minutes, so there's time to think.
 
Sure there are big differences.

There will be hardly any index, commodity or currency pair that ever shows a chart as smooth as the one attached.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=3139355>
 

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I`m starting to wonder whether trading the afternoon is a losing strategy from the beginning. Maybe my time would be better spent working longer hours in my current day job, saving money and swing trading currencies, until I have enough money that I can actually quit my job and focus 100% on daytrading full-time/part-time.
More...

IMO there are 3 'days' within 1 'day' of trading - AM session, lunch, PM session. Each of those are a day within a day - meaning they can act on their own even though it's still the same calendar day.

Example: CL trades nicely 8am EST to about 1130am-12pm EST. Then it can just die of any volatility into lunch or it may continue the moves from the morning. After 1pm into the pit close of 230pm can also be a decent time to trade.

But if you are only looking at the CL during lunch or PM hours, I think you are missing the biggest moves - and easiest depending on your trading style. If I was forced to trade 1 of those sessions, it's the AM session w/o hesitation. If you take away the AM session as an option to trade, I'm not sure I'd want to trade the CL at all then.
 
Quote from uexkuell:

Sure there are big differences.

There will be hardly any index, commodity or currency pair that ever shows a chart as smooth as the one attached.
More...

I disagree.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=3139407>
 

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