Day Trading ES future vs. stocks
- Thread starter lokkeilaw
- Start date
Absolutely, but it all depends what you are doing now. If you are strictly trading off a LII screen, for example, you may find scalping ES a bit different, even though you can get DOM data, its not quite the same.
If you use typical TA indicators, trendlines, volume, etc, its exactly the same. Stick with what works for you.
There are thousands of valid trading approaches, its the mental part thats tough.
You will be happy to be rid of the MM's and specialists as well.
Jay
Quote from lolo24ca:
it's harder than trading stock..you need to be extremely discipline when trading them. I studied them for a year and a half before trading them. I'm glad i did cause so far i'm very profitable. a good book for that wouldbe "mastering futures trading" by Bo yoder. Vheck it out
Wow, it would take this long. It took me 1/2 yr to become profitable for stocks. Thanks for the recommendation, I will definitely check it out.
I used to daytrade stocks, now I daytrade the ES. The setups I used for stocks do not work with the ES at all. My trading approach had to change drastically.
There are some real benefits to futures for sure, however there are some real dangers for those new to the game. I feel an especially dangerous trap to fall into is trying to use the same setups, etc that worked in stocks. That can often lead to quick disaster.
If you are currently using the ES as a leading indicator, I would suggest that before you switch from stocks, spend some additional focus time on how the ES moves and trades in certain situations, times of the day, etc. Try to develop an approach, then paper trade it either live or on a simulator. Maybe spend a small portion of the day just focusing only on the emini chart to see how it is trading, stuff like that. Just become intimate with it. See if you really like spending that much attention on one thing, or do you get bored and wish you were playing in lots of things. And what I think is the most important advice, once you switch, go small..1 contract only.
As discussed in this thread: http://elitetrader.com/vb/showthread.php?s=&threadid=30805
the ES has some serious competion in it, you need to be very comfortable with it or you can get slammed.
I wish I would have done more of what I suggest above, because when I switched I was cocky and took a hit. And note - A hit in futures can be a real hit, your money management needs to change for it as well, and failure to do so is also a trap many fall into. Leverage kills!
All that said, once I took a few beatings and learned some lessons and became realistic about position sizing, I found that I am much more consistent with the ES than I was in stocks. I still take some beatings...last Friday being a good example, but ultimately my P/L is better and I like it much better. The learning never ends...
Hope it helps,
Dodger
There are some real benefits to futures for sure, however there are some real dangers for those new to the game. I feel an especially dangerous trap to fall into is trying to use the same setups, etc that worked in stocks. That can often lead to quick disaster.
If you are currently using the ES as a leading indicator, I would suggest that before you switch from stocks, spend some additional focus time on how the ES moves and trades in certain situations, times of the day, etc. Try to develop an approach, then paper trade it either live or on a simulator. Maybe spend a small portion of the day just focusing only on the emini chart to see how it is trading, stuff like that. Just become intimate with it. See if you really like spending that much attention on one thing, or do you get bored and wish you were playing in lots of things. And what I think is the most important advice, once you switch, go small..1 contract only.
As discussed in this thread: http://elitetrader.com/vb/showthread.php?s=&threadid=30805
the ES has some serious competion in it, you need to be very comfortable with it or you can get slammed.
I wish I would have done more of what I suggest above, because when I switched I was cocky and took a hit. And note - A hit in futures can be a real hit, your money management needs to change for it as well, and failure to do so is also a trap many fall into. Leverage kills!
All that said, once I took a few beatings and learned some lessons and became realistic about position sizing, I found that I am much more consistent with the ES than I was in stocks. I still take some beatings...last Friday being a good example, but ultimately my P/L is better and I like it much better. The learning never ends...
Hope it helps,
Dodger
Thank you ArtfulDoger, the link you sent on the reply
"http://elitetrader.com/vb/showthrea...&threadid=30805"
is excellent. Althought it talked about how tough it is to trade the S/P 500 future, it also give hints on how to battle the tough guys in the market. I am going to try a contract and use a 2 tick rule for my stop loss.
"http://elitetrader.com/vb/showthrea...&threadid=30805"
is excellent. Althought it talked about how tough it is to trade the S/P 500 future, it also give hints on how to battle the tough guys in the market. I am going to try a contract and use a 2 tick rule for my stop loss.
Just want to reiterate the points others have made re: patterns that work in stocks don't work in futures. They are just traps in intraday futures. For me futures is about elasticity and ranges, although I do track 3-5 day accumulation distribution cycles.
Beware of overtrading when switching from trading multiple stocks to watching maybe just one index. If you stare at one index too much you can start to see things that aren't there. My strategy in futures is to look for opportunities across 6 markets. Would be more if I were in US/EU timezone.
I would reccomend some books on futures trading by people who have actually done it e.g Fisher, Dalton, Crabel, Angell (controversial as he may be). If for no other reason than you will see that the emphasis is on ranges and elasticity more than it is on patterns. One of the best futures traders I know is a disaster in stocks.
Beware of overtrading when switching from trading multiple stocks to watching maybe just one index. If you stare at one index too much you can start to see things that aren't there. My strategy in futures is to look for opportunities across 6 markets. Would be more if I were in US/EU timezone.
I would reccomend some books on futures trading by people who have actually done it e.g Fisher, Dalton, Crabel, Angell (controversial as he may be). If for no other reason than you will see that the emphasis is on ranges and elasticity more than it is on patterns. One of the best futures traders I know is a disaster in stocks.