Daytrading E-minis

reg · May 31, 2003

Is anyone actually making a living daytrading the e-minis? I ask this question because all the successful traders I have come across all trade equities and only use the futures as a leading indicator in their stock trading. Therefore, what edge do you have in trading the leading indicator itself?
I understand about the liquidity, no uptick rule, fast fill advantages in e-mini trading, but how does one anticipate its moves without the benefit of a leading vehicle?
So back to my original question - is anyone ACTUALLY making a living daytrading the e-minis?
Any feedback appreciated. Thanks.

CharlesTrader · May 31, 2003

Yes, there are those who make a living trading the indices. Most of those who are successful, were first successful equity traders.

All trading is based on a perception of the future, no matter if the future is 5- min or 1 year. The indices can be used as a leading indicator for equities, but it isn't always a leading indicator. For example, if the futures are overvalued relative to the underlying stocks, i.e. the premium of the futures to equities is much higher than the historical average, hedge funds may start selling the futures and start buying the underlying stocks to get the premium between the two back to historical average values. So, it is possible for the equity market to go up in value while the futures go down in value and vice versa. So, always using the futures as a leading indicator for equities can be misleading and costly if you are not also paying attention to the premium between the two.

So what leads the index futures? Perception of the future state of the economy. This can be economic indicators, political policy changes and so on. Is the value of the economy going to be higher or lower than what it is now? Guess correctly, and you will make money. Guess incorrectly, and you will lose. The trick is to use the right tools to help you keep probability on your side. It really does not matter what market you choose to trade. However, whatever market you choose, you must take the time to learn all the ins and outs of that particular market so that you can make the best choices of when to go long or short.

Charles

Ditch · May 31, 2003

Quote from CharlesTrader:

So what leads the index futures? Perception of the future state of the economy. This can be economic indicators, political policy changes and so on. Is the value of the economy going to be higher or lower than what it is now? Guess correctly, and you will make money. Guess incorrectly, and you will lose.
Charles

This is the biggest nonsense i've read in a long time.

Ditch · May 31, 2003

Quote from Ditch:

This is the biggest nonsense i've read in a long time.

To clarify this, i think market behavior can be best understood by comparing it to a bunch of lunatics, who just escaped from an asylum, and right now find themselves lost in the middle of the night in an unkown metropole. You never know how they're gonna react, where they're going to or what they are going to do. Just try fo follow them as best as you can. That's my advice on trading e-mini's, disregard news, just focus on the market moves itself. Only thing you have to know about economic data is at what time it will be released. The market's reaction to it is completely unpredictable for any sane person. Not to mention political developments.

Banjo · May 31, 2003

Ditch has a handle on it. The minis are a vehicle used for arbing, hedging and pure speculation. There is no way to know what's in the minds of the various players, anyone of which may be the dominant force of the moment. I can't imagine being consistantly successfull with them without well developed T.A. skills. I think there is more pure speculation in them by large players than is generally believed. All in all a dangerous game for some one employing the logic af an equities trader. That said , if you've been in the mkts long enough to have aquired the proper disdain for them, i.e. the sell side are wolves in sheeps clothing and the buy side are P.T.Barnum's suckers and only believe what is in front of your face you may be battle hardened enough to function in an entirely unemotional mode and capture some inertia on whatever time frame you operate in.

uptik2000 · May 31, 2003

I agree with Ditch. One of the best things I've done in the past year to improve my trading was to turn the television off during RTH.
As far as success with mini's, I love 'em. Maybe they do lead stocks , but the liquidity/non-slipage makes up for the few seconds in lead time. Same patterns, same indicators. Go with the flow.

Happy Trading.

Kermit · May 31, 2003

Quote from reg:

...Therefore, what edge do you have in trading the leading indicator itself?
I understand about the liquidity, no uptick rule, fast fill advantages in e-mini trading, but how does one anticipate its moves without the benefit of a leading vehicle?
....

By consistently trading all your low risk, high probability setups (your edge here), keeping losses small and manageable when the trade doesnât work out and extending your profits when the trade does work out. The E-mini markets are going to do what they're going to do anyway, leading vehicle or not.

Kermit

jack hershey · Jun 1, 2003

Quote from reg:

Is anyone actually making a living daytrading the e-minis? I ask this question because all the successful traders I have come across all trade equities and only use the futures as a leading indicator in their stock trading. Therefore, what edge do you have in trading the leading indicator itself?
I understand about the liquidity, no uptick rule, fast fill advantages in e-mini trading, but how does one anticipate its moves without the benefit of a leading vehicle?
So back to my original question - is anyone ACTUALLY making a living daytrading the e-minis?
Any feedback appreciated. Thanks.

You need to consider reasoning through your questions.

Try to define the ES mini market. Look also at it's size. Once you consider all the looney's who post here by whining, you can conclude that they are easy marks for others continually and they are replaced periodically (see the date of their first posts).

Successful traders do not depend on edges as edges are defined here. The process of taking money out of the ES mini market is a more a methodical steady yield one that improves stage by stage.

There is little reason to not use leading "vehicle (s)" when working the ES mini market on a intraday or interday basis. You can do it quickly or slowly using leading indicators.

Try to reason through your questions. There are no alternative answers to them and the answers are self evident.

Good luck to you. It is not needed but it makes looking at stuff more pleasant as you move on down the road to being rich.

NasdaqTrader · Jun 1, 2003

To anyone who is daytrading ES and NQ,how difficult is it to consistently make at least 2 ES points a day($100 total profit/contract)?Also,what are the daytrading margin requirements for ES and NQ?

BobbyMurcerFan · Jun 1, 2003

Margin requirements are determined by your broker, so get a complete description from them. As for how hard it is to get 2 points a day out, I'm not doing that, but I'm sure there are many who are or quite a bit better. It all depends how good you are.