Differences in profits in lowly-leveraged day-trading futures vs ETF equivalents

Yes, just the close price is used in moving averages. Nothing else. Even the component of the system that tries to keep me out of whiplash days is based on the close price.

Yes, ~ $136 combined.

So, what are your conclusions so far? Imagine you had 354K to trade either 1 NQ (no leverage) or ~ 823 QQQ that that capital can trade. Which one would yield more PnL ($) assuming that the strategies are almost identical in terms of % equity curve, and tax and leverage don't matter?
 
pers said:
Which one would yield more PnL ($)
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Profit would be nearly the same but why would you compare them in that way?

A 1% move would have profit of ~$3,548 for NQ and ~$3,544 for QQQ (NO commissions for either)(1NQ vs. 823QQQ).
Your NQ can be traded for less than $5K (or even $500 at some brokers for daytrading) while your QQQ would be $354K without using margin.

Your NQ account could have the $350K+ put in a MM account at 5% ($17,500/year) so a big advantage over QQQ.
If you're a profitable daytrader, NQ is the clear winner from a PnL perspective with regards to dollars invested.
 
https://www.elitetrader.com/et/thre...re-than-3x-the-qqq.372454/page-2#post-5758154

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No doubt about the exceptional capital efficiency of futures. But to have a fair comparison of $ PnL, we need to factor out risk, which is mostly leverage in day-term trading. For example, in your example above, the $12660 profit is truly impressive compared to $790 but if Nasdaq dropped by just 2.2% two successive days (not unrealistic at all), you will be completely wiped out and may never get a chance to recover. I know you can recapitalize the account but there will be some emotional pain and headache involved. I guess unless you have an automated system in place that constantly checks the account leverage and adds money to keep the leverage constant, but I do not have that system in place.

With the QQQ account, this scenario never happens. This difference in risk is not something we can neglect. So, we gotta factor out leverage.
 
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pers said:
No doubt about the exceptional capital efficiency of futures. But to have a fair comparison of $ PnL, we need to factor out risk, which is mostly leverage in day-term trading. For example, in your example above, the $12660 profit is truly impressive compared to $790 but if Nasdaq dropped by just 2.2% two successive days (not unrealistic at all), you will be completely wiped out and may never get a chance to recover. I know you can recapitalize the account but there will be some emotional pain and headache involved. I guess unless you have an automated system in place that constantly checks the account leverage and adds money to keep the leverage constant, but I do not have that system in place.

With the QQQ account, this scenario never happens. This difference in risk is not something we can neglect. So, we gotta factor out leverage.
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THAT+ QQQ pays dividends but lets dont even count that @ this time .
About52 weeks ago, more or less SCHW charges no interest on t+2 trades on ETFs .[Edit clears the same day no interest]
Max leverage insures max loss on the wrong side;
use Roth so taxes are no problem.
REALLY even something like TQQQ or QLD or even using QQQ alone;
may not beat SPY or SPY + QQQ combo.
Slightly off topic,[ but NOT much]because its the same problem-same principle;
a low interest mortgage, say 30 years + keep it\ but invest the difference ; could be super risk-stupid risk if [accidently] foreclosed on.
ETFs NEVER require margin, maintaince margin ;
even though TQQQ could be a real profit killer if used wrong\ almost bad a futs
 
Can you run your system in something like Ameritrade? I trade futures in my retirement accounts with them and it is only a 25% increase to margin. If so, it may be worth transfering say 30K to Ameritrade and keeping the other 70k in your other account. Just an idea. I just think you are going to get hit with capital issues due to the settlement problem. Just a thought.
 
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