do not trade index futres.

[tsfx]

The cost of trading is small for a reason.

And what reason is that?

Stock indices easier compared to what exactly?

FX, commodities for example.

In theory, the easiest market would be very directional going from A to B in a linear fashion with zero noise. In practice, stock index futures are very different from that and generally are very complex instruments by design.

Look at monthly chart of SPX and show me another instrument in another asset class that has trended like that.

Stock indexes are the only asset class that has a fundamental reason to rise forever due to the simple fact that people go to work everyday to generate profits for a company listed in an index. So a stock price can't be flat forever can it, otherwise that company would be free at some point. And i doubt a whole index will go bankrupt

So, what makes it easier in stock indexes is the fact that you can ONLY take long signals whereas you can't do that in other assets. Isn't that a statistical edge in your book? Or you have a better instrument in mind?

I guess you all are referring to 1min charts and daytrading only. Even though OP didn't specifically mention short TF's.

 

[Handle123]

Been day trading/scalping since 1987, have traded most of futures, some forex, stocks etc...

Indexes trade differently than most other futures, different charting, different patterns, different trends or lack of consistent trends.

Once learned, Indexes offer more bang for the buck, more movement for scalping during certain hours. Many never understand what needs to happen to profit. When newbie, trades that go against internal feelings are often trades am going to get into, waiting for price to drop to go long, risk gets smaller. Very seldom do breakouts as they require greatest risk. I pretty much fade moves within a trend.. Seldom do traders study distances of waves of a trend, too often newer traders getting in late in current trend. Use larger timeframe for trend and enter on smaller. Increased volume or lack is hugely important once learned.

Once you have edge in one market, most likely there be differences in other markets.

 

[CALLumbus]

On the larger time frames, 5m and above, everything looks pretty much the same for me. Give me a 5m or 1h chart, and I could probably not tell if it is CL or GC or NQ.

But on the smaller time scale, sub 5m or especially if you switch to the tick chart level, there is so much action in ES and NQ, nothing can beat it.

There are more opportunities in the first 15 minutes RTH in NQ than in the whole day of ZN, at least from a chart trader perspective.

Thats why I love ES and especially NQ, and why I focus pretty much 100% on these. So much action in such a short time. Trade the first 60 minutes of the day and be done, go have fun.

 

[heispark]

https://www.elitetrader.com/et/thre...-7-million-in-record-spoofing-penalty.337633/

 

[Laissez Faire]

And what reason is that?

Market efficiency / competition.

I guess you all are referring to 1min charts and daytrading only. Even though OP didn't specifically mention short TF's.

Short term day trading, yes. Medium/long term is different and I imagine most people would prefer other vehicles than stock index futures for such strategies.

 

[tsfx]

Market efficiency / competition.

Competition is high perhaps because it's easier to make money there?

Short term day trading, yes. Medium/long term is different and I imagine most people would prefer other vehicles than stock index futures for such strategies.

Regardless, i'm still sticking to my statement that spreads/slippage/liquidity in volatility adjusted environment gives a clear statistical edge trading SP500. The more you trade (daytrade) the more you save. If you're not seeing that...well, let's just agree to disagree.

 

[Laissez Faire]

Competition is high perhaps because it's easier to make money there?

I'm not sure you quite understand what's meant by being a competitive market.

In a market such as ES which there are hundreds if not thousands of strategies (manual and algorithmic both) being employed simultaneously with trading decisions being made for a wide variety of reasons/triggers/signals. This, partially explains why liquid index futures move the way they do with plenty of 'noisy' movement.

For example, you'll have arbitrage players/algorithms working simultaneously with mean reversion algorithms or trend following algorithms where a mean reversion algorithm will sell a pop and a trending algorithm / BO algorithm may buy it. There's always a tug of war between buyers and sellers.

And this is with no mention of hedging activity (which is the reason these markets exist to begin with) where a hedger may dump a larger buy/sell order at market in any given moment at a price they deem favorable. This was also what happened during the Flash Crash.

All this makes for a complex market where only the few are making any money consistently.

Regardless, i'm still sticking to my statement that spreads/slippage/liquidity in volatility adjusted environment gives a clear statistical edge trading SP500. The more you trade (daytrade) the more you save. If you're not seeing that...well, let's just agree to disagree.

Care to share your performance summary trading index futures?

The low cost is great if you know how to trade. If you don't, it won't help you anyway.

 

[padutrader]

FX is the worst.

spot fx yes
but fx futures in cme is the same as ES as far as cost and commission

 

[padutrader]

plenty of 'noisy'

that is exactly my point.
if you think noise is the real thing you can really have hell

 

[padutrader]

Wrong. You have a statistical advantage when trading SP500 index over FX, commodities or bonds due to lower costs (spreads, slippage, volatility adjusted). All other things being equal, you lose less with SP500.

You are talking about creating a successful strategy. That's a whole different topic. Creating a successful strategy is just as hard with any instrument. It's definitely not harder with stock indexes. It's easier actually.

which is noisier?
i think indexes.

indexes are supposed to be easier but my experience ES whipsaws more often than it trends.
my observation purely