Does anyone "spread" daytrade the ES vs. NQ or YM vs. NQ etc.?
- Thread starter increasenow
- Start date
1. There are certainly "better behaved" equity index spread combinations out there than ES vs. YM or ES vs. NQ. In terms of YM, you are actually better off spreading that against the mini Russell 2000 index ( TF ) IMHO.
2. Why not swing trade these instead of day trading them ? Slippage and commissions would indeed be an issue if you are trying to bank two tics on a spread position. The clients that I have who are higher frequency types lease seats for the member rates.
2. Why not swing trade these instead of day trading them ? Slippage and commissions would indeed be an issue if you are trying to bank two tics on a spread position. The clients that I have who are higher frequency types lease seats for the member rates.
Ive had some good luck with the Dow/Russell using the etfs for an extended holding period.
Even with member rates is there enough juice in the index spreads to justify scalping them for a few tics? Seems like scalping 2 index futures simultaneously would be the only thing on earth more irritating than scalping 1. Thats gotta be a crowded trade.
That is why I would recommend longer holding periods. When a trader butchers a proper spread trade by breaking the legs down into individual scalping exercises all sorts of bad things happen. It is no longer a spread trade - it is bad scalping multiplied by four ( for a two legged spread or pair ). You should be able to hit a bid and lift an offer to get out and still have plenty of meat left on the bone as it were - I usually split the difference and be done with it when I am manually legging spreads. In other words, if I get hit on the bid on one leg I will usually hit the bid on the other leg pronto. Squeezing legs is stupidity with chippy moving markets like an equity index future during NY daytime trading hours. And from my experience, alot of the "badmouthing" and negativity I hear about scalpers trying their hands at spread trading usually is rooted in really bad execution practice and trying to take too little out of the trade and holding it for too short a time period.
You should be able to take nice chunks out of an equity index spread trade - even intraday.
the reason why es vs ym is good for a beginner is it gives you a micro es. Most beginners underestimate how much capital it takes to trade just 1 es. So, they daytrade with tight stops until all their money is gone.
with the spread you can hold overnight and see what it would be like to be a big trader with lot's of money.
as far as making money, it is difficult, unless you have an idea about a particular dow 30 stock. Mean reversion is dangerous, especially if you start averaging down (although with the spread it is an option.)
but like I said, after you hold a day or two (or even weeks) and survive a big move, you will probably give up the idea of trading 1 es and being forced to get flat on the close regardless of what the market did that particular day.
with the spread you can hold overnight and see what it would be like to be a big trader with lot's of money.
as far as making money, it is difficult, unless you have an idea about a particular dow 30 stock. Mean reversion is dangerous, especially if you start averaging down (although with the spread it is an option.)
but like I said, after you hold a day or two (or even weeks) and survive a big move, you will probably give up the idea of trading 1 es and being forced to get flat on the close regardless of what the market did that particular day.