e-mini trading strategies

Tharp: If Don Bright is willing to give us insights related to E-Mini trading on an E-Mini related thread, then I think we should encourage that.

(IMO, ET could do with a bit less thought policing, and more encouragement of those willing to share their expertise. The most off-topic comments on ET threads are often by those trying to police them!)
 
Originally posted by dkamp
Thanks Don.

So essentially the brokerage is able to take money both from other traders (buying S&Ps low) and from the institution (selling stock high), due to the fact that it is able to anticipate the rise and fall in prices. Why doesn't the institution object to this and do its own buying? Does the institution partake in the brokerage's profits? Thanks again.
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We have been asking that same question for 2 decades, and the answer is simply that the "fund managers" don't care. Why do they pay 6cents/share, why do they not hire a floor trader to effect trades for them? They are often times being rewarded in "soft dollars" and/or have developed "relationships" with brokerages. They are usually the worst traders in the world, they are simply moving money around trying to beat the S&P 500 return (90+% don't)...and that is why mutual funds are a stupid investment.

(apologies to Mr. Tharp about posting here, but I think it better to understand the market if you're going to trade any futures contracts...we can move it somewhere else)...

Understanding the "real game" of Wall Street is both a blessing and a curse, but not knowing how the game is played is disaster.
 
I think it should be mentioned to those discouraged by Dons' comments, the other side of the coin is, being small and being able to get in and out of a few contracts positions in a heartbeat is a major advantage over institutions. (same for equities)
 
Right. Also, I'm not exactly sure what was supposed to be discouraging about Don's comments, since it seems that the brokerages would just be creating 2-3 times as much price movement (up and down) as what would occur if the fund managers acted alone. Moreover, the fund manager is still reacting within the context of some larger trend (since they're not just flipping coins), so you can either try to catch that larger trend or just try to "be there" when the smaller moves occur. Perhaps Don can explain what's futile about such approaches relative to what the brokerages are doing (as relates to index futures trading).
 
Originally posted by dkamp
Right. Also, I'm not exactly sure what was supposed to be discouraging about Don's comments, since it seems that the brokerages would just be creating 2-3 times as much price movement (up and down) as what would occur if the fund managers acted alone. Moreover, the fund manager is still reacting within the context of some larger trend (since they're not just flipping coins), so you can either try to catch that larger trend or just try to "be there" when the smaller moves occur. Perhaps Don can explain what's futile about such approaches relative to what the brokerages are doing (as relates to index futures trading).
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I was not trying to be discouraging at all, I was simply giving information that I feel that all traders need. Having an understanding of the overall markets is primary to trading any instrument. You are correct in that this trading by institutions is great for us, as long as we recognize it and act upon it.
 
Ok from the looks of this thread most people seem to agree that trading the emini NQ/ES is a losing proposition bc of the lack of good leading indicators. Now this may be the case for pure intraday plays ... I was thinking maybe 2-3 day swinging might be a possibility as a lot of the great commodity traders seem to work more on the bigger time frames...
 
Don:

"Understanding the "real game" of Wall Street is both a blessing and a curse, but not knowing how the game is played is disaster."

I fully agree. Not doing so is giving up any opportunity to find an edge. I do have one further question though, the situation you describe seems to be mainly using the futures for their arbritrage function... what about speculation activity? I would think that with all that trading activity day in and out that some of it must serve other purposes other than arbritrage ... bear with me I'm still coming to terms with this 'game'.:(
 
First of all, I would like to thank Don for his comments. Some of you guys are too willing to jump down his throat. Everything he has said is true, and no I don't work for him. I do trade, and have been involved in the financial industry (starting with F/X with a big brokerage house) and believe it or not futures are a very tough game to play. I'm not sure why that is so difficult to believe, but it's true. Look at it this way. The best traders in the world trade futures, as well as millions of dollars worth of high-tech computers. These are the other players you're trying to take money away from. With equities, and I'm sure you've all seen this, but there are newbies who don't have a clue as to what they are doing, and you can take their money easier than the top players. Plus, as futures lead, and as more people trade them, they are more "efficient" in that price is more reflective of the true level of the underlying asset, while equities do lag a bit. Again, another benefit to trade equities.

But do whatever you want, just don't try and convince some junior trader to trade the futures because it's easier to make money than equities.

cheers
Canuck
 
Originally posted by Don Bright


If you look at the last 90 days, the "sentiment" was totally bearish, and the market rebounded in a full bull fashion.

IMO
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Don markets move in the direction that will hurt the highest # of participants... If everybody was "totally" bearish than it would have no choice but to rebound sharply...

And Don as for the futures not being tradeable, futures ARE MOVED, they don't just move of themselves so... you can always find an edge in a market that is moved, because human nature never really changes... sure there are no guarantees that they will act in one fashion over the other, but humans can be pretty predictable creatures most of the time... any market THAT IS moved can be traded...IMHO of course :)

PEACE and good trading,
Commisso
 
For those of us who don't need to join the specialist's bid or offer a thousand times a day, in hopes of picking up a nickel then futures are the cleanest, most liquid, cheapest way to trade. I think I speak for Commisso and many others on this board in saying that our intuition, and grasp of sentiment and how it effects re-pricing allows us to plan our OWN trades and IMHO that's an edge I wouldn't trade with anyone.
 
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