Emini NQ Average Ranges

[profitseer]

right 777, I agree. The way it is now, it sounds like one thing, but it looks like another.

 

[Pabst]

Originally posted by Bob777
All you have to do is look at the performance bond(margin) for the NQ to see that the range is getting to untradeable levels for trend traders. A few years ago the performance bond was $9400 and now it's $2200 for the NQ. I had a trend system that I was using and had to stop trading it because the range is gone. You would get whipsawed from time to time but you knew you would catch at least one 20-35 point move before the day was over. Not any more.

The Dow contract is not the answer though. In my opinion the Dow contract has design flaws from the start. One reason the CME emini's are popular is because the spread on the contracts are only 1 tick, which is $12.50 for the ES and $10 for the NQ, and the prices move sequentially. But with the YM contract, the spread is 3-10 ticks, and change constantly. This makes the YM harder to trade using limit and stop orders. I don't care how many contracts the YM eventually trades, I doubt the spread will ever get to only 1 tick(1 Dow point).

What the CBOT should have done is design the contract so the spread would be 1 tick and the prices move sequentially. They should have made each point equal to $2 but the minimum tick would be 5 Dow points. That would make each tick worth $10. The price would move in 5 point increments, and only in round numbers of 5. For example, the bid would be 8430 and ask 8435. If the contract is moving up it would be 8435/8440 then 8440/8445 then 8445/8450, etc. This would be a lot better than the spread constantly bouncing around like a pogo stick.

If the CBOT would have only 1 emini contract (instead of the current 3) and designed it after my example, I'll bet it would be one of the most traded contract in the world.

I'm not trying to be harsh just because you're beating me in Et FFL today. But I do disagree with both points in your post. Volatility on a pct. basis in the NQ is no lower than it was a year or two ago. In fact a 2 week move of 800 to 1000 is analogous to a move of 4k to 5k. Of course absolute volatility is lower and the lower margins reflect that. Sotrade bigger! The margin decreases have also kept pace with the lower ATR. Granted, commissions are eating us all up, but from a trading standpoint, and from an R/R standpoint things are the same..

As far as your criticisms of the Dow contract, you're off base as well. For starters the 2x contract will be eliminated in Dec. leaving just 2 versions of the Dow, the pit traded 10x, and the electronic 5x. How does widening the tick incrementjive with your statement that index volatility is contracting? Do customers really want to be forced into paying arbs a higher spread for liquidity. Keep in mind that 5 ticks in the Dow would be about .50 ES. How is that acceptable as a minimum spread? On an 80pt range day in the Dow, does one want to be compelled to give up a nickel to get in. Conversely to what you think, widening the "tick" makes it more difficult, not easier to become filled on a limit order. No, the Dow is not, nor ever, will be a "great" contract. No index with 30 price weighted stocks can compete with 500 cap weighted stocks, in terms of liquidity or institutional interest. But your suggestions would only make it worse.

 

[naztrader]

Brandon was charging $200/mo to trade the NQ for those who can't push buttons and want him to be their holy grail for trading, while disguising it as their "broker assisted" plays.

Is it any surprise that since the NQ's range has tightened, he's out here hyping the Dow mini now.

I'm eagerly anticipating Dow mini "broker assisted" trading from those good folks from Main Street, and an even smarter (assed) reply from Mr. "5k Suit" that attracts all those hot strippers.

 

[Brandonf]

Given that 2/3 of your posts on this board are pissing and moaning about something, but I have not yet seen something that would help most people I don't want to spend too much time with you. I spent a bit of time reading various posts on the site that have been made over the last several weeks, and overall the posts seem to have again taken a turn towards bitterness and bitchyness. It's probably time to step back for awhile and focus on something that does not have so much negative energy. However, in case there is some confussion I will make a few points before I take some "vacation" from ET.



<i>I have found that traders can easily trade 5 to 10 contracts, so though you really can not trade huge size, you can still make a decent living in the DOW because of its volatility. </i>

I doubt it would be economically viable at this time to do a broker assited trading program given that you can't do a lot of size in the YM yet. Still, the DOW is viable for an individual trader.

<i>Overall then a careful analysis suggests that traders who primarily transact in the NQ and or the QQQ would be well advised, as a general rule, to look towards other markets to meet their goals. Obviously there are specific cases were this is not the case, but as a general rule there is starting to be more risk then potential for benefit in the NQ for a daytrader. </i>

Maybe given that Im a guru who feeds off of all you good folks I can not interperate my own thoughts as well as you can, I dunno, but I don't read this as saying people should not trade the NQ, rather that those who primarily trade it might want to start looking to other contracts, I mentioned the S&P500 and the DOW. Those who are night owls might also want to look at the Eurostoxx, CAC or FTSE.


Brandon

 

[Tradewinds]

I never had a $5k suit!

WOW

I'm not a night owl, just trying to break up the tension here!

 

[naztrader]

I never had a $5k suit either, but I did take 3rd grade spelling.

I'm glad he stooped low enough to do a search on my posts, LOL.

 

[sussex]

{Perhaps this explains more!}

On Wednesday, Oct 30th at 4:30 pm ET Brandon Fredrickson and Toni Hansen will be giving a class in conjunction with the Chicago Board of Trade. The class will cover the practical aspects of daytrading, specifically daytrading the CBOT's mini-sized Dow Futures Contract.

Representatives of the Chicago Board of Trade will lead off with a discussion on the specifics of the contract such as liquidity, margin and the value of any given move. Next Toni Hansen will give a presentation on basic trend identification. This will set up the presentation Brandon Fredrickson will discuss a specific methodology that is profitable on nearly 70% of its entries on Indexes, including the CBOT's mini-sized Dow Contract.

 

[josbarr]

http://www.newsday.com/business/

scroll down to "In the Exchange Pitts"

 

[Quah]

Originally posted by sussex
.... This will set up the presentation Brandon Fredrickson will discuss a specific methodology that is profitable on nearly 70% of its entries on Indexes, including the CBOT's mini-sized Dow Contract.

How can something be profitable on entry?

 

[daniel_m]

Granted, commissions are eating us all up, but from a trading standpoint, and from an R/R standpoint things are the same

hehe, "from an RR standpoint" makes the commissions point sound like an interesting but irrelevant sidepoint... when it's a huge part of the equation..meaning things are most certainly NOT the same...
screw the %ranges.. give me absolute volatility any day of the week! those 1 lot trades go a lot further that way...
let the market do the legwork, not your size..
but, back to reality...

No, the Dow is not, nor ever, will be a "great" contract. No index with 30 price weighted stocks can compete with 500 cap weighted stocks, in terms of liquidity or institutional interest.

that's a bold statement there Pabst...

i'm not sure whether or not the dow will ever be a great contract... but it's already got a bit going for it...it's high point level (even if we continue to sell off) of say 7000-10000 means even a small %volatility move equals decent absolute range.. a half decent (barely) multiplier (make the a/c/e contract $10!!!).. and a solid growth in volume since its inception... (and btw, 20k/day, while peanuts to ES and ZN, is still one of the more actively traded futures contracts in the world..).. so if it can continue to the point where it's doing 100k/day...it would certainly have the makings of a "great contract"..

as to the 30stocks comment... well, just take a look across the atlantic where the Dax30 is doing 100k/day, 25EUR multiplier.. and the eurostox50 700k/day 10EUR multiplier (and 50-150pt daily range)..

and actually, not that i have much idea about this stuff, wouldn't a 30 stock contract make it simpler to buy and sell baskets of stocks against, since that basket could easily be the entire 30 stocks itself? just a question..

and Brandon... nice goin bro.. that post reads like pure self interest loud and clear...