Equities vs. index futures

Here is my 2 cents.

Futures like the ES, US, etc are mighty fine "TRADING" vehicles if one has the experience and knowhow of "TRADING".

Stocks are for "INVESTING" time is on your side if the purpose is long term gains such as the kids education, retirement etc. But yet an "INVESTOR" must also know how to be a "TRADER" also, just with a different time horizon.

The key word in both is "knowing" how to trade.

Long term stock traders of "buy the dip" fame during the last bubble found out what "TRADING" was all about.

Futures like the ES etc are "NOT" dependent on the next qtr report, a lawsuit settlement and hocus pocus accounting, etc. Futures traders unless they are daytraders are more attuned to the macro economics of the big pictures, that in itself makes futures trading much easier.

Short term trading is where the money is at, when the trader gets the game boiled down to a rather simple system with certain signals, rules. Many think the more complicated and esoteric they make it, the higher the math, the more lines drawn on a chart etc is better.

WRONG, the game is as simple as you possibly can make it....I am living proof of that......many thought i was crazy when i guit trading stocks and switched.....:)
 
Quote from Zastaber:

Yep, I am not saying your point does not makes sense at all, I just wanted to comment the 100:1 picture.

A trader, newbie or experienced, do not need to use all the margin in each and every trade tho, one can adjust size to what level of leverage one wish for.

In futures you can trade 1:1 if you want, but also go as high as 130:1 in extreme cases.
In stocks you can trade 1:1 if you want, and maybe say 5:1 in extreme cases, but usually not more than that.

Also one have to remember, you wont have to worry that much about sudden big% drop in the index as the ones you risk in single stock trading...

In my eyes, trading the futures offers alot more choises for the DISCIPLINED trader, and thats what its all about - discipline.

Most people/new traders seem to lack the discipline needed to trade very high leveraged futures, sorry to say...
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Some Spreadbetting and CFDs companies were offerining a year ago 10:1 on every market aside indices and 20:1 on some uk blue chips.
 
Obviously there is no right answer on this one so here goes mine.
I simply see no edge in trading the indexes anymore since that now seems to be the favorite of most everyone in Trader Nation. Stocks, on the other hand, by the mere fact there are so many offer lots of trading edges. I used to trade the stock index futures in the old days and it was pretty easy then because it was more of an instititional thing with the little guy able to exploit various trading patterns. Then switched to mutual funds where there were all sorts of edges such as datelining and the like. With all the restrictions on fund trading now and also because of the flattish market since January of 04 switched to individual stocks late last year and in hindsight regret I wasn't trading them in the roaring 90s. Leverage? I hate leverage, but maybe that's just me and has a lot to do where the trader is in his trading career.

Hi oil trader. Your methodology sounded familiar. Hope all is well.
 
gary ... I sort of disagree ... I see ways to trade stock index futures intraday using various indicators unique to these financial instruments

I would think there is alot more program trading as percentage of exchange volume nowadays than when you started trading sp500 futures intraday

:)
 
I have traded both.

I found it very hard to find an edge in trading index futures. Everyman and his dog are trading index futures these days.

The great thing about stocks is that they are not a crowded trade.

Also, if your point is leverage, you can trade stocks using leverage if you want by buying calls or puts.
 
Warren Buffet cuts down the size of the bet on the dollar. Well Warren was never a stock or any other kind of trader.

Buffet "BUYS" companies.

His loss on the dollar so far is over 900 million and still is short some. Warren never was a player in the tech bubble, he again can not trade because he does not know how to. Surely he has big money, but the fact remains he is a buyer of companies, not a stock trader.

toad

"all" dogs are also welcome to play in the futures game, as long as they bring money.

The bigger the crowd the better, volumn and players make up the game. I wish you well in your learning curve.
 
Hello Gary,
I have borrowed some of your ideas from your book and pretty much agree with much what you state. IMHO Leverage is for many a false bravado, a challenge and many sadly bite the dust due to leverage. I can attest to that from my CBOT days.
I now only trade my retirement account (part-time) and try to time the market alas swing trade it using Rydex funds via Scottrade. The restrictions you mentioned and new rules do not affect me a least bit since my style is quite different.
I also use ETF bond funds to hedge....I get ~10 percent of some junk ETF's now...
Since in a retirement account I can't go short and I do not trade options I can only trade rydex style timer funds and I will not change that.......

Quote from 007Arb:

Hi oil trader. Your methodology sounded familiar. Hope all is well.
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