Figuring out e-minis

A

arzoo

I currently trade stocks and am looking to move to e-minis hopefully in about 2-3 months time. So far, I’ve watched the NQ and ES for the past week and have some newbie questions I hope the more experienced traders can help me on.

Would it be better to concentrate trading just one or trade the 2?

Assuming that the ES and NQ move together when a trend takes shape do you split your allocation between the 2 or do you just take ES or NQ, and which would be better?

When I start trading, I’ll be using 1 lot contracts until I learn how to. Hopefully, if, after 6 months, I do get to be ‘fairly’ successful trading the minis, what would be a sensible # of contracts to trade on the NQ/ES on a 50k account?

By the way, these are some things I’ve noticed. Please tell me if my observations are wrong, since I hope to keep learning more about the minis:

The NQs seem to be the more ‘dominant’ of the two, meaning that when the NQ & ES move in separate directions, the ES usually seems to weaken in its momentum due to the NQs ‘pull’. Is this because some of the Nas 100 issues are also in the S&P?

The ES creates more ‘false brkouts’ whereas the NQ usually is able to run about 5 pts at least from a brkout, even if the brkout stalls.

Sorry if the questions sound real silly.

Thanks for your help.
 
Intraday you need to be watching the whole complex of equity indexes at the same time. DJIA, SPX, NDX, SOX, ES, NQ. also you need to be aware of NYSE TRIN and you should chart 1min NYSE TICK(with 60pd bollinger bands). Get something like tradeprospector for charts so you can see all the key support and resistance levels that traders are watching for all of these.

good luck.
 
ARZOO, I TRADE JUST THE ES AND USE THE NQ AS A "CONFIRMING INDICATOR" ALONG WITH MY OTHER INDICATORS. I KNOW THIS IS SOMEWHAT VAGUE OF AN ANSWER, BUT MY MESSAGE IS THAT I FEEL IT IS BEST TO FOCUS ON TRADING ONE SECURITY AND TREAT ALL ELSE ON YOUR SCREEN AS A "FILTER/INDICATOR".
 
es same as SPY, 500 stocks, mostly large cap, in all sectors, MSFT is a big mover

nq same as QQQ, 100 largest nasdaq stocks minus banking shares, MSFT is big mover

never could see the point of qqq, If you want tech, XLK.

If you want retail (whatever, I forget)

Whoever heard of selecting a portfolio based on it's exchange?

(man I'm cranky this evening. I found Mr. Greenspans comments to be highly intrusive. Gotta stop letting the real world mess up my imaginary trading plan.

Greenspan: profitseer, go ahead about your business. As long as I don't accidently say anything, everything should proceed as normal.)

At any rate, if you like qqq you'll like nq.

Now me, I don't like anything, so all I trade is es.
 
I trade ES and stocks. For me, the Dow and Ticks work well. I especially like to watch the Dow to stay with a trade. My best trades are the ones where I'm patient. I use trendlines, retracements and S/R.
 
Hello,

1st off be very careful when considering trading Futs, moves can happen quickly, & strict adherence to stops is CRITICAL. They range or trend nicely, & on a narrow pt. range days there is $$ to be made.

I've traded both, & on some days 1 may have strength over another, however I've come to prefer ES. The false breakouts I disagree with, lots of breakouts fail in a range bound market. Say NQ moves 5 pts., thats $100 per contract, an ES 2 pt. move is $100. People always just look @ ES, & NQ, however the Tbond on CBOT also trades nicely. It's somewaht slower @ times, but a tick there is worth $31.25, & I like it. Timeframe setups are a little larger vs. Eminis.

Definitely rec 1 contract till consistently profitable, then add another, & so on. More contracts in a strong trend, & higher probability setups, vs. chop zones or lower probability trades.

For a 50K acct., it would depend upon what you intend to do, scalp, swing, position trade? My setups mainly consist of .75 - 1.5 pts. on occasion 1.75 - 2.5. Larger stops = smaller size in order to keep risk in the .25 - 1% range. This is going to have to be determined by how trade. So, on a 50K acct. .25 - 1% will be $125 - $500. A setup with a .75 - 1.5 pts. trading 3 - 5 contracts if you could work up to it, would net some good profits getting winners of 1 - 2x Risk on avg. The wider stops are only 1 - 3 contract setups.

By stopping trading 4 the day @ a drawdown in the 1 - 2% on a 50K acct., leaves you room for a few or several trades per day, while not being severely damaging either equity wise, or psychologically.

Only take your best shots, learn when to stay on the sidelines like in your other trading. CHOP in the futs will ERODE CAPITAL QUICKLY!! This is similiar to parameters I have on a smaller acct., it is IMHO only & has worked for me. I hope it gives you some guidlelines to base your plan from. Good Luck & Good Trading!!

God Bless You!! Kelly
 
arzoo
I have found that on most days that don't have stock specific news or earnings affecting the market... the ES points the direction that the market is going. When you see the ES fade and roll over, the NQ and YM will soon follow. I trade the NQ sometimes and only watch the ES for my entries and exits. I also trade the DIA totally off of the ES with CCI. I am not saying that the ES is always the leader but I feel when big money gets put in and out of the market it is often via the full size S&P contracts. This moves the ES and others. You will also notice that the market trades different when "curbs" are in because arbitrage and program trading come to a crawl. Big money in the futures will often toy with the stops just above or below swing highs and lows and you can make money off the moves if you pay attention. you cant beat the commissions and leverage of futures but watch them like a hawk for a long time until you get a feel for the way they move. Happy trading :)

Note: I dont watch the YM to trade the DIA because I think they are still too young and trade a bit like a lost poodle. Give them about another year and they will be great.
 
Quote from profitseer:

es same as SPY, 500 stocks, mostly large cap, in all sectors, MSFT is a big mover
More...

put es and msft side by side and you will C.:cool:
 
Thanks for the advice. I can always count on ET to provide good info.

Thanks Kelly for the details you laid out. That's a good way of managing risk.
 
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