Futures or Stocks?! The truth

S

Spectra

There was a thread here awhile go about the advantages of trading futures. That thread has since vanished. Maybe the powers that be do not want you to know the truth. haha
Eh! It was probably just a database error, anyway ...

Here are some some of the various reasons why a lot of consistant traders prefer to trade futures (YM, ES) over stocks.
+ You can day trade without needing $25,000+ in the account! Setup two accounts with about 10K in them and gain access to hedging techniques

+ commissions are decent $4/round turn trip on the e-mini futures

+ Tax Reasons + You don't have to list every sale on your return! (for people in the USA)

+ It's liquid enough. Market orders are instant. No weird fills

+ The spreads are never going to be huge like they can get on stocks

+ Focusing on one instrument day in and day out is less complicated and more productive

+ You can sleep in! Don't bother with waking up at 6am to scan for stocks to trade

+ Share size allocation is easier. You can trade from 3-8 contracts instead of thousands of shares that get filled at different prices

+ We've all held a stock that plunged due to random company event. While econ reports move the futures. It's never been -that- bad and you know when these reports will be released in advance.

+ There are always shorts available!

+ No uptick rule (not that its going to be lasting too much longer)

+ The $5/tick range of the YM makes for lower slippage(ES, ER too volatile=bad slippage)

+ Bang for the buck. You make 1+ 3 trades a day and can make as much as the multiple stock juggling stock traders do.

+ Don't have to follow the indices and sectors, eminis ARE the indices. stock traders constantly have to follow the cues from the indices to track their positions. That means more eyes to follow all these charts.

+ Less investment in hardware and software cost. I used to have 3 PCs with 3 monitors, now only 1. Used for have 4 charting services, now 1, another as backup and it's free.

+ NO gaps to deal with, market always open. Terrorists attacked London underground early hours of the morning, if you wanted to, could be out in minutes and not wait until open and dump the stocks along with panicking crowd.

+ NO market makers, no games.

+ NO routing decisions to make: "ECN? ARCA? REDBOOK????? Oh man, could have gotten a better fill with ARCA!" Geez, Louise.
More...
P.S. This list was complied from our thoughts as well as a few of the other members.
 
Yes, That's exactly true!

Stick $5,000 in an account and get that stage of your trading career over with. Everyone I've known who's started with the $30,000 account has blown it up as well. Would rather see a newbie lose $2500-$5000 then $30,000.

Depleting ones account is usually a turning point in which the newbie sayd "Alright dang it, time to get serious!!'
 
i trade both

i make my income from futures scalping, i do some stock daytrading on the side,

and i use longerterm and swingtrades in stocks for my portfolio to build wealth

one thing i wanted to correct, though

there ARE market makers in futures. but a market maker does not have the influence that he would have with stock. that's obvious, because futures can be arbed with underlyings, etc.

so, you are correct in that market makers cannot influence an index future, like they might be able to do on an individual stock, but they still exist. Check cbot or cme if you doubt that there are futures market makers.
 
Well, I spent alot of time trying to trade futures profitably, and could never break over break-even. I'm trading stocks now and consistently making fairly good money. As far as I can tell, it is alot easier to find a tradeable edge in stocks.

Kind of makes all of those other points irrelevant.
 
Great. Glad you found a way to extract money from the market. Equities are what your better at. I've had the opposite experience but it doesn't make either of us a better trader. Keep up the good trading.
 
Quote from Spectra:

Great. Glad you found a way to extract money from the market. Equities are what your better at. I've had the opposite experience but it doesn't make either of us a better trader. Keep up the good trading.
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I guess my point is that your list is all minor points compared to actually being able to consistently make money with a particular product. You're singling out trees and I'm talking about the forest.

I'm not really trying to be antagonizing here. Hope it doesn't sound like that.

Good trading to you.
 
No I didn't feel that way. Thanks for the input. The list was made from an old thread on here. It's just expanded over time. I agree with most of them. You could have everything in the world going for you and still fail if your mind wasn't in the right place. If your trading stocks now and switch to futures your not going to magically start raking in the dough.

Anyway, good trading to you tomorrow. Going to get some shut eye.
 
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