Futures Swing traders opinions please.....?

[Overnight]

I've looked at some of those, but those with low volume scare the crap out of me. Thanks for the tip on the book. I've listened to one so far "Market Wizards", and am currently listening to "Trading the zone". I'll add that one next.

Do not be scared of low volume. In my experience, it is an unwarranted fear.

 

[comagnum]

I've looked at some of those, but those with low volume scare the crap out of me.
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Those contracts are the larger global futures markets - they are very liquid and have tight spreads and have less slippage than most. These are contracts traded by large hedge funds - they are liquid enough for Goldman Sachs, JP Morgan, and all the other big hedge funds.

 

[Money Trust]

The biggest danger of swing trading futures is the possibility of some overnight news event that send prices into a tailspin.
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How about the risk of not capitalizing on the many overnight gaps in your favor you will miss. Price movement with good momentum most often moves in the same direction after hours which far outweighs the gaps that go against you.

Isn't that what I said in the flip side?

 

[ADONAI1ST]

I've looked at some of those, but those with low volume scare the crap out of me.
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Those contracts are the larger global futures markets - they are very liquid and have tight spreads and have less slippage than most. These are contracts traded by large hedge funds - they are liquid enough for Goldman Sachs, JP Morgan, and all the other big hedge funds.

How much volume do you consider low vs high? I look at say how much I see after a few hours. I've just been looking at those with huge numbers everyday. ES CL ZM. I'll take a look at all those on the list. Maybe I'm mistaken, is the volume number the amount of contracts that have traded that day?

 

[comagnum]

I consider about 10k volume to be adequate for swing trading. Although most of what I trade has much more volume. The main thing I look at is for the price to move without tick gaps from the bid-ask spread spiking. Next I look at the the cost of the trade in relation to the daily price range. For example the ES has a cost of 0.16% whereas the EMD and has a cost of 0.10% and will far outpace the ES & NQ on big multi-week rallies in the profit per contract. So volume does not tell the whole story. To answer your question: volume is the # of contracts traded. For example on Friday CL had 187,440 trades with volume of 380,095 - this indicates the average trade size was 2 contracts.

 

[java]

Some contracts have very little daily volume but trade very actively during the first few hours of RTH.

 

[ADONAI1ST]

I consider about 10k volume to be adequate for swing trading. Although most of what I trade has much more volume. The main thing I look at is for the price to move without tick gaps from the bid-ask spread spiking. Next I look at the the cost of the trade in relation to the daily price range. For example the ES has a cost of 0.16% whereas the EMD and has a cost of 0.10% and will far outpace the ES & NQ on big multi-week rallies in the profit per contract. So volume does not tell the whole story. To answer your question: volume is the # of contracts traded. For example on Friday CL had 187,440 trades with volume of 380,095 - this indicates the average trade size was 2 contracts.

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EMD?

 

[Stymie]

My suggestion is to drop your trade size by 90% and don't use stop loss orders. Then you can dollar average when the market goes against you and wait till your right. When you dollar average at a big discount, use your first entry as your new profit target and add 2-4x. Repeat.

 

[patrickrooney]

Options help a great deal to relieve overnight concerns. If you're short a futures contract, you can always buy a call option contract to protect against an upside surge. Buy a put to protect your long. I generally prefer this to stops as stops get picked off in thin, erratic, overnight sessions.

 

[java]

My suggestion is to drop your trade size by 90% and don't use stop loss orders. Then you can dollar average when the market goes against you and wait till your right. When you dollar average at a big discount, use your first entry as your new profit target and add 2-4x. Repeat.

That's what I did when I semi retired, cut account by 75% and quit using stops because I now only need consistent profits better than investing but not large profits like if I owned a business. There is no problem with trading. I won't say it's easy but quite doable if you stick with it. The problem arises when you need large monthly profits on an account that is so large that if you lost it all it would be a tragedy.