How to Improve your Stock Trading via Futures Trading

Whatever it is, something "clicked" for you. That's huge. For whatever the reason, it's bringing you to a different level. Go with it. Keep it going.


That what experience is all about. Now, it's your turn to capitalize from it. It's just a part of being "successful".
 
Quote from gotta_trade:

Whatever it is, something "clicked" for you. That's huge. For whatever the reason, it's bringing you to a different level. Go with it. Keep it going.


That what experience is all about. Now, it's your turn to capitalize from it. It's just a part of being "successful".
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gotta_trade,

thanks for the encouragement! It seems like a step in the right direction. Well, just to let all of your ETers who's struggling out there, it's not all bleak.

It's possible. It'll take some time. I was THIS close to quitting stocks trading. Literally. There were days I felt like I've wasted all this time and have nothing to show for. Like going down a blind alley. And seeing the sands of time dripping away...

Only a few weeks ago, I said I had enough with stocks and just focused entirely on futures. But a little voice told me to give it another try. And I did. And I'm glad I did.

BTW, futures is good but it's not the answer to everything you know. There are still crappy futures days too. So, the more instruments you can trade the better I think. Ideally, I would like to learn to trade FX too. But for now, I think I'll stick with just honing my equity and futures trading skill to the max. If I can do that then I can have the luxury of "starting over" again and learn a new instrument like FX. But now, it's catch up time.

wish ya'll good luck!
 
Quote from Momento:

:D

Is good to hear some good sharing once in awhile, instead of bashing and whinings.
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momento,

well, i've done my fair share of public bitchin' and complain' how sucky markets are here on ET. But the i figure if you want to stay in the game, then you better improve. If not then just quit and stop bitchin'.

:D
 
Stock has low leverage, it is not easy to speculate with low leverage since only the slippage can take all your gain. I speak of course of intraday especially scalp but even if you don't scalp the important thing is the risk and with stock you have proportionally more risk than futures because of fees and because also of variance. After only 3 months of daytrading stocks I have understood this. Some people only switch from stocks to futures after years well it's never too late :D. I would only trade stock on daily scales, on intraday scale it's too much work compared to the future and since I'm so lazy futures is the choice.

Quote from bungrider:

maybe it's because stocks are easier to trade than (index) futures??

i'm assuming you're talking about index futures here...

this is a cool thread...
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Quote from harrytrader:

Stock has low leverage, it is not easy to speculate with low leverage since only the slippage can take all your gain. I speak of course of intraday especially scalp but even if you don't scalp the important thing is the risk and with stock you have proportionally more risk than futures because of fees and because also of variance. After only 3 months of daytrading stocks I have understood this. Some people only switch from stocks to futures after years well it's never too late :D. I would only trade stock on daily scales, on intraday scale it's too much work compared to the future and since I'm so lazy futures is the choice.
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harry,

I totally agreed. Trading futures is such a high sometimes. Very liquid, easy, cheap, and great leverage. However, like I said I'm doing BOTH now. But for stocks, my horizon has increased significantly beyond scalping to tens of minutes and even hours and occasionally(rarely) days even. And that has definitely helped my stocks trading.

Now I know WHY I didn't make any significant $ doing pure stocks scalping. I'm sure there are people here who do great with that. Maybe I just wasn't any good at pure stocks scalping. It seems like in pure stock scalping you have a lot of barriers to overcome:

1) high transaction cost(commissions) for high frequency trading
2) slippage (specialist games or what not)
3) low leverage offered by stocks
4) a few big losses can wipe out your entire day's gain if you are only trying to get a few penny/cent gain.

I think nitro post's summarizes this dilemma the best.

He wrote,"I can tell you one thing though and this has been discussed before at ET ad-naseum : From principals at firms that I have talked to that have access to MOUNDS of data of hundreds of traders over many years, the statistic is that the decent traders make about .013 to .017 cents per share per. 01 penny spent (assuming .01 per share pricing - those that get their comissions down make that much more.) The really terrific traders make .02 per share + and are talking advantage of the commission charge limit at these firms that cap the comission at $20 - $25 (about 2K shares at .01 per share) In other workds, they are doing SIZE and not "paying" for it. "

(http://www.elitetrader.com/vb/showthread.php?s=&threadid=16614&perpage=6&pagenumber=4)

It's a tough play trying to make a living off of .013 to .017 cents? I think nitro meant 1.3 to 1.7 cents. I just found out that I'm much better at holding stock positions for bigger gains.

For futures, it's still great for scalps. I would scalp futures all day. And even better for longer holds, but I still haven't gotten to the point where I can hold futures that long YET... One day it will come. Hopefully soon!

So, you trade FUTURES exclusively harry? Index? Or the commodities as well?

trader99
 
I am glad to hear about your change over to futures. I just made the switch and will be going live next week. I got to the same point you did with stocks of almost never wanting to trade them again. I think a break from stocks will be good. I know I will probably venture back at some point to stocks and hopefully with a better perspective on trading them from the longer timeframe view such as you have. I came from a stock scalping background too and at this point it is not worth it for me either. I was still making money doing it but hardly worth the effort and capital that it tied up. I came to the same conclusion as you did on the disadvantages of trading stocks in the short term. I am even hearing some of the LLC's set up to train and make money off of trading commission from traders have been realizing the difficulties of trying to train traders to trade in the short term. Their short order chasing strategies and tape reading has not been very profitable as of late.
 
I have been trading stocks rather unsucessfully for the last 4 months. I tried NASDAQ and listed and have recently switched to futures e-mini using the Don Miller method...

I have been paper trading (for what it is worth) for the last 1 1/2 weeks and only had 2 down days (small losses) and my winning days averaged about 3-4 points....

Yesterday was I went live and had four losses in a row all within 1 hour close to the open.....
I sat there dumbfounded, reflected later on my decision making process for each trade, AND REALISED AT SOME POINT DURING EACH TRADE, I BROKE EVERY RULE I USED TO PAPER TRADE THE DON MILLER METHOD..
1. stay away from the open: 2 of my trades were in the first 1/2 hour....
2. use only price or MA crossovers: I tried to get fancy and fight the tape and lost..
3. use tight stops: I used subjective mental stops and this added to slightly more losses...

in short I was so anxious to make the $$$ I was making on paper, I lost all my composure and rushed into out of trades that didnt make any sense..

In short, stick to your discipline and dont go live (from paper trading) unlesss you are sure you can be as objective and stress free as you were on paper..

I am doing much better today and picking my spots with tight stops..
 
Only problem is, it takes live trading to get as objective
and stress free as you were on paper :D

peace

axeman

Quote from mdl060374:

In short, stick to your discipline and dont go live (from paper trading) unlesss you are sure you can be as objective and stress free as you were on paper..
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Just trade with extremely small positions. That way, you won't feel the pressure. It won't make a difference, because the profit or loss potential will be so small, it won't matter either way. But, you can still test out and develop confidence with your methods.
 
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