if you could trade only trade 4 markets...

T

TheoCap

if you could trade only trade 4 futures contracts in North America, which ones would they be? (assuming you had an edge in each, a stretch, i know).

I'm considering this question myself; I'm looking to diversify my trading away from soley the ES, so non-correlation would be key in my case. I don't plan to tackle four all at once and start trading willy-nilly, but will begin watching, studying, and backtesting my strategies on a few new markets.

Here are my thoughts so far...
1- ES (I already trade it)
2- 30 year T-Bond futures
3- A metal (Gold or Silver)
4- A currency (Probably Yen or Swiss Franc)

The thing that makes this difficult is that correlations have been increasing across the entire spectrum over the last few years.

I'de appreciate anyone's thoughts/suggestions. Thanks all.
 
That's a good question, here are some other options:

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ZN/TY - 10 year bonds (notes)
C - corn (ag)
QM/CL - Oil

I also like substituting YM for ES when considering position trading (lower performance bond, much more regular moves)
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I like the currencies, but the only problem I have with them are they hours you have to keep to find the good moves ... I don't like looking at the charts at 3am to 5am ET, which is often when they will make a substantial move.
 
Have a gander at the grains they are as scary as they first look and are great if you a fan of breakout strats. Currency futures in my opinion while limited as far as pairs go offer plenty of exposure as well.
 
1- ES (I already trade it)
2- 30 year T-Bond futures
3- A metal (Gold or Silver)
4- A currency (Probably Yen or Swiss Franc)

Under current market conditions this is effectively really all the same trade due to the correlations. Short one and long another is the same trade or a hedge on the other. It is really difficult to fund uncorrelated trades and this represents a huge risk as what might apear to be a "diversified" portfolio is just one big position.
 
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