Is it easier to trade consistently for profits with futures than stocks?

H

helpme_please

My experience is mainly with stocks. I know little about futures. I would like to check with the elitetraders here who have experience with both.

For traders who want to trade more consistently for profits, would futures be a better instrument than stocks? With futures, one can go long with the same ease as going short. With stocks, it is harder to go short and far riskier. One needs to borrow stocks to be short. There is the risk of a short-squeeze throughout history. In recent years, Porsche shortists got squeezed. For futures, it is far more liquid and almost impossible to have a short squeeze because there is no finite limit to the number of contracts that can be created.

Is it accurate to state that consistent profits is easier to achieve for futures than for stocks?

This year is a bear market for stocks. I doubt there are many stock traders who are able to have a good year this year. I am guessing that there are many index futures traders who can have a good year trading stock indices despite this year being a bear market for stocks.
 
helpme_please said:
Is it accurate to state that consistent profits is easier to achieve for futures than for stocks?
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No, not easier. But trading Futures has a number of advantages.
  • Leverage (Can be a disadvantage too)
  • 1256 contracts
  • As you said, easy to go short
  • no borrow interest
  • No PDT rule
  • Longer trading hours
  • Less fragmented markets

In the end the most important skill is to find a process to make money and keep it. Not as simple as it sounds. That said, if you can do it with futures, I would. If you need single stocks to find your alpha, then that is where you should focus.
 
helpme_please said:
...For futures, it is far more liquid and almost impossible to have a short squeeze because there is no finite limit to the number of contracts that can be created.

Is it accurate to state that consistent profits is easier to achieve for futures than for stocks?
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For the love of God, stop that thought process right now. Please get into a PM with @vanzandt
He's the only folk I know at this time who may have a keen insight into stocks. And he's funny, too.

Short squeezes are not only possible in Futures, but even more likely.
 
Overnight said:
For the love of God, stop that thought process right now. Please get into a PM with @vanzandt
He's the only folk I know at this time who may have a keen insight into stocks. And he's funny, too.

Short squeezes are not only possible in Futures, but even more likely.
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Why are short squeezes more likely for Futures? There's no finite supply like number of shares for individual stocks. There's no finite limit to the number of contracts that can be opened in futures.
 
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A short squeeze is just another way of saying too many traders crowding a trade. For instance this October when the markets took a decent correction we don’t call it a long squeeze. I wouldn’t put that issue to stocks only.

I fail to see how stock trader would differ from a index trader in a bear market, it’s the same underlying markets.

The big difference between futures and stocks is access to commodity, agriculture, forex. I’ve done some studies and found stocks to be more mean reverting markets, while commodity and agriculture futures can get quite trendy when they do start moving hard one way or the other. Forex trend better too due to the fact there moves are caused by macro events that take awhile to unfold.

The biggest issue I have with futures as a daily/weekly swing trader, id need about 100k in my account to meet my risk tolerances. Stocks I can get away with 50k and leverage/deleverage in smaller increments. 1 futures contract is quite a bit of leverage.

If day trading the minimums can go down but I wouldn’t let those 500 es margins fool you into thinking you got the cash to play in that market.
 
Metamega said:
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The biggest issue I have with futures as a daily/weekly swing trader, id need about 100k in my account to meet my risk tolerances. Stocks I can get away with 50k and leverage/deleverage in smaller increments. 1 futures contract is quite a bit of leverage.

If day trading the minimums can go down but I wouldn’t let those 500 es margins fool you into thinking you got the cash to play in that market.
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Fukin' A, you have the right way of thinking. Always always trade with the mind of the full margin requirement per contract. And in NQ right now, I believe it is $7,700 per contract. Just nuts. Oh, and NG performance bonds went up also. Twice in the past 6(?) trading days. Big surprise, heh.
 
Robert Morse said:
Longer trading hours
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I found trading futures easier because I could execute trades whenever I had a great setup. I wasn't limited to the six-and-a-half hours constituting the New York session. (I only trade currency pairs now.)
 
What timeframe? If you can't make money with stocks, you will most likely not make in futures. Some points for stocks:
Less efficient - main reason.
Options more common/available
No rolling to worry about
Retail focused regulations.
Maker/taker fee model.
Cheap/free platforms and more tools.

I think it's fair to say that it is "easier" to make money in stocks. But if you just day trade indices, then what Robert said.
 
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