Let's talk about futures

profitlocker said:
I'm considering researching and adding high capacity/low frequency futures daytrading systems to my arsenal. I've done well in low-mid capacity equity markets. I'll probably play around with SPY while I do this, and move on to ES if I discover anything worthwhile. I'm futures stupid so bear with me here

Just a few questions about intraday trading in regards to futures:

1. Do most ES traders only trade index futures? Any other commodities/contracts?

2. Are you trading the same instrument(s) everyday? (I don't see this being viable, but just curious)

3. Can I do well trading 1-2 times per day? (I hate scalping)
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You worded your questions in a strange way but I'll answer them via a way you should have worded them.

Answer 1 -

Most traders of the Emini ES futures are professional traders working for financial firms. In contrast, most retail traders that trades the Emini ES futures...most of them are only trading the Emini ES futures because they can not afford to subscribe to all the other different exchanges of commodities/contracts that's available on this planet. Seriously, you're talking about 1k - 2k in subscription fees per month (at the minimum) to have access to real-time data to ALL available commodities/contracts on this planet.

Reality, if a retail trader has access to data for trading the Emini ES futures...they also are given data in that subscription to Emini YM and Emini NQ futures...not the Emini TF futures because that's on another exchange and its $110 for that subscription.

Ironically, the birth of the Emini futures had several purposes and one of them was the exchanges wanting to capture the market involving the small account traders, spread/hedge vehicle for financial institutions and other reasons. Its ironic now because exchange fees are now increasing (e.g. ICE exchange for the Emini TF futures), more small account traders are inactive...defeating one of the original purposes for the birth of the Emini futures. The exchanges no longer view "small account" traders as an income option for them as they originally did during the dot.com days when "day trading" was hot.

Answer 2 -

Most retail traders are not trading the Emini ES futures every day like as a day trader or scalper. Notice how I keep using the words "retail traders". In contrast, most retail traders of the Emini ES futures are swing traders...opening a position one day and closing the position another day. I only say this because I saw statistics once about this in a magazine. Those stats was an eye opener for me because I always "assumed" most retail traders of the Emini ES futures were day traders. I was wrong.

It makes sense for someone to be trading different types of commodities if they call themselves a specific type of trader. For example, I often see traders call themselves a "trend trader" but the contradiction is that they are trading the same trading instrument every day even though that trading instrument does not trend every day. :D

Therefore, it makes sense that if someone was a trend trader...they would trade any commodity that's trending. Those that do such, you'll notice them trading Gold GC futures, Crude Oil CL futures, Emini futures, EuroFX 6E futures or some cyclical commodity like Wheat futures or whatever...moving from one to the other depending upon which one is trending. These types of traders are not common...usually veteran traders that's been at it for a long time and move back n forth between different types of commodities.

Answer 3 -

Don't know you, never traded with you in person.

Thus, impossible to answer with any accuracy if you can "do well" in trading any commodity. If you hate scalping...don't do it because its really only for professionals or for those with seats on the exchange or someone getting very special commission rates and using an automated trading system.

You can try scalping but good luck with that if you don't have the above infrastructure mentioned. Thus, you'll most likely stuck with just making day trades (no scalping) if you prefer day trading instead of swing trading.

scalping is a sub-group of day trading
 
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Handle123 said:
I lease seats in all USA futures exchanges, I have small staff and automation, I had someone who stays on top of keeps me legal and sane. I am not all that bright any more and often wonder if I ever was, LOL. I just concern myself with trading and system development, oversee staff on weekly basis as I have staff manager for daily and account staff, long term commodity trading overseen by three gals that just got increased first of the year as I am slowly going into a different direction in trading, one gal been with me since 1994 as that is when that system was first programmed to give printout for signals, recently had completed only third reprogramming done in 22 years of adding different way of entering based on a pattern I discovered on intra-day charts. My interests are wavering from the actual manual trading to want eventually have 100% automation. It not a matter of lack of discipline but I want to do other things in my life, I still love playing the game, but why sit for 3-4 hours looking at more charts when machine can do it for me and much faster. It just getting tougher for day trading for me, volume seems to waver, even the first hour. I always thought long ago I be trading 1,000 lots but really not practical, and reason is when doing back testing you want uniform volume and if you can't have same volume on each trade, results will become distorted. So on signals where price just takes off, I be getting into 1/3rd but when I get losses, of course not only get full volume and ave down would be full losses. If I was trading SPY and doing 5k shares there be no problem of doing first 60 minutes as that represent usually no worse at 7% volume per minute, but ES on one minute timeframe 1,000 lot can be on some minutes half the volume which tells me by doing ave down, market lacks getting out decently and cause own slippage.

I want to do much more very long term commodities trading along with options on futures. I been doing spreads last three years and I even hedge those now in case spreads don't work out. But am doing much more directional stock/ETF option trading as recently finished programming my 2nd system, first one was ok but way too may trades of daily bars, so am on monthly/weekly. Options are more fun cause it is just studying how to balance risk but based on chart patterns and always a story of where the most are going to get trapped. And the occasional "let's screw the uneducated" of where calls are hugely discounted and Puts have little Prem.

I tend to study trading much more now before considering back testing. I mean I have a great deal on my list of possible new ways to look at price, but I don't want guys that program for me to take some dumb idea I had four years and spend three weeks trying to make it work. Usually best ideas I have come up with has been through mistakes, LOL So it is a great deal of hands on.

I get great number of folks asking me what they should do cause they at work and want me to give them ideas, more like completed system to make them rich, but they have no idea about charting, if it was that easy. Nothing is ever when X crosses Y and have an always in system.

Today is Doomsday April 15th, and next week reduction of folks dumping monies into 401k, Roths and IRA, so start of the dulls and lighter volume possible.
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Wow, thanks for your detailed answer.

You always talked about putting stoploss at 1 tick above breakeven when your position goes on your favor. Usually how many ticks in profit do you wait until you move the stoploss +1 tick breakeven? Also how many ticks of stoploss do you enter position with initially??
 
SPT said:
Wow, thanks for your detailed answer.

You always talked about putting stoploss at 1 tick above breakeven when your position goes on your favor. Usually how many ticks in profit do you wait until you move the stoploss +1 tick breakeven? Also how many ticks of stoploss do you enter position with initially??
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Well, each instrument is different and when you trade it makes a difference as well, middle of the night Time bars changes from 3 to 5, and how many ticks it must go for you to go the BE+1, So instead of giving you a list, best to teach you how to do it, take 2 ticks chart and mark up 500 trades and see how many ticks it went profitable before price would reverse to become a loss. Another point is also how much you willing to risk to make. So say you going for 10 ticks, at what amount of ticks are you willing to risk to get 3, 2, 1 ticks? Cause if you are risking 10 ticks and price went your favor for 7 plus, you are risking 17 ticks to make another 3 ticks.

One area many traders never discuss, what do you do if price has touched your target several times and you still in? You have to come up with an answer for that.

Say you are long, trying to get out at 1.50, but you see great amount of volume on ask side, volume is like a magnet, so I will stay in 1-2 ticks more.

I usually risk $150 no matter what market but it is a catastrophic mental stop, so don't be a deer in headlights just waiting for price to hit it. And I target $100-150, it is small and doable and what I want, low percentage possibility losses.
 
Handle123 said:
Well, each instrument is different and when you trade it makes a difference as well, middle of the night Time bars changes from 3 to 5, and how many ticks it must go for you to go the BE+1, So instead of giving you a list, best to teach you how to do it, take 2 ticks chart and mark up 500 trades and see how many ticks it went profitable before price would reverse to become a loss. Another point is also how much you willing to risk to make. So say you going for 10 ticks, at what amount of ticks are you willing to risk to get 3, 2, 1 ticks? Cause if you are risking 10 ticks and price went your favor for 7 plus, you are risking 17 ticks to make another 3 ticks.

One area many traders never discuss, what do you do if price has touched your target several times and you still in? You have to come up with an answer for that.

Say you are long, trying to get out at 1.50, but you see great amount of volume on ask side, volume is like a magnet, so I will stay in 1-2 ticks more.

I usually risk $150 no matter what market but it is a catastrophic mental stop, so don't be a deer in headlights just waiting for price to hit it. And I target $100-150, it is small and doable and what I want, low percentage possibility losses.
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Interesting way of thinking. So for ES, I guess you are aiming for 3 point. You talked about 2 ticks chart and mark up 500 trades. You are saying that I should create 2 ticks chart and study the movement of next 500 trades?
 
SPT said:
Interesting way of thinking. So for ES, I guess you are aiming for 3 point. You talked about 2 ticks chart and mark up 500 trades. You are saying that I should create 2 ticks chart and study the movement of next 500 trades?
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Not all trades have the ability to have to get 3 points as I back tested them, let's take for instance a Bollinger Band, and for this signal (Not all signals have same trend rules) we are using slope, if last bar the 18sma is sloped up, then on current bar I do not take into consideration the slope of the 18sma as it bouncing around, so if sloping up and price comes down to lower BB, I am in, so like a bungee cord that sucker is pulled back hard, matter of fact for some traders, hitting BB changes trend for them and I am very very very happy, cause more than half my signals I am getting in when much of the trend traders are licking their chops, I want to get in when so many think trend has changed. So I get long, always risking $150 and since this in trend trade for me, trend trades I only go for 2.00 points, often times other side of BB is all I can get, and should BB be more than 2.00 points, I don't say "oh boy I am going to get more" cause markets not set up for logical thinking. IF Dome is showing me much more volume on ask side, I might try to get 1-2 more ticks but I have to take the money. And no, I just don't do runners, that is someone's else's beliefs that they can get homerun, but what often happens is price stalls and reverses and when you could have gotten 2.00 points to watch like deer in headlights and make one tick. I must have done this long ago a thousand times cause it is incredible hard to take the money when every ounce of my soul is Screaming "Stay in Loser, it is going to trend all day long", That is what separates from the 95%, accepting your Trading Plan, which you designed and keep adding, is KING and I am just a dumbass hitting buttons and then I get banana at the end. Yeah, all the pain of mind and body to accept you not as bright as you first thought and being smart is going to take you longer if ever.

Yes, mark up ONE signal only as they are all different. Like getting in at BB is way different than getting in on breakout because by the time I am entering, price can be 1-2 points from the BB, one of many reasons I have not liked trend signals. Make 2 tick chart and on a chart above entry have minus suck much to see how many ticks price went against signal, under that how many ticks price go in your direction before price reversed to cause losing trade or Time Stop is engaged, then 3rd is how many ticks profitable did it go. So some of this is MFE and MAE. You can Google that to discover definition if you don't know.

There are a very few instruments where you can get more than $100-150 like Coffee, I might get $300-1000, but it not like I can toss on 400 lots, even one lot you can get horrible slippage. And don't start salivating, you ALWAYS think in terms of how much I am going to lose first. I like getting the sure thing then look for another trade.

Someone asked if I started trading for bank or brokerage or Institutional or Santa Claus, no. I lost forever, constantly heard rope swing and make noise of creaking sound like I was hanging myself, LOL. But few years after I got consistent I worked part time consultant and or trader for others. Although I had mentors, it is just lots of work, lots of losing, lots of rope swinging, lots of going to bank to get another loan, LOL. I just never quit anything I start.
 
I can't do the 1-2 trades per day, I've tried and failed every time, get greedy want more, I am slowly getting my head around scalping, market changes it's direction/mind about 20times per day, makes anything longer term especially at say $10 per pt too rich for me, so unless you've got a huge account which can trade with 50-100pt SL's so $500 to $1000 risk, don't even try.

Scalping is where it's at, if you want to make regular money with pretty much no down days, so therefore wage replacement on a small account.
 
I'll admit I am a rookie and still learning a lot but I have a few questions...

1. Do most ES traders only trade index futures? Any other commodities/contracts?

What is ES ?


2. I trade the 6E (euro future) exclusively. The way I look at it is all markets have their own nuances; I am more comfortable with one. I trade order flow and believe me it is very different trading a very thin market such as CL vs very thick such as the bonds.

What is 6E and CL ? Is that a Euro bond ? I did a brief check online and wasn't sure. I have no idea what CL is.

Thanks.
 
Handle123 said:
completed only third reprogramming done in 22 years of adding different way of entering based on a pattern I discovered on intra-day charts. My interests are wavering from the actual manual trading to want eventually have 100% automation. It not a matter of lack of discipline but I want to do other things in my life, I still love playing the game, but why sit for 3-4 hours looking at more charts when machine can do it for me and much faster.


Today is Doomsday April 15th, and next week reduction of folks dumping monies into 401k, Roths and IRA, so start of the dulls and lighter volume possible.
More...


100 percent automation....Do you mean that the program makes trades based on certain parameters you have given it? To be traded independently without intervention?

Are you afraid that the program might get 'stuck' at a critical moment or make trades outside of the boundaries you set going caddywonkers? Or does it just search for potential trades and alert you to them ? Is this a program you purchased and modified or did you create it from scratch yourself (with the assistance of programmers) ?


Thanks
 
1. Do most ES traders only trade index futures? Any other commodities/contracts?

I trade ES exclusively. Mastering one single market is the way to go, IMO.

2. Are you trading the same instrument(s) everyday? (I don't see this being viable, but just curious)

Yes. See above.

3. Can I do well trading 1-2 times per day? (I hate scalping)

Of course. You can buy the day low and sell the day high or vice versa. That's one trade per day. Will you be able to do that consistently? That's a different question.
 
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