looking to start trading futures
- Thread starter jroger
- Start date
As a newbie, I would avoid oil and silver like the plague. I don't really follow copper/sugar, so I can't comment on those.
I would look at one of the following:
ES (SP500), TF (R2k), NQ (Nasdaq), 6E (Euro).
If you trade during the US session, one nice thing is that you can find a proxy in the stock world for most of them. This allows you a nice progression from sim to live without needing to do the full contracts.
For example, to go live in the ES, you could use SPY during the US session with say 5 shares to represent 1 ES contract while you work out the kinks. Yes, you will eat more commissions and you need to be properly funded to avoid the PDT, but you can emulate trading multiple contracts while risking $10 instead of $500.
My $0.02
I would look at one of the following:
ES (SP500), TF (R2k), NQ (Nasdaq), 6E (Euro).
If you trade during the US session, one nice thing is that you can find a proxy in the stock world for most of them. This allows you a nice progression from sim to live without needing to do the full contracts.
For example, to go live in the ES, you could use SPY during the US session with say 5 shares to represent 1 ES contract while you work out the kinks. Yes, you will eat more commissions and you need to be properly funded to avoid the PDT, but you can emulate trading multiple contracts while risking $10 instead of $500.
My $0.02
JRoger,
Check out the Daniels Trading website- they have a lot of reference information there for stock traders moving to futures, ebooks, blog articles, resources, etc. You do not have to be a client to access (although I am), and it could be helpful.
I trade part time- evenings and mornings, looking for fairly liquid markets (I swing trade short term patterns)- Euro, Crude, Gold, Silver, Copper, Sugar and sometimes Coffee. Coffee is the least liquid of these, but the others are pretty good re volume.
www.danielstrading.com
regards...Kevin
Check out the Daniels Trading website- they have a lot of reference information there for stock traders moving to futures, ebooks, blog articles, resources, etc. You do not have to be a client to access (although I am), and it could be helpful.
I trade part time- evenings and mornings, looking for fairly liquid markets (I swing trade short term patterns)- Euro, Crude, Gold, Silver, Copper, Sugar and sometimes Coffee. Coffee is the least liquid of these, but the others are pretty good re volume.
www.danielstrading.com
regards...Kevin
If you're a profitable stock trader who knows how to use support and resistance (price action) to trade effectively, and you have strict rules for managing risk, then you should expect the same results with futures plus the advantages that come from trading one or two instruments day after day (you can see the minor and major S/R levels whenever you close your eyes), and from the advantageous tax treatment.
If you aren't a disciplined and profitable stock/options trader, you can expect futures to take you apart. Stock index futures will take you apart more slowly than energy, currency, and silver futures.
As for coffee, sugar, beans, cocoa and such, I prefer to save those for the close of my trading day.
Thanks Kevin i did check some information out on that site.
Thanks, this is pretty much what i was looking for, im very familiar with the spy ETF so i think ill start with the es.
Quote from NoDoji:
If you're a profitable stock trader who knows how to use support and resistance (price action) to trade effectively, and you have strict rules for managing risk, then you should expect the same results with futures plus the advantages that come from trading one or two instruments day after day (you can see the minor and major S/R levels whenever you close your eyes), and from the advantageous tax treatment.
If you aren't a disciplined and profitable stock/options trader, you can expect futures to take you apart. Stock index futures will take you apart more slowly than energy, currency, and silver futures.
As for coffee, sugar, beans, cocoa and such, I prefer to save those for the close of my trading day.
Thanks, this is pretty much what i was looking for, im very familiar with the spy ETF so i think ill start with the es.
Quote from NoDoji:
If you're a profitable stock trader who knows how to use support and resistance (price action) to trade effectively, and you have strict rules for managing risk, then you should expect the same results with futures plus the advantages that come from trading one or two instruments day after day (you can see the minor and major S/R levels whenever you close your eyes), and from the advantageous tax treatment.
If you aren't a disciplined and profitable stock/options trader, you can expect futures to take you apart. Stock index futures will take you apart more slowly than energy, currency, and silver futures.
As for coffee, sugar, beans, cocoa and such, I prefer to save those for the close of my trading day.
+1 great advice. I started trading the ES exclusively some time ago and have never looked back. I'm out of stocks completely. The tax advantages are hard to pass up.
Paper trade for a long time & be prepared to accept paper trading ruin as a relative success.
Just buy 1 KC on the open tomorrow, shut your computer off then turn it back on next Tuesday and take profits. Take 2 days off and do it all over again. PM me and I'll tell you where to send my commission check.
Quote from jroger:
hey guys im looking to start trading futures and would like some input and advice. with experience trading stocks and options what should i expect? i understand margin requirements and leverage but what futures would be best suited for me? the es, silver, oil, copper, sugar?
Thanks!
ES is by far the safest one of those. Copper and #11 Sugar on ICE are very thin and best spread traded in terms of risk management. Oil is an adult swim but manageable in terms of liquidity. Silver (and Copper and Sugar for that matter) are no place for you to be - the market moves and liquidity gaps will smoke you. At least with Oil there is an out within a penny.
Why don't you look at the exchange contract specs along with the past 20 days of trading range and calculate the monetary value of those ranges in order to wrap your head around the risk you are dealing with. While you are on the spec page, look at the performace bond margin requirements under the outright rates tab.
What you will find is that with the ES you can piss away about $500 playing around with one-lots during the course of a trading day trading flat price directional. With those other names you can piss away about $2K playing around with one-lots.