Question on trading E-mini

A relatively small amount of futures volume is speculative. Most players are using futures against some other derivitive off balance sheet position.

That's absolutely correct. If it wasn't so, it would be close to impossible to make the profit. Market would cease to exist (nobody does anything for free in the markets).
 
assuming someone can already trade - one of the keys to really making money is to obtain the absolutely lowest commision rate that you can - so that if you scratch a trade at zero loss - the commission has a minimal affect on your p&l

far from overtrading being a negative ( an old idea based on high commisions and lack of liquidity) - i feel it is undertrading which will stop you making the big bucks as you will miss too many good opportunities

and before i get beaten up on this - if how you trade works already - great - but i kept trying to develop a strategy based on a low amount of trades - and i was succesful - but then when i was succesful - i realised that the more trades you make, the easier it is to make money - especially as it keeps you in the market and awake! - so i do feel a bit evangelical about this

but key to "overtrading" is a) knowing when to get into the market and when to get out b) having a low commission level
 
Originally posted by Pabst
While true from a mark to market, or clearing house standpoint that futures are a zero sum, that is not the reality in total. Commercials i.e. funds or arbs may take a loss in futures against a gain in cash or spot. A relatively small amount of futures volume is speculative. Most players are using futures against some other derivitive off balance sheet position.
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Someone that has it right, I agee.
 
Originally posted by stevet
assuming someone can already trade - one of the keys to really making money is to obtain the absolutly lowest commision rate that you can - so that if you scratch a trade at zero loss - the commission has a minimal affect on your p&l ...

but key to "overtrading" is a) knowing when to get into the market and b) having a low commission level
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I agree.
 
and before i get beaten up on this - if how you trade works already - great - but i kept trying to develop a strategy based on a low amount of trades - and i was succesful - but then when i was succesful - i realised that the more trades you make, the easier it is to make money

Well, I am not going to beat you up. Perfect example of what you are saying is casino. Miniscule edge, huge turn over. Commission, though, even small can add up fast.
 
Cesko

i tried to make it clear that high volume trading is not instead of expertise in trading, it is part of a trading methodology, which uses expertise in taking high reward/low risk trades - where the commision fee is calcuated into risk/reward - and therefore the level of commision has a direct and calcuable input to the risk/reward
 
Originally posted by stevet
Cesko

i tried to make it clear that high volume trading is not instead of expertise in trading, it is part of a trading methodology, which uses expertise in taking high reward/low risk trades - where the commision fee is calcuated into risk/reward - and therefore the level of commision has a direct and calcuable input to the risk/reward
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Exactly.
 
Understood
Since I used the casino example of the same principle (mathematically), I had to mention the commission. I don't want to be accused of comparing trading to gambling.
 
One further question....based on my strategy of netting 1 pt per day, what would be an appropiate stop loss to place when I enter a position. I'm thinking maybe .5 to .75. Any opinions???
 
Cesko

i always compare trading to gambling - and whats wrong with that - as exactly as you described - casinos make money from gambling by ensuring the risk/reward is with them

and some gamblers use casinos to relax,some are hooked, some might use it to impress a girl ( a sort of arbitrage position ), and some are just plain stupid - all in all - there is always a reason why someone takes the other side of the trade

the great thing with trading is that taking what turns out to be a losing trade is jsut part of what actualy makes you money, if you use risk/reward analysis and trading skill - where as in a casino - over time there are only losses

by the way - i believe we are agreeing!
 
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