Questions about trading Emini S&P 500 Futures

[Scataphagos]

How would you suggest using them? I'm not disagreeing, just curious.

Complex answer. Basically the generally understood, "buy low in the range, sell high in the range", is mostly correct but with more details than I could explain here. Makings of a seminar topic. Problem is that the "basic understanding" application has enough warts to be problematic until one's knowledge base is up to speed.

Bottom line, bull and bear markets are not mirror images. Often works great, sometimes doesn't. Used properly, failed trades are usually not a biggie.

Do you know of George Lane?

 

[maxinger]

1. Do you guys trade ONLY during regular market hours (8:30 AM to 3:30 PM ?) or are you also okay to trade during non-regular hours (6 PM to 830: AM) ?


ES could be quite tradable during non regular hour.
But I find NQ is much more tradable during non regular hour then ES.

why ? it could be President Trump's treet, earnings announcement etc.
by the way, I trade all asian, eur, and US sessions.


3. Do you guys use options-on-futures to hedge your futures positions ?
No. I set stop loss. once stop loss is hit, then position is closed.


4. From a strategy standpoint, is it possible to rely on the technical indicators for ES ?
I use zero indicator as it is useless and worthless and hopeless and deceiving.
all my entry is based on price action, on chart pattern.

 

[etradeqeko]

Hi guys, for the options hedging question and the replies given above saying futures contract + option-on-futures hedge could be simply replaced by a option buy: the main
concern around this is the decay of the option price as it approaches the end date of the contract.

What do you guys think of the combination of 1 futures contract buy + 1 covered call write.

 

[traderjo]

Hi guys, for the options hedging question and the replies given above saying futures contract + option-on-futures hedge could be simply replaced by a option buy: the main
concern around this is the decay of the option price as it approaches the end date of the contract.

What do you guys think of the combination of 1 futures contract buy + 1 covered call write.

1) Yes the decay is always there so whether you purchase a protective PUT or long a CALL time is your enemy
2) Covered call writing using Futures + Option on futures as compared to Stock + Stock option is a valid strategy
How ever the extra leverage could be a double edged sword in Futures means you could be taking extra risk!
If it works great return on capital say for example you do this on expiry day of the options contract Monday / Wed or Friday
Since both trades will be closed within a "trading day " I am assuming day trading margin on the Futures position wil be applied So if you find a broker who allows that + option writing
and cross margins
Then $1000 for 1 ES contract
Soled Call yield = 2-3 point for a day = $100-150
10-15% return in a day! on capital
Downside risk lot more than 1000 though

 

[AAAintheBeltway]

Do you know of George Lane?

LOL, of course, the father of stochastics. Back in the day I had his tapes on using stochastics. Very good stuff.

 

[Scataphagos]

LOL, of course, the father of stochastics. Back in the day I had his tapes on using stochastics. Very good stuff.

You seem to question the value of range indicators like %K and RSI. Perhaps you should look into them more carefully. My view is that they have more value than most think (but less than most hope).

Lane saw so much value in the Stochastic Oscillator, he built his entire career around it. Must have more value than most think if he was able to justify that. And like I say, "understand the tool and use it properly". Most don't.

Most times, the Stochastic play is coincident with other TA structures. Sometimes it's the only justification for a trade. When it's "working", it correlates well with good trades. When it's not, it still doesn't get you into trouble unless you screw up.

 

[_eug_]

You seem to question the value of range indicators like %K and RSI. Perhaps you should look into them more carefully. My view is that they have more value than most think (but less than most hope).

Lane saw so much value in the Stochastic Oscillator, he built his entire career around it. Must have more value than most think if he was able to justify that. And like I say, "understand the tool and use it properly". Most don't.

Most times, the Stochastic play is coincident with other TA structures. Sometimes it's the only justification for a trade. When it's "working", it correlates well with good trades. When it's not, it still doesn't get you into trouble unless you screw up.

What are your thoughts on the MACD?

 

[Scataphagos]

What are your thoughts on the MACD?

I am not a fan of MACD. I know it's popular, but I bristled at it when I first heard of it. MACD is a "2nd derivative of price". If you can't get closer than that to good trades, you've got a tough row to hoe.

That said....MACD will get you in on what turns out to be a "long, strong move", and that's a good thing.... except you won't know that's the case except in hindsight. It will give the same indication fairly early on for lesser and even false moves.

IOW... MACD seems good when it catches the "big move"... somewhat late, of course, but still correct. The problem is when it appears to "indicate/confirm" when the move turns out to NOT be "big and honkin'".

 

[AAAintheBeltway]

You seem to question the value of range indicators like %K and RSI. Perhaps you should look into them more carefully. My view is that they have more value than most think (but less than most hope).

I don't think we are disagreeing. In chop, they will give some brilliant signals. Oscillator divergences are powerful, if you know how to use them. The problem is newbies think you can just buy and sell when the red line crosses the blue line but we both know that will not work over time.

 

[Scataphagos]

I don't think we are disagreeing. In chop, they will give some brilliant signals. Oscillator divergences are powerful, if you know how to use them. The problem is newbies think you can just buy and sell when the red line crosses the blue line but we both know that will not work over time.

True... that's why noobs claim, "they don't work".