RTY vs ES for trending strategies

[EminiMizer]

I have been using the ES to create strategies for both trending and sideways markets. I have never really considered the RTY, but on first look the RTY appears to trend better than the ES, at least in the current market environment.

Does anyone feel the RTY has advantages for trending strategies?

Thanks for the input.

 

[CannonTrading_Ilan]

time frame you using?
day trading or swing?

 

[Axon]

I've found it pretty spot on lately for intraday shorting on the 5 minute chart. /NQ for longs

 

[EminiMizer]

time frame you using?
day trading or swing?

Sorry- my bad. I am using 12-tick Renkos with the Ichimoku Cloud for trends. Reversals are 2:1, or 24 ticks.

For trading ranges I am using the Lizard Trader Auction bars with 5 minute trading timeframe and 60-minute higher timeframe, along with Session Pivots.

Thanks for the reply.

 

[CannonTrading_Ilan]

Both Renko at 12 and range bar at 23 looks smoother than the other indices from a quick glance today! My biggest issue was always the profit taking...good on stops, good on entries, been struggling with profit taking....

 

[Real Money]

I have been watching RUT forever, it was actually my favorite for a while.

One thing that you have to be aware of are the weightings in this index.

It's something like healthcare, financials, industrials, and tech all have similar weighting and make up roughly 60% of the index. It's much less tech heavy than NQ and ES.

It's a broad sector index. For this reason, it is a favorite hedge against the Dow. Big prop firms will buy DJX and sell RUT for huge size to get a relative value trade going.

This is actually a pretty big deal.

The dow is more liquid than the russell, but neither of them are nearly as liquid as the ES. This means they have to trade this thing round the clock in order to move volumes.

Every tick, every bounce, and all of the market action is being worked over by the DJX/RUT spread paper (orders). This is the original US cap' spread.

I like that trade, but not really RTY outright, so much. RTY can make good money, and it has a cool multiplier, 50*RUT. Also, because it is less liquid the market makers in the futures basis have to trade very aggressively - which can help you get a read on the market.

Can get all of the sector tickers here
https://www.americanbulls.com/SearchList.aspx?lang=en&SearchText=^R2RGS
and you can find correlated instruments here
http://www.market-topology.com/correlation/IWM?etf=0

 

[wrbtrader]

I have been using the ES to create strategies for both trending and sideways markets. I have never really considered the RTY, but on first look the RTY appears to trend better than the ES, at least in the current market environment.

Does anyone feel the RTY has advantages for trending strategies?

Thanks for the input.

Backtest your trade strategy on both Emini ES and RTY and use the statistical results to determine which is better in trending markets / sideways markets.

Seriously, unless you think those answering your question are using your trade strategy to give answers to which "appears to trend better" or "anyone feel...has advantages"...

Too much guessing and feelings involved. It'll be best to use the results of your own trade strategies to give you the answers. It'll be much more reliable.

wrbtrader

 

[CannonTrading_Ilan]

Decided to get another point of view from my fellow broker, Joe Easton:
In my opinion the RTY moves similarly to the ES. When ES has sideways days so does RTY. When ES trends so does RTY.

Because the overall size is larger on ES than RTY there will naturally be more push and pull or choppiness. The same as YM and ES, since YM has a higher value there is more wiggle. Nonetheless they both have similar days, just trading RTY will not avoid the sideways days.

 

[EminiMizer]

Backtest your trade strategy on both Emini ES and RTY and use the statistical results to determine which is better in trending markets / sideways markets.

Seriously, unless you think those answering your question are using your trade strategy to give answers to which "appears to trend better" or "anyone feel...has advantages"...

Too much guessing and feelings involved. It'll be best to use the results of your own trade strategies to give you the answers. It'll be much more reliable.

wrbtrader

Good point. Thanks.

 

[EminiMizer]

Decided to get another point of view from my fellow broker, Joe Easton:
In my opinion the RTY moves similarly to the ES. When ES has sideways days so does RTY. When ES trends so does RTY.

Because the overall size is larger on ES than RTY there will naturally be more push and pull or choppiness. The same as YM and ES, since YM has a higher value there is more wiggle. Nonetheless they both have similar days, just trading RTY will not avoid the sideways days.

Thanks for the comment. Since the strategy involved Renko bars, it may be that the more chop with the ES showed up as more whipsaws. A larger brick size could solve this, but with more risk. I'll check it out with some backtesting.