Scalping for Profits: Stocks vs. E-mini Futures

G

goldenarm

Hi,

I'd like to start a discussion about a comparison between stock and E-mini futures daytrading. Namely, I'm a scalper who relies solely on price action and very little technical analysis. My trading style has always been to string together a lot of singles to end up with a profitable day. I hardly ever swing trade (unless my position is well in the money and the market is in a strong trend) and never carry overnight positions.

I've heard that the moves of the E-mini S&P 500 are better than the majority of stock moves and one benefit is that you're focusing on only one symbol instead of trying to scatter your attention among several stocks. Added benefits of trading the E-mini are more leverage, lower commissions, no downtick rule for shorts and better tax treatment of capital gains.

I'm thinking of getting back into daytrading and I'm intrigued with E-mini trading although I've never done it. In the past I focused on Nasdaq stocks and some listed stocks. I tended to concentrate on two or three stocks only and try to master the price action based on Level 2 info and time and sales.

Can I get some feedback from traders who've traded both stocks and futures or pure E-mini traders?

Thanks for your input.

goldenarm
 
Quote from goldenarm:

Hi,

I'd like to start a discussion about a comparison between stock and E-mini futures daytrading. Namely, I'm a scalper who relies solely on price action and very little technical analysis. My trading style has always been to string together a lot of singles to end up with a profitable day. I hardly ever swing trade (unless my position is well in the money and the market is in a strong trend) and never carry overnight positions.
More...

Price action is TA I thought.

Added benefits of trading the E-mini are more leverage, lower commissions, no downtick rule for shorts and better tax treatment of capital gains.
More...

Correct. Correct. Correct. Correct.
 
With an individual stock, you have to be concerned about company-specific and industry-specific news. An index usually isn't as sensitive to that because of the diversification. :cool:
 
Quote from IronFist:

Price action is TA I thought.
More...

Yes, but TA lags the immediate price action that you can see from Level 2 and TOS. By the time the pattern manifests itself on the chart, it will be too late to make a decision for my style of scalping.
 
Quote from nazzdack:

With an individual stock, you have to be concerned about company-specific and industry-specific news. An index usually isn't as sensitive to that because of the diversification. :cool:
More...

I'm more concerned with the level of volatility between stocks and E-minis. Since the age of decimalization, the noise has been very extreme in trading most stocks and it's easy to get whipped around and lose a ton in slippage. Is there less noise and better moves with the E-mini?
 
It just depends what do you like better. Eminis have very little slippage when traded in busy times of the day. Take a look at the DOM and you will see how many bids and asks are entered at the time . YM tick is $5, ES is $12.50 . Usual spread is 2 ticks .
 
Quote from IronFist:

Price action is TA I thought
More...

People frequently confuse TA with indicators like RSI, CCI, Stochastics, etc.

I agree. TA is "Technical Analysis". You analyze price and volume purely on their own activity without regard to the company's financials.
 
Quote from goldenarm:

I'm more concerned with the level of volatility between stocks and E-minis. Since the age of decimalization, the noise has been very extreme in trading most stocks and it's easy to get whipped around and lose a ton in slippage. Is there less noise and better moves with the E-mini?
More...

Along that line of thought, it's easier to "push around" an individual stock than an index, i.e. the stock is more volatile than the index. You would expect the eMini to trend more smoothly because of the diversification and the averaging effect, i.e. the index's volatility is the average volatility of its components. :cool:
 
Disclaimer - I AM NOT A SCALPER!!! That said, I do not see much in terms of what you have stated to make you a "scalper?"

There are principles in life. Whether one follows them or not makes a difference! I won't give you any more than what I have given you now, but it SHOULD make a difference...if, you have a brain!

THINK ANALYTICALLY!!!

-gastropod
 
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