Stock Index Spread Trading Opportunities

at 9:15pm New York time tonight...I put on a demo trade of:

3 long NQ vs 2 short ES

also set my platform at a "Trade out" at $100.00 profit or $200.00 loss...let's see if any is hit...
 
increasenow, unless you have some reason to spread trade, they often don't do what you expect.

my short little experience with spread trading indicies basically came down to this conclusion: on up trending days, buy the higher volatility index and short the lower one, for example buy tf sell ym. i quickly realized it was a circular relationship in that if i could identify the trending days i wouldn't need to be doing spread trades anyways.

the other way to look at it is after a large run-up (you feel the market is overbought and want a pullback) sell the higher vol and buy the lower vol, but this goes right back to the circular relationship.

i know spread trading has huge potential, i've just never been able to put the time into it to generate profitable trades.
 
Quote from auspiv:

increasenow, unless you have some reason to spread trade, they often don't do what you expect.

my short little experience with spread trading indicies basically came down to this conclusion: on up trending days, buy the higher volatility index and short the lower one, for example buy tf sell ym. i quickly realized it was a circular relationship in that if i could identify the trending days i wouldn't need to be doing spread trades anyways.

the other way to look at it is after a large run-up (you feel the market is overbought and want a pullback) sell the higher vol and buy the lower vol, but this goes right back to the circular relationship.

i know spread trading has huge potential, i've just never been able to put the time into it to generate profitable trades.
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thanks Man...kinda says some of the things I was thinking...
1-sounds like you trade all index spreads at the 1 vs 1 ratio?
2-would you put TF always as the higher volitility and what as the lowest?...YM?...or how do you figure the highest and lowest volatile index?...thanks
 
Quote from increasenow:


1-sounds like you trade all index spreads at the 1 vs 1 ratio?
2-would you put TF always as the higher volitility and what as the lowest?
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like i said, i never really had the time to get into the details, but i usually tried 2 tf : 1 ym and assumed tf was most volatile. the 2:1 ratio worked pretty well.

theoretically you could create any ratio you wanted using index etfs (qqqq, spy, dia, and iwm) because of the finer 1 share granularity, where 1 tick can equal as little as 1 penny, instead of $10.00 or $12.50. futures would work too, but the math (and commission) is a little different.
 
Quote from increasenow:

at 9:15pm New York time tonight...I put on a demo trade of:

3 long NQ vs 2 short ES

also set my platform at a "Trade out" at $100.00 profit or $200.00 loss...let's see if any is hit...
More...
got the $100.00 profit...currentyl demoing:

1 ES short vs 1 NQ long
1 ES short vs 1 YM long
(trying to not have to do so many contracts I.e 3 v 2

oh yea..last night, did a short gold vs long silver...got profit out of that overnight...

opened up another short Gold vs long Silver trader to see...
 
Quote from Gabfly1:

Unless the equestrian is truly expert, why would he try riding two horses at the same time?
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Love the analogy.

increasenow, another place to look is spot fx prices vs futures. again, haven't had time to look into these. take a look at the attachment.
 

Attachments

you know...the more I look into any type of spread trading...it seems as if there is the lowest risk, most profitable opportunities...especially since you do not have to sit at screen all day
 
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