Swing trading futures.

L

lkh

I am a stock swing trader exploring the possibility of switching to swing trading the ES and NQ. There seems to be many benefits but i am looking for the drawbacks. Does anyone else do this? What are your experiences?

Benefits:
60/40 taxes.
Trade more hours.
Less commission.
No specific stock risk.



Drawbacks:
Commission to roll over every cycle.
You lose the spread on every rollover.
 
Quote from lkh:

I am a stock swing trader exploring the possibility of switching to swing trading the ES and NQ. There seems to be many benefits but i am looking for the drawbacks. Does anyone else do this? What are your experiences?

Benefits:
60/40 taxes.
Trade more hours.
Less commission.
No specific stock risk.



Drawbacks:
Commission to roll over every cycle.
You lose the spread on every rollover.
More...
Keep your leverage reasonable and you should do fine.
 
Quote from lkh:

I am a stock swing trader exploring the possibility of switching to swing trading the ES and NQ. There seems to be many benefits but i am looking for the drawbacks. Does anyone else do this? What are your experiences?

Benefits:
60/40 taxes.
Trade more hours.
Less commission.
No specific stock risk.

Drawbacks:
Commission to roll over every cycle.
You lose the spread on every rollover.
More...

I don't know what your trading methodology is nor do I know if you've looked at other futures instruments for swing trading...

ES and NQ will produce very few swing trade signals during the year and most (not all) are related to seasonal tendencies and is the only time I swing trade them because the odds are very high the swing trade will result in a nice profit.

Here's one example of the above seasonal tendency...

Between Oct 26th - Nov 14th the S&P had not had a losing duration since 1990 and has profited on average about +31 points each year in that duration.

However, if your merely talking about holding overnight positions (one night only) and not talking about holding many trading days or weeks...

ES and NQ are suitable for such (one night holds).

My swing trading of the Eminis is based upon the 60min, 120min and daily charts and I don't get many trade signals per year via such...

Mainly because of those seasonal tendencies I only swing trade in.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 
Mark,

I liked your post. In your opinion, what are the drawbacks to swing trading futures? (and what is the best way to set things up - ie: do you worry about margin percentages you have to pay the brokerage co) for holding overnight - is that a problem for you?

Thanks,

Jon

PS: As you can see I'm new to trading futures. I trade emini daytrading, but seem to do better swing trading etfs and recently have gotten into swing trading options - looking for a big downturn in the market between Sept 09-Dec10 - based on McClellan newsletter and Gary Schilling
PSS: Any opinions you have would be very welcome
 
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