Fully agree with all of this! ES is probably the most difficult of all. Yet I don't know about Hong Kong's HSI - LOL.
But all the ES hype out there was always encouragement to me, because it told me: "Hey, the more hype, the more newbies, the more dumb money." Unfortunately, this doesn't seem to hold well in reality. In reality, all the bigfoots go there, because they know this too, and they fire and bang and arb, swinging much bigger dicks than any of us do, whacking them into the stomachs of the small traders, just throwing their 500-5,000 lot insti orders into the flow in small increments, then pulling them all out at once, in exactly the moment where you really don't need it, scalper or day trader you'll get hurt. This is ES to me.
I remember a day some 2 or 3 months ago, when we (the ES) were looking a dramatic-looking abyss, I pulled a long last minute and thought I'd wait for a good short entry point. Well, it went down and there was no entry point. At some point you fear entering a falling knife, because you know the faders could take longs for a serious rebound (the V-shape thing), so you wait for at least a small discount. The discount never came, at a a very crucial support point, it hardly hesitated, then crashed through. Then came that moment. I met a man whose name I don't know, but I called him "The 250 Million Dollar Man"; Guess what? The tape rolled through to print 20 lines of 250- lots - all apparently sold at below bid (orange print on my tape), all at exactly the same second. I was amazed. I thought, man, 5,000 cars in the same one second! Clearly a single trader (institution), right? I didn't quite think it was another incident of GSCO's boss' cat walking over the "sell 5,000 at market" button, like the earlier fat finger incidents a few months ago. No, I think it was someone consciously selling at support, probably making fat money on breaking it. I think a lot of client's accounts must have been saved or enriched that day by that massive stop, it continued to fall plenty after that.
This large but typical ES event reminded me of Mark Douglas' story of the retired chairman. You know that story, where a firm's new TA expert proudly shows the retired chairman (and many-decade veteran floor trader) support on the soy bean futures, saying the market will definitely stop or even reverse there? And the chairman says "Oh really? That's bullshit!", rings the floor boy and tells him to sell 3 million bushels at the market - Straight after that, the market (logically) falls right through the support and keeps going down. Then he turns around to the terrified-looking TA analyst and says: "Where did you just say price was going to stop? If I can do that, anyone can."
The sheer underlying volume to contract value, and the sheer power of gigantic institutions is something that can only be experienced on the ES (or SPooz), in both pleasant and painful ways, that is if you're still emotionally affectable by the outcomes of trades. If you're a scalper, it is impossible to survive unless you see all your trades ice-cold, no feelings. Now, how many people trying to scalp ES have that, and can sustain that after large strings of losses on ES, possibly caused by insti's? No other electronic index future has such a relative depth or volume, or big-dickers. Australia's SPI trades 10K a day, DAX trades 100K a day. ES has traded over 1,000K (1M) a day.
Yes, I love(d) the ES in a way, too. I love the challenge. I seem to know the players in it, the flow, I've watched it so much. I thought there was no world beyond the ES. But surprise, there is. There is more out there, and saying you can ride the world's most difficult future is great - But why not give up some "difficulty", try a less competitive market and use that "edge" you have to make large profits in that market. I remember how I came back to Nasdaq semi's, after having traded ES for a while. It was like being on holidays. This also motivated me to have a look at other things, like Eurex.
In my case, the hours are are actually very comfortable, but I haven't looked at trading ESTX50 yet. There's clearly less "mad moves", because of the considerably larger liquidity, plus you have the great liquidity. The trade off is that it seems like it has very "dampened" movement compared to the DAX. DAX is leveraged ESTX it seems.
However, you say ESTX50 is "much easier to trade than DAX" for you? Very interesting. Could you give us some insights why?
It seems that we agree on a lot of things.
Scientist.
