Tradesight
- Thread starter TradesightChris
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Quote from apak:
so what about ES
I also mentioned ES
why don't you talk about ES
I WON't LET YOU OFF THE HOOK SO EASILY wormy
Yes, ES is the most liquid futures contract, and I trade futures daily, although it isn't my point of concentration because there aren't as many setups of the type that I look for in the futures. I trade about 60% stocks, 20% futures, and 20% forex. Forex is typically (although not lately) also more liquid than the average stock.
But, the reality is that futures and forex aren't for everyone. There are far more people statistically that are interested in trading stocks only because they here about leverage and margin in futures and forex and are afraid. I don't agree with their thought process, but I can understand it. So for those people, the liquidity of the futures market is moot.
The reality is that stocks are easier because you can spot patterns from 4500 stocks and then use the futures to confirm market direction to increase your probabilities of success.
Chris:
Thanks for sharing your knowledge.
I have one comment on this. I see a lot of people running some kind of scanning software day after day on the entire collection of NYSE/NASDAQ stocks looking for their "holy grail" trading patterns. But in reality, out of the maybe >10000 stocks available for traing only less than a few hundreds are worth trading at any given moment. I think they are wasting their computer resources and network bandwidth to do this kind of scans. If they must scan, they should probably narrow down the list and revise it once a month or something.
Some educational outfits (who should be name-protected
) advocate eye-balling all 100 stocks in the Nasdaq-100 index every minute of a trading day to look for tradable patterns. I thought: ulch! What a waste of brain power.I am a believer in that most of the stocks (maybe 80%?) - 30% of the price move is due to the broad market, 30% of the price move is due to the sector, only 40% of the price move is it's own. So if you can trade the index futures (ES for example) well, you should be able to trade any liquid stock well. And if you can focus on trading the futures well, you probably don't need to trade individual stocks.
Personally I only trade 5 stocks (and ES futures) day-in, day-out. These 5 stocks alone have provided me a line for a good living. SPY/GS/AAPL/RIMM/SKF. With the recent downruns of AAPL (from $200 down to $90), RIMM (now under $50 from $140) and GS (used to be $240 now $62)... only SKF is left worth trading. LOL!
Quote from Bolimomo:
Chris:
Thanks for sharing your knowledge.
I have one comment on this. I see a lot of people running some kind of scanning software day after day on the entire collection of NYSE/NASDAQ stocks looking for their "holy grail" trading patterns. But in reality, out of the maybe >10000 stocks available for traing only less than a few hundreds are worth trading at any given moment. I think they are wasting their computer resources and network bandwidth to do this kind of scans. If they must scan, they should probably narrow down the list and revise it once a month or something.
Some educational outfits (who should be name-protected
I am a believer in that most of the stocks (maybe 80%?) - 30% of the price move is due to the broad market, 30% of the price move is due to the sector, only 40% of the price move is it's own. So if you can trade the index futures (ES for example) well, you should be able to trade any liquid stock well. And if you can focus on trading the futures well, you probably don't need to trade individual stocks.
Personally I only trade 5 stocks (and ES futures) day-in, day-out. These 5 stocks alone have provided me a line for a good living. SPY/GS/AAPL/RIMM/SKF. With the recent downruns of AAPL (from $200 down to $90), RIMM (now under $50 from $140) and GS (used to be $240 now $62)... only SKF is left worth trading. LOL!
Actually, statistically, it's more like 60% of a stock's movement is the broad market, 30% is the sector, and only 10% is the stock itself. That's why by screening for more liquid stocks, analyzing the futures, and then focusing on the stronger (or weaker for shorting) chart patterns, you'll learn to do well. I would say that about 80% of my stock trading is in about the same 10 or so stocks (AAPL, RIMM, GOOG, but also stuff like AMZN, EBAY, KLAC, GS (lately)), etc. At the same time, my top short idea today was ATVI short under 10.26, which we followed down to under 9.80 and closed out under 10 for our final stop out. Why ignore a textbook pattern that is such a high probability trade when it is there?
In terms of running screens, I do run five different screens that I've written most nights, and these generate between 100-400 stocks that I flip through on average to find anywhere from 4-20 (usually around 8) picks for the next day. That's my basic trading ideas off of the daily charts. Then when the market opens, you have know how to react to gaps and general market direction as to whether those trades are supported (if they even trigger), and then still look for more intraday trading like AAPL, RIMM, etc. I think if you just set out every day to trade the index or just to trade AAPL or just to follow daily chart patterns, there will be certain days where these will trigger appropriately and work, while other days they won't, so instead of limiting myself to just one flavor or variety, I prefer to leave all avenues open, which is what we do all day in our Trading Room.
The reality is that out of 10,000 stocks, over half will never come up on a screen when you look for a certain amount of volume. It really comes down to maybe 500 stocks that ever come up, 50 that come up regularly, and then the 10 that I trade the most. But just trading the futures is way too limiting for me. Right now, I might be trading a lot of AAPL, RIMM, and GOOG, but in three years, it will be different names, just like 8 years ago it was MSFT (yuck now), INTC (more yuck), CSCO (eek!), DELL (why bother), and...hold on...WCOM (new traders scratch their heads wondering what that is). Successful traders learn to trade period because you'll want to trade new stocks in 3 years that act like AAPL, RIMM, and GOOG behave today.
The futures are definitely a nice market to trade, but the issue with the futures is that many people don't have a good enough handle on ALWAYS keeping stops to not eventually get themselves hurt, and I do think it is somewhat limiting. I cringe when I see someone say that they did 75 trades in the ES and made $550. Nice that they made the money, but I did 2000 shares of ATVI on my trigger today and made more than that in the one trade, with very little stress.
But, no doubt, I believe all markets are interesting, and of the traders that I work with, the ones that trade the most variety are the most successful. This is because technicals ring true no matter what you are trading, and also because the more you watch, the more you start to see where to go to make money.
No he didn't, and you're the joke, bud. Here, I'll prove it. Offer something constructive on these boards. Anything. Let's see what you can do to prove you aren't a tool by offering something useful to people to help them make money in the markets.