Trading Futures vs. Stocks vs. QQQ

i think people should always start with fully paid for ( no leverage ) stock trading and small size. Once they can come up with their own trading ideas and have a good loss cutting discipline maybe they can move onto other things. I can tell you from my personal experience that going to options too soon can be a disaster, and i'm sure the same is true for futures.
 
Quote from prox:

Futures are generally more technically oriented. People consider the futures to be more of an elite group of traders than those who trade stocks. Patterns, pivot areas, trendlines and so forth tend to bear more significance than stocks. Call it , if you will, traders "communicating" to other traders in their own pseudo language.

Stocks are generally more emotionally based and don't necessarily follow any technical rules of movement.

The exception to stocks would be a handful of the most liquid of stocks, that do believe technically. QQQ would be the prime example, as it is the most heavily traded stock every single day.


Therefore, based on your experience level.. you work your way from trading moderate volume stocks to higher volume stocks, to the QQQ, and then to futures.
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Thanks,

But why not to start with QQQ and then futures.
QQQ represents broad market, so it's easier to follow and apply TA, than chasing other stocks?

And second I thought that most liquid stocks they are more emotionally based, etc. They react first to the news and then market follows. For example (MSFT, INTC, etc.)

In my opinion less liquid stocks follow more TA.

Can you explain?

Appreciate your answer!
:cool:
 
Quote from Merc:

:cool::( :confused:
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Depends.

If your trade involves an evaluation of a company's or sector's fundamentals, you trade individual stocks.

If your trade is based upon "money wants in/out of the market", the most efficient way to play it is with ETFs or Futures. They are effectively the same, but futures allow greater leverage. (You could, of course, trade a "basket"... by why bother?)
 
Quote from prox:

Therefore, based on your experience level.. you work your way from trading moderate volume stocks to higher volume stocks, to the QQQ, and then to futures.
More...

I'd agree. The only thing I might add is that, as soon as you're comfortable with your skills trading QQQ/SPY in very small lots and are ready for the equity impact of equivalent moves in the futures, move to those futures (QQQ/SPY equivalents NQ/ES). As detailed elsewhere on ET I'm sure, you'll enjoy even more orderly (less noisy) price patterns, virtually instant fills, lower commissions, and much nicer tax treatment.
 
Quote from gnome:



Depends.

If your trade involves an evaluation of a company's or sector's fundamentals, you trade individual stocks.

If your trade is based upon "money wants in/out of the market", the most efficient way to play it is with ETFs or Futures. They are effectively the same, but futures allow greater leverage. (You could, of course, trade a "basket"... by why bother?)
More...

I trade stocks based on TA patterns & trend following.
Is that what you mean by "money wants in/out of the market"?

Never traded ETFs or Futures, because my concern is less trading opportunities than with variety of individual stocks.
But on other hand screening and chasing individual stocks is really pain in ass.

Can you explain what is "trade a "basket" ... but why bother?"

I understand that before Futures I have to attain certain trading mastery, but for now I am torn apart and cannot decide either trade individual stocks or ETFs.

Has somebody else came across the same dilemma.
Thank you all for your help!!!

:)
 
Quote from Merc:



Thanks,

But why not to start with QQQ and then futures.
QQQ represents broad market, so it's easier to follow and apply TA, than chasing other stocks?

And second I thought that most liquid stocks they are more emotionally based, etc. They react first to the news and then market follows. For example (MSFT, INTC, etc.)

In my opinion less liquid stocks follow more TA.

Can you explain?

Appreciate your answer!
:cool:
More...

I suppose the concept is that the better stock traders trade the QQQ , and therefore your competition is more difficult if you're not up to par.

One little thing I used to do was check out the Yahoo group for any particular stock.. the more "rooting" and "complaining" for stocks I see , the more interested I am in trading that stock. There are still a large percentage of people with no concept of technical analysis, who trade emotionally -- get shaken out at the lows , keep buying at the buying climaxes. Those are the people you want to exploit. Therefore, "mom and pop" buy and pray stocks are a good place to start for someone just beginning with TA.

All stocks are very news oriented with the fear of an huge overnight surprise report. Emotional based dumping or buying of stocks at any price .. that kind of thing.

For example, simple things like projecting a price target on an H&S breakout, pivot, s1, r1, s2, r2 daily levels, trendlines, fibonacci % pullback areas will usually be significant areas when trading something like the ES or the QQQ .. where everything moves somewhat orderly.

In lesser stocks, people aren't even aware of the pivot levels. They don't know there's a 50% fib retrace level on this last move ...... or they don't even do their homework and realize we're sitting on the 20 week moving average. Therefore, a calculated pivot, S1, S2 levels may just get blown through without any support or retest because people are just dumping stocks at all cost. Likewise, if people get into their buying frenzing, they buy and buy without any awareness that they just bought right into the 200 day moving area
 
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