Trading multiple markets or one market ?

N

neutrino

I wonder if there are people here that swing trade (2-3 days to a couple of months) multiple markets, not just one. For example US equities through S&P500 (SPY or futures), corn, sugar, crude oil, gold, perhaps even some major currencies.

I am thinking that if one has a good grasp of technical analysis and has traded one market with consistent good results, then he can improve his performance by applying his skills on more markets. The more uncorrelated the markets, the better.

Now, I understand that not many individual traders will be able to do this simply because of insufficient capital, because the commodities futures are quite big. I have personally only traded the mini corn and wheat contracts, besides stocks. But now I will have access to much bigger capital (opm) so I can trade more markets.

So what I am basically asking, is whether the traders with sufficient capital prefer to focus on one market (say index futures) or multiple markets?
 
If you trade using a fully mechanical system which runs on a computer, it's easy to apply the system to many different markets simultaneously: the computer does all the work. If you apply it to "N" number of markets, your resulting equity curve is a lot smoother and less gut-wrenching to trade, since the system's equity curve is the average of the individual market equity curves, times N. As you already know, the average of a bunch of items is a lot smoother than the individual items themselves.

As you point out, this requires a larger amount of capital. It also requires computerized systems and the willingness to trade them.
 
Quote from neutrino:

I wonder if there are people here that swing trade (2-3 days to a couple of months) multiple markets, not just one. For example US equities through S&P500 (SPY or futures), corn, sugar, crude oil, gold, perhaps even some major currencies.

I am thinking that if one has a good grasp of technical analysis and has traded one market with consistent good results, then he can improve his performance by applying his skills on more markets. The more uncorrelated the markets, the better.

Now, I understand that not many individual traders will be able to do this simply because of insufficient capital, because the commodities futures are quite big. I have personally only traded the mini corn and wheat contracts, besides stocks. But now I will have access to much bigger capital (opm) so I can trade more markets.

So what I am basically asking, is whether the traders with sufficient capital prefer to focus on one market (say index futures) or multiple markets?
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Depends on how you gather information, apply your trading techniques and form an executable hypothesis for that particular market. WE ARE ALL DIFFERENT, some use Jack Hershey (had to say it :D ) others need just 2 words in a magazine to trade. Also if its going to be a pure technical based trade excution, remember to check price action or correlation/s of same and similar instruments on other exchanges as well, e.g Sbeans would look at Tokyo, Johannesburg and Chicago (different specs, but all beans). Focusing on multiple markets is great if you like a quasi GlobalMacro style and are OK with processing a lot of information at once versus being a screen jockey. I personally turn into a screen jockey when there is plenty +++ volatility. IMHO greatest advantage is that there is always something silly happening in some market that you can capitalise on. Currently its Eastern European REITS and MiddleEast infrastructure.....

Whatever you do remember to do your HOMEWORK and not post on ET looking for contract expiry dates:p
 
Trading equity for ten years in the last few months i have been trading the futures. I don't think i will give up on equity as i have been successful with it but in the black and white picture my futures trading is more than 2x my equities gains since i started.




If you know how the markets work and are good with your technical analysis you should give it a try and play more than one market.
 
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