What is it about futures that make them harder than stocks?

Quote from intradaybill:

Futures is a pure zero sum game (before commissions). You must be really smart and hard working to make money trading futures. Stocks are not a zero-sum game for value investing. Some really dumb people have made money in stocks because they were at the right place at the right time or new the right people or were plainly lucky. Luck plays little role in futures trading.

Those that think leverage makes futures harder is because they confuse margin and leverage. You can trade futures without leverage at all. Same with forex. It is the fact that in futures trading all there is, is wealth redistribution from inexperienced traders to smart and experienced. I knew of a security guy in a college that bought 10k shares of MSFT in 1987 for about $1 and forgot all about. He took delivery of the stock certificates and kept them in a safe deposit box. He woke up one day during the dot.com bubble and realized he was making 1M after hearing on TV that MFST stock split or something. He bought MSFT because a computer science professor told him that a small company MFST would become a big company one day because of some things called PCs they were buying for the college to replace VAX machines . Right place, right time, right people.
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Thats a good point about futs being zero sum and stocks not. This doesn't really explain the fact that an average futures chart doesn't really look any different than the avg stock chart. They both zig and zag, have small range days, big range days, trend days, 2 way days, you get the idea..
 
Here is a chart of the ES and MMM on the same day.

Can you tell which is the ES?


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Audi, your problem is you WANT the answer to be that yes, they are harder. The reality is, they are not. It just takes a certain level of discipline and patience maybe most don't have. But if you develop it, futs are not that hard. There are just fewer opps per day than someone who scans 100's of stocks looking for biggest ranges or most active.
 
I think they're more or less the same, but given my edge I think stocks are a lot easier. There's just a lot more information to use when trading stocks such as market breadth, etc. Yes I understand you can use that information on the ES, but I take futures to mean all futures markets... ie. oil, natural gas, etc. Also, I can confirm that the leverage makes a noticeable difference. I am a decently profitable trader in the equities markets but I have never done well with leverage (use of margin, options, etc). I'm not sure why, but keep in mind that options and futures add an additional layer of complexity on what at the very core is fluctuations in supply vs. demand.
 
I've traded stocks and futures for 10 plus years and theres no doubt the reason people fail in futures is they try to scalp them all day long AND THATS ALMOST IMPOSSIBLE WITH RETAIL COMMISSIONS AND SLIPPAGE. also throw in 90% of retail traders trading 5-10 contracts with a 10k account and 1 slip up and they're history. i've done very well in futures taking several hours to several day trades. when i tried to scalp them it never worked as i had 2-4k commish a day.take a longer intraday view with wider stops and you will do better.
 
Quote from jnorty:

I've traded stocks and futures for 10 plus years and theres no doubt the reason people fail in futures is they try to scalp them all day long AND THATS ALMOST IMPOSSIBLE WITH RETAIL COMMISSIONS AND SLIPPAGE. also throw in 90% of retail traders trading 5-10 contracts with a 10k account and 1 slip up and they're history. i've done very well in futures taking several hours to several day trades. when i tried to scalp them it never worked as i had 2-4k commish a day.take a longer intraday view with wider stops and you will do better.
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I completely agree with cost being a BIG factor in failure. Its amazing how quickly that shit adds up.
 
Yes Audi, futures are harder to trade.

Rosko doesn't want to discourage you as you will be his main source of income when he trades :)

Seriously though, volatility and leverage will usually cause the newbie as well as the veterans to blow a few accounts before they are successful, if they last long enough.
 
Are we talking intraday or position trading here?

You can never money manage your long term positions well with stocks. The gaps will kill you. On the other hand I think that most trading do better with stock than ES over the long haul (esp. during a bull market), since they can withstand large swings in volatility without ever owing their broker anything. Most do not have the psychological composure to keep leverag low in fx and futures.

If you position trade, ES and fx are MUCH less risky than stocks assuming that you keep your order sizes low. Stocks can drop to zero any day and you'll always be last to know.
 
most traders are not mature nor disciplined enough to deal with a 24hour market

they get caught in bad trades at the exact moment of illiquidity and get hammered
 
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