What's the best to trade?

[riskfreetrading]

Quote from ourson:

Hello everybody,

I am a Newbie and am also very much interested in finding which instruments are the best to trade. To be honest, Forex seems appealing and fees and commissions are lower than for equities and futures (although I might be very much wrong....) . What would you recommend for a newbie such as myself to start with?

Thanks in advance for all the feedback.

Good trading to y'all.

Ourson

I was going to recommend Forex for newbies due to the reasons you mentioned, but also, and mainly, for another reason.

It is actually the only instrument I know of where you can start small, and trade with a size as small as $1. I may sound strange to state, but I think if you can trade your money in smaller sizes you can scale your in your trade, and since there is no fixed cost, it gives the trader an advantage.

If you follow the trend, then you can buy on retreats, and if you are not yet skilled at timing the entry, or do not want to spend too much effort on it, then you can build a pyramid to scale in your position size.

I am writing about this in my blog, and in a long thread on E/J. the blog is http://www.financialtraders.blogspot.com/

In there I show my trades in a real-time, and also charts containing my entries (with scaling). The charts will tell more about what I do than me explaining it here.

 

[syspool]

I use Tradestation's charts and also trade some futures with them. And I use Interactivebrokers to trade futures and forex.

At IB's website you also find the margin requirements:

http://individuals.interactivebrokers.com/en/trading/marginRequirements/margin.php?ib_entity=llc

Should this link not work go to
- Interactivebrokers.com
- Individuals
- Trading --> margin
- Futures

Happy trading, Felix

 

[youngtrader]

Spreads man.......learn the fundamentals and seasonal patterns of any physical commodity out there and just trade the spreads. Also more forgiving than outright positions.

 

[Jayford]

Coming from someone who has traded damn near everything, this is what I would suggest:

If you wish to trade futures, go with small contracts, or those that have a moderate average daily range.

If your underlying interest is;

equities, then YM (to start).

interest rates, then ZN.

I would not start out trading gold or crude. Both can have huge spikes, and trade pretty choppy, although you can make money in them really quick.

Forex. If you wish to day trade, don't start off with currencies. They trend really well over the longer term, but are often a choppy nightmare during shorter time frames. It is true that you can start off with tiny amounts in forex, but you might as well just paper trade if you are going to that cause you won't make any money that way. I personally prefer currency futures over forex, but if you go the forex route, I'd recommend going with a broker that charges a commission vs one of the many bucket shops that offer "free" trading. The commission firms do not take the other side of your trade, and will give you the best possible price, so the spread is tighter. More importantly, they will FILL YOU. The bucket shops will not if it is not in their interest to do so.

I'd say really focus on YM, with ES running next to it (and maybe NQ). At the same time maybe trade ZN, with ZB running next to that. ZN and ZB move identically, but ZN has a smaller range about 90% of the time. (its the 10 yr note, while ZB is the 30 yr bond). Also, there is a very strong correlation for ZB/ZN to move dead opposite equities, and often one will lag the other, giving you a brief period to get a really good price on the slower one. I do this all the time.

Feel free to PM if you want. I've been at this for a few decades now, and always enjoy the teaching aspect of it. Good luck.

Jay

 

[ajna]

Quote from youngtrader:

Spreads man.......learn the fundamentals and seasonal patterns of any physical commodity out there and just trade the spreads. Also more forgiving than outright positions.

Youngtrader,
Any recs on reading material to learn how to trade commodity spreads?
st

 

[womblevader]

Jay

Good informative post. Thanks.

Steve

 

[riskfreetrading]

Quote from ajna:

Youngtrader,
Any recs on reading material to learn how to trade commodity spreads?
st

I have a list, and will post it later here or on my blog. I am now away from home, and the list is at home.

Spreading is an important skill to learn.

 

[1000]

Start with and stick with YM, it's the most forgiving market for both longs and shorts, with bulk on either side.

If you can master YM at the 20dma with 2sd bollinger bands, you're made, 'cos all you then have to figure out is how much risk to take, and that comes with practise.

The nicest spread is between the 20dma and 20ma on the 60minute chart of YM, try it, it's fun to trade, or if you really get into it, try the 1minute 200ma and the 20ma 60minute spread.

 

[Traber]

^^^ Thanks for the reply.

 

[Charly]

Quote from 1000:

Start with and stick with YM, it's the most forgiving market for both longs and shorts, with bulk on either side.

If you can master YM at the 20dma with 2sd bollinger bands, you're made, 'cos all you then have to figure out is how much risk to take, and that comes with practise.

The nicest spread is between the 20dma and 20ma on the 60minute chart of YM, try it, it's fun to trade, or if you really get into it, try the 1minute 200ma and the 20ma 60minute spread.

##########################################################
What do you mean by
20dma and 2sd Bollinger please and whicht iem frame are you thinking of please?
Could ypo post a chart showing the
spread you are talking about.
Would be helpful imho.
Thanks.