What's the best to trade?

[iprph90]

fwiw, if one likes to trade the spy or es, my favorite strategy has been to take the current vix and multiply it by ~3. in the past few months that would approximately correlate to 6.5 - 7.5 spy points. now if the spy drops or rises by the stated amount within 3-5 days and gets close to or hits a major support or resistance level, this would present a very high probability trade to go long if spy drops or go short if it rises. this strategy is perhaps best suited for those who are position or swing traders. of course, because many of us are prisoners of our hard wiring, I have not always been profitable. also, since nothing is a sure thing appropriate targets and exit points need to be followed. I have observed that if there is very little reaction to the move ~16-36 hours on 4 hour chart it may be best to just exit the trade or follow the trend. there may be flaws in what i have mentioned so caveat emptor. if anyone has suggestions or knows how to test with historical vix data, please post. this strategy begs the question, " where was I when the market moved so aggresively within the 3-5 days." answer: 60 work week.

 

[Wallace]

some considerations:

how much capital is available, and, how much of it is willing to be lost

is the trader scalping/intraday oriented or is Day-to-Days trading better

futures accounts can be opened for a minimum of $2,000, with most
intraday margins starting at $500, but overnight margins are as high
as $26K for the Russell 2000, those amounts are subject to change
by both the exchange and broker; also some futures have 'limits' and
some don't, plus there's the risk of 'overloss'

retail online fx pairs trading is attractive mainly because of the low margins
of both the min account requirement and micro, mini and full lots availability
the problem with fx is the spread which makes 'scalping' very difficult when
compared with the CME/Globex Euro FX and other currencies which can be
scalped - rt comm is eg: $4.50 and 1 tick is $12.50, but o/n margin is $2K+
fx however is advantageous since the o/n margin remains the same as the
daily/intraday margin, tho there is an interest +/- charge or flat rate fee
finally overloss cannot occur trading fx since the broker's sw will close all
losing positions if the account margin drops to the broker's limit

 

[ucf_student]

Quote from Jayford:

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.



Jay

Wonder if you could give out any names regarding commission firms? Any recommendations? Thanks for your post.

 

[Traber]

bump...

 

[eagle]

Don't take tax in consideration. Trade what you feel most comfortable with. Better to pay higher tax rate by being successful than to pay lower tax rate by being so-so successful.

Quote from Traber:

there are many benefits especially the 60/40 tax rate.

 

[youngtrader]

Quote from ajna:

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

Sorry but there is hardly any educational material on spreads.......pretty much just learn how the market moves fundamentally and trade them.

 

[Charly]

Quote from morreo:

My favorite is to trade U.S. treasury futures.

You can honestly wait for a trend day just like today (and pretty much every day this week) and make literally thousands just sitting back.

#########################################################
Sounds a bit tooooooooooo good.
Q.: by doing what/trading how.

Thx

 

[Jayford]

Quote from ucf_student:

Wonder if you could give out any names regarding commission firms? Any recommendations? Thanks for your post.

Sorry for the delay, haven't looked at this thread for a few days.

I have not kept up with the changes in the FX broker department as i am very happy where i am. if you want to trade stuff in addition to FX, go with IB. Its a commission firm, so they will give you best possible price, and you can trade damn near anything with them (which is why I use them).

for FX only, the one firm i still know of that isn't a bucket shop is hotspotfx. i have a friend who is a pro FX trader who uses them. Not sure what the commish is, but lower than what you'd pay on a spread with the bucket shops, and fills are computer matched which means instantaneous vs the bucket shops "deciding" if they want the trade.. Money is insured there as well against any fraud. this is BIG in this industry. A third party bank holds the bond.

my trader friend uses the charts and news provided by hotspot. Also uses Xtrader provided by them for DOM and entry.

this company caters to pros, but anyone can open an acct with 7500 i believe. must trade full size lots however, so know what you are doing before trading there (100k min trade size). i personally wouldn't trade anything less than this anyway as you'd never make enough money to live on.

hope this helps.

jay

 

[Trayo]

Quote from morreo:

My favorite is to trade U.S. treasury futures.

You can honestly wait for a trend day just like today (and pretty much every day this week) and make literally thousands just sitting back.

How do you look for a trending day in Treasury futs?

Thanks

 

[billbob]

Good thread.