Why don't more people trade index futures?

<i>"Take today for example the Ym had a 55 point range or $275 max if you caught the whole move and ES had a 9 point range or $450 if you caught the whole range."</i>

Monday 11/20 ES pit-traded session price range was 1401.25 low to 1408.00 high. That is a 6.75 = $337.50 total range.

We cannot count the globex action, because highs/lows there could be midnight est. Is it reasonable to assume day traders would monitor the market from midnight thru 4:15pm est or 16.5 clock hours? Not likely, imo

The ER ranged from 795.20 high to 787.80 low, or $740 total range in pit session hours. As usual, there was 200% more potential profit distance in that symbol. Tougher to trade? Depends. Greater opportunity for profit? Undoubtedly.
 
If you want to think and grow rich, obviously, ES.

You can go from daytrading it to position trading it.

Sure you could do that with ER or YM but not for long because liquidity will become a HYOOG (lol,huge) factor. ES? Daytrade 1 to 500 contracts. Position trade it from 1 to 4000+ contracts. At 4000+ contracts position trading the ES, I suppose you'd be considered a medium player. ;)

Let-cha-know what they call me when I get there.
 
<b>dd</b>, when you get to 4,000 contracts of anything I'll be happy to have you manage mine for me!

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Assume a trader is able to average +20pts ER per month, any way that happens. +1pt per day, two weeks net loss followed by two weeks profit... whatever sequence happens.

+1pt x 20 days = +$2,000 per trading month = +$24,000 annual

Five ER contracts clear at market with nil slippage. +$10,000 per month = $120,000 annual

Ten ER contracts clear at market with minimal slippage. +$20,000 per month = $240,000 annual

Twenty ER contracts clear at market with nil to -1/2pt slippage. +$40,000 per month = $480,000 annual

Fifty ER contracts clear at market with -1/2pt to -1pt slippage. Gotta adjust the initial stops to accomodate for that.

+$100,000 per month = $1,200,000 annual

**

Most retail traders would be content with those $$ results. An average of +40pts ER monthly is highly possible, +100pts monthly during normal to high volatility periods are likewise possible. Double or triple math results above if monthly points average grows.

Again, nothing wrong with ES itself. When volatility = intraday range are at levels above decades' low readings, it is fine to trade. However, there are valid reasons why ER and other symbols have great appeal to private traders.
 
"When I speak of smooth, I am refering that YM can be pushed easier than ES due to liquidity, this makes it choppy, whippy, prone to false breakout break downs,"

but what u see as "false breakout/downs" i see as tradeable moves in and of themselves, since i mostly scalp it

i almost never play breakouts. the vast majority of my trades are reversals, so what you see as a false breakout to the upside (only later confirmed as false of course), i would be more likely to see as a fadeable spike.

CERTAINLY, if you are trading "size", ym is not "happening". i usually trade 2-5 contracts, so that is not an issue for me at all.

i find the ES jumpier and less tradeable, (for scalping). like i said, I had no preconceived bias towards YM (i started with ES), but my setups work MUCH MUCH better on YM.



"YM will often mover 15-20 point when ES barely moves 1, It is easier for big money to run stops on YM and they do it quite often."

and one person's stop run is another person's primo entry.

" I agree that YM gives youy more entry and exit points but with less liquidity it does not matter much once you start trading bigger size because you have to hit the ask/bid to get filled or risk getting frontrunned."

i have no doubt that's true. i don't trade size, so that is irrelevant to me.

"My other arguement for trading ES is the range. Take today for example the Ym had a 55 point range or $275 max if you caught the whole move and ES had a 9 point range or $450 if you caught the whole range. Some days it is closer but the majority of the time ES will out range the dow giving more profit to capture daily on the swings."

really?


first of all, the idea of catching "the whole move" is irrelevant to ME, but may be for you.

second of all, the 20 day average range of YM is 95 points, and the ES is 10.46

10 day for YM is 97, and is 10.43 for ES

considering 10 YM points = 1 ES point, it is almost 1:1 (slight edge to ES), but with the vastly superior spread for YM (2:1), it's no contest for a scalper
 
Quote from austinp:

<b>dd</b>, when you get to 4,000 contracts of anything I'll be happy to have you manage mine for me!

*

Assume a trader is able to average +20pts ER per month, any way that happens. +1pt per day, two weeks net loss followed by two weeks profit... whatever sequence happens.

+1pt x 20 days = +$2,000 per trading month = +$24,000 annual

Five ER contracts clear at market with nil slippage. +$10,000 per month = $120,000 annual

Ten ER contracts clear at market with minimal slippage. +$20,000 per month = $240,000 annual

Twenty ER contracts clear at market with nil to -1/2pt slippage. +$40,000 per month = $480,000 annual

Fifty ER contracts clear at market with -1/2pt to -1pt slippage. Gotta adjust the initial stops to accomodate for that.

+$100,000 per month = $1,200,000 annual

**

Most retail traders would be content with those $$ results. An average of +40pts ER monthly is highly possible, +100pts monthly during normal to high volatility periods are likewise possible. Double or triple math results above if monthly points average grows.

Again, nothing wrong with ES itself. When volatility = intraday range are at levels above decades' low readings, it is fine to trade. However, there are valid reasons why ER and other symbols have great appeal to private traders.
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Austin,

If a trader is going to trade so many contracts that slippage is an issue then why not scale in/out of positions and shoot for avg. pricing? I guess on obvious concern would be getting left behind?
 
<b>dandxg</b>, the only problem I've ever had with ER is partial fills on the winners. All of my losers get filled to the max as price action goes against me... could easily fill 200+ from entry to exit in the hole!

Entering on limit orders runs the risk of a partial fill. Several times this year I'd have -1pt x 20 contracts, -1pt x 20 contracts, +5pts x 3 contracts. What happened was price action hit my limit, partial filled and blew away without time to think about chasing entries for averaged fill, etc.

The ER can move 1pt leaps within seconds and be gone. My style of trading demands full fills on almost all trades... not cool to gain +3pts net distance on three trades of -1pt / -1pt / +5pts with $$ results of -$2,000 / -$2,000 / +$1,500. That math simply will not work :<(

Bottom line for me? Market orders in the ER until slippage on size becomes an issue. If all I make is mid to high six-figures annual like that, so be it. I'm not a cribs & Bentley guy anyway... I drive late model 4x4 trucks with dents in them and corn stalks caught in the undercarriage, for pete's sake!
 
Quote from whitster:

"When I speak of smooth, I am refering that YM can be pushed easier than ES due to liquidity, this makes it choppy, whippy, prone to false breakout break downs,"

but what u see as "false breakout/downs" i see as tradeable moves in and of themselves, since i mostly scalp it

i almost never play breakouts. the vast majority of my trades are reversals, so what you see as a false breakout to the upside (only later confirmed as false of course), i would be more likely to see as a fadeable spike.

CERTAINLY, if you are trading "size", ym is not "happening". i usually trade 2-5 contracts, so that is not an issue for me at all.

i find the ES jumpier and less tradeable, (for scalping). like i said, I had no preconceived bias towards YM (i started with ES), but my setups work MUCH MUCH better on YM.



"YM will often mover 15-20 point when ES barely moves 1, It is easier for big money to run stops on YM and they do it quite often."

and one person's stop run is another person's primo entry.

" I agree that YM gives youy more entry and exit points but with less liquidity it does not matter much once you start trading bigger size because you have to hit the ask/bid to get filled or risk getting frontrunned."

i have no doubt that's true. i don't trade size, so that is irrelevant to me.

"My other arguement for trading ES is the range. Take today for example the Ym had a 55 point range or $275 max if you caught the whole move and ES had a 9 point range or $450 if you caught the whole range. Some days it is closer but the majority of the time ES will out range the dow giving more profit to capture daily on the swings."

really?


first of all, the idea of catching "the whole move" is irrelevant to ME, but may be for you.

second of all, the 20 day average range of YM is 95 points, and the ES is 10.46

10 day for YM is 97, and is 10.43 for ES

considering 10 YM points = 1 ES point, it is almost 1:1 (slight edge to ES), but with the vastly superior spread for YM (2:1), it's no contest for a scalper
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I am a fader too, but in Ym you can fade a move and they will run stops and take you out, when doing that same trade ES keeps you in the trade and lets you go on to profit. As far as catching the whole move just figure on capturing 20%, now which would you rather catch 20% of $275 or $450 ? When I traded YM my target was usually 20 points. You seem to have lower profit targets, but i considered myself a scalper with only 20 points.
 
Quote from austinp:

[B Is it reasonable to assume day traders would monitor the market from midnight thru 4:15pm est or 16.5 clock hours? [/B]
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I trade all the time. Taking the normal open market hour range, YM was 54 points ES was 6.75. Which would you rather catch 20% of ?
 
Quote from austinp:

[B... If all I make is mid to high six-figures annual like that, so be it. I'm not a cribs & Bentley guy anyway... I drive late model 4x4 trucks with dents in them and corn stalks caught in the undercarriage, for pete's sake! [/B]
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LOL! Awesome. Have to respect that.
 
Quote from austinp:

<b>dandxg</b>, the only problem I've ever had with ER is partial fills on the winners. All of my losers get filled to the max as price action goes against me... could easily fill 200+ from entry to exit in the hole!

Entering on limit orders runs the risk of a partial fill. Several times this year I'd have -1pt x 20 contracts, -1pt x 20 contracts, +5pts x 3 contracts. What happened was price action hit my limit, partial filled and blew away without time to think about chasing entries for averaged fill, etc.

The ER can move 1pt leaps within seconds and be gone. My style of trading demands full fills on almost all trades... not cool to gain +3pts net distance on three trades of -1pt / -1pt / +5pts with $$ results of -$2,000 / -$2,000 / +$1,500. That math simply will not work :<(

Bottom line for me? Market orders in the ER until slippage on size becomes an issue. If all I make is mid to high six-figures annual like that, so be it. I'm not a cribs & Bentley guy anyway... I drive late model 4x4 trucks with dents in them and corn stalks caught in the undercarriage, for pete's sake!
More...

Understood Austin and well put. :) Does your redneck wagon have a gun rack on the back window?:D I hope the puppies are doing well. :)
 
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