Nice quote. I should start reading some of RM's posts.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Why don't more people trade index futures?
- Thread starter I Trade 4 Money
- Start date
Nice quote. I should start reading some of RM's posts.
Quote from jessop:
IT4M,
There are very,very few ET traders I read up on.
But for those I do none of it is for strategy - its all for mental/attitude/perspective stuff.
Whilst searching for RM, check out Banjo - he talks a whole lot of sense too - worth a read.
Cheers
J
Thanks 4 the headsup.
purely electronic markets like the index futures are extremely efficient with multiple hedge funds, professionals and computers searching for edges--thereby "arbing" them out of existence. there are rooms full of quants (most with top education) running complex formulas watching, evaluating and calculating every tic waiting to pounce with ungodly sums of capital in the index future markets. the finest minds, fastest computers, and those with the most information on earth trade these products. If you think you can beat these guys, go for it!!
do edges still exist in the indexes--sure. they are just harder to locate and exploit than equities.
regards,
surf
do edges still exist in the indexes--sure. they are just harder to locate and exploit than equities.
regards,
surf
Quote from marketsurfer:
purely electronic markets like the index futures are extremely efficient with multiple hedge funds, professionals and computers searching for edges--thereby "arbing" them out of existence. there are rooms full of quants (most with top education) running complex formulas watching, evaluating and calculating every tic waiting to pounce with ungodly sums of capital in the index future markets. the finest minds, fastest computers, and those with the most information on earth trade these products. If you think you can beat these guys, go for it!!
do edges still exist in the indexes--sure. they are just harder to locate and exploit than equities.
regards,
surf
Good point. I think 2 pts./day on the ES is definately doable with basic TA. S/R, MA, and MACD is, IMO, all you really need, as well as money mangement, which goes without saying. I'm trying to employ different "betting strategies" http://en.wikipedia.org/wiki/Betting_strategy like the anti-martingale in my system.
Quote from I Trade 4 Money:
Good point. I think 2 pts./day on the ES is definately doable with basic TA. S/R, MA, and MACD is, IMO, all you really need, as well as money mangement, which goes without saying. I'm trying to employ different "betting strategies" http://en.wikipedia.org/wiki/Betting_strategy like the anti-martingale in my system.
ok. best wishes!
surfer
Quote from I Trade 4 Money:
I mean, there's more liquidity and leverage compared to buying stocks. Also, don't scalpers and swing traders base their decision on buying or selling a stock based on the how the index is trading for the day; so why don't they just primarily focus on trading the ES, YM or any other contracts and have the added benefit of leverage, liquidity, and simplicity(trading one specific contract as opposed to trading several different stocks)? Is there something I'm missing?
If you can develop a strategy that consistently squeezes out, on average, 2 pts a day for 1 ES contract ($50/pt./es contract) which comes out to $100/day/ES contract, you can apply that same strategy with 1000 contracts and make a $100,000/day without many liquidity issues, whereas you buy a small or midcap stock with $3000 compared with $3,000,000, you would clearly have to wait a much longer time for your positions to get filled with the $3,000,000.
futures are deceptively easy to get into overleveraged situations. then add in a newbie deer in the headlights situation when they go against you and you are history. futures are very unforgiving of mistakes.
Quote from I Trade 4 Money:
Can you elaborate on that please?
I am far from an expert but I see people employing many kinds of strategies with stocks. Bright does the opening stuff, Spyder and his group use scans, there are news plays and earnings on individual stocks. There is quite a list. I am pretty sure that most prop firms do not allow new traders to trade futures because of the risk and difficulty of trading them. Certainly money can be made in futures but after two years of hard work I am only now approaching breakeven and breaking through to profitability is proving to be a tough grind, at least for me.
you trade the market that suits your personality and trading style.
personally, i prefer low drawdown, consistent market, that is a consistent income producer. that's why i choose index futures.
whether or not there are tons of quants, black boxes, bla bla blah in the futures, at least for me, *i* find them easier to trade than stocks, and much more consistent.
i prefer to invest in stocks (which i love), but on a scalper basis, i have not found anything that compares with index futures - for me.
i agree with the previous post about risk management. futures are deceptively "easy" and can lull people into security. i have heard some guys who use "mental stops" ie not hard stops on futures, which to me (iow imo) is in-sane.
indexes are indexes. if u can trade DIA, u can trade YM. YM just happens to have much better fills.
the fact that the latter is a futures contract, and the former an ETF of course says nothing, because they move in concert.
personally, i prefer low drawdown, consistent market, that is a consistent income producer. that's why i choose index futures.
whether or not there are tons of quants, black boxes, bla bla blah in the futures, at least for me, *i* find them easier to trade than stocks, and much more consistent.
i prefer to invest in stocks (which i love), but on a scalper basis, i have not found anything that compares with index futures - for me.
i agree with the previous post about risk management. futures are deceptively "easy" and can lull people into security. i have heard some guys who use "mental stops" ie not hard stops on futures, which to me (iow imo) is in-sane.
indexes are indexes. if u can trade DIA, u can trade YM. YM just happens to have much better fills.
the fact that the latter is a futures contract, and the former an ETF of course says nothing, because they move in concert.
index futures are not just like "some other stock" just because it is made up of an index of stocks.
Index trading behavior is a different animal than the typical "momentum" issue stock traders like to try to find and trade. Most momentum traders are too tight to succeed in index trading, in my opinion.
It is kind of like this: most the traders are like new poker players who read a book "how to play poker" and want to follow that simple formula to take advantage of the ignorant players who do not know how to play against the simple strategy.
Well, that works in the lower limmit games. but, u get to the big games and u find the good players will adapt and take advantage of your simple strategy and they will bleed and bluff the players chips away.
That is kind of like what the es/sp does to the trader. it takes away what was working recently and puts the simple player on his head. Many become paranoid and start believing the market knows where their stops are, as they keep getting hammered over and over again with losses that hit their stop for a tick or two then reverse. it is not a conspiracy but rather the nature of the market that the crowd will never catch on too.. Many do not even realize that their strategy and bromides endorsed by many here on ET and many other places are worse than useless. Another issue is that many traders are scared to death to hold a position overnight... ouch, that big hit can hurt, but if one is not willing to step up, it is funny how the market takes advantage of those fearful traders who think more about "what could" go wrong than being aggressive and going for profit. The timmid trader gets killed in these markets just like they do at the big poker table, easy food for the better players.
Index trading behavior is a different animal than the typical "momentum" issue stock traders like to try to find and trade. Most momentum traders are too tight to succeed in index trading, in my opinion.
It is kind of like this: most the traders are like new poker players who read a book "how to play poker" and want to follow that simple formula to take advantage of the ignorant players who do not know how to play against the simple strategy.
Well, that works in the lower limmit games. but, u get to the big games and u find the good players will adapt and take advantage of your simple strategy and they will bleed and bluff the players chips away.
That is kind of like what the es/sp does to the trader. it takes away what was working recently and puts the simple player on his head. Many become paranoid and start believing the market knows where their stops are, as they keep getting hammered over and over again with losses that hit their stop for a tick or two then reverse. it is not a conspiracy but rather the nature of the market that the crowd will never catch on too.. Many do not even realize that their strategy and bromides endorsed by many here on ET and many other places are worse than useless. Another issue is that many traders are scared to death to hold a position overnight... ouch, that big hit can hurt, but if one is not willing to step up, it is funny how the market takes advantage of those fearful traders who think more about "what could" go wrong than being aggressive and going for profit. The timmid trader gets killed in these markets just like they do at the big poker table, easy food for the better players.