Why don't more people trade index futures?

[gov]

Quote from whitster:

this is a logical fallacy. it is called extrapolating from the individual, to the whole.

just because YOU found ES impossible to trade intraday does not make it so for others.

Also, *why* ES?

fwiw, i have tested my setups (I trade YM) on the ES.

While they still have positive expectancy and profit factor, they work MUCH better on the YM. i have a # of guesses as to why, but that is secondary to the main issue.

imo, ES sucks (for intraday scalping). Not being able to trade ES successfully does not mean much, if you didn't try similar methodologies on other indexes.

I also get tired (as i said) of this defeatism "if it was so easy, everybody would do it" blah bla bla

look, MOST small businesses fail. trading is no different. nobody said it was easy.

but i love it, and make a great profit intraday scalping YM, and if i listened to all the naysays, I never would have considered it (which would have been a horrendous mistake).

For me, i have found no greater opportunity in the trading world, than those present in index futures. I also really enjoy Corn and Gold, but index futures are the paramount instrument for me.

Wow, are you trying to convince you, or me?

1, There is no fallacy. I never indicated that what I said was anything other than what my individual experience was, trying to save a little time. Try it yourself is my advice.

2, Frankly, I don't give a shit what you trade, and I hope you don't care what I trade. I know quite a few ym traders, so not sure where these naysayers of whom you speak come from, but I am not among them. I don't trade ym at this time, fwiw.

3, Apparently fond of logic. Hmmmpf. The "defeatism" as you describe it is, nonetheless, a valid observation from a logical standpoint. Not trading the es and extrapolating data out to the 1000 car range needs a good slap of "defeatism" in my book.

 

[mrbud]

I agree with Whister.

I started day trading stocks in the late 90's. I was slowly bleeding myself do death. Fortunately, I had a good paying night job that kept me in the game. I truly believed if I stuck with it, I could do it. Last year I was just about to call it quits.

Then, just before quitting, I gave the YM a try. I never attempted futures trading before because of all the horror stories. Anyway, I'm glad I did. I became a YM specialist. It's all I trade now. I have a feel for it, it's my style, my game. I consistently make money almost every day. I wish I had found the YM before. I may never trade another stock again. Who ever, what ever {black box} is on the other end, I don't care. It's working for me.

What I do worry about though, is if someone pulls a 911 on the CBOT, CME etc. Many of us will be out of the game. Not because of the trade we maybe in, but because it's our livelihood. It would take years to recover {Rebuilding, traders re- entering the game etc.}.

 

[brownsfan019]

I too agree that index futures are a good instrument to trade, but understandably they are not for everyone.

I also agree with the comment that the ES sucks right now. The movements are pathetic and even though it has the most volume, I would say it is the weakest index future right now to trade. So, for any newbies reading this, make sure to also at least glance at the YM, NQ, ER2 and EC. I never really understood why so many gravitate to the ES simply b/c the volume is the highest there. Unless you trading hundreds of contracts at a time, it should not be that big of a deal.

 

[ksonsinc]

I have to say that every person is different and he should trade what suites him
future the only thing is that it is so leveraged up that u can loose money faster then in stock
I personally love futures cause it sutiable to me and proper risk managent ithink a person can do well

 

[Free888]

Quote from Pekelo:


But if everybody were to move to indexes, then who would make the underlying stocks move??

In theory .... if there is enough power for a futures to move significantly away from the index, the index would also move.

Because there is arbitrage.

 

[ddunbar]

Quote from ksonsinc:

I have to say that every person is different and he should trade what suites him
future the only thing is that it is so leveraged up that u can loose money faster then in stock
I personally love futures cause it sutiable to me and proper risk managent ithink a person can do well

This is really what it comes down to. Proper risk management.

You can trade virtually anything so long as you understand what you're trading and exercise risk management that is both commersurate with the inherent risk in the instrument you're trading and your own personal risk tolerance.

You can make significantly more money trading ES than with stocks simply because of leverage given the same amount of capital and dedication. But you will bear more risk in the process.

There is absolutely nothing that makes trading the ES more difficult than trading a stock. They are just different instruments with different volatilities, movements, and margins. Perhaps a few more vagaries (like the fact that a future is a derivative). But they both go up and go down.

Options on the other hand, introduce a new set of variables which require a new set of skills to master. But once mastered, are not more difficult to trade than any other exchange traded financial instrument. But you will have to master their underlying instrument.

So the question, "why don't mo' peeps trade index futures" is answered by this:

Mo' peeps don't or can't invest the time required to learn to trade them effectively. They have to master additional skill sets.

The question is sort of like saying, "why aren't more people doctors?" It's not difficult to become a doctor. It just requires more or I should say, a different dedication than becoming a manager at Walmart.

Which brings us back to the post I quoted above. Suitability.

I'll wrap with this; citing suitability as an answer doesn't mean that stocks are easier to trade because it's suitable for the masses to trade them. It just means that the dedication required for trading stocks profitably is commersurate to the lifestyle and time devotion predominate in the masses. There are many, many more who would rather buy into a mutual fund and who look at trading stocks as "risky."

 

[volente_00]

Quote from Quah:

One of the rules of my system is to never be long when a 9/11 happens.

Of course, my rule says to always be short when a 9/11 happens.

Why would you want to be long?

If you are profitable trading 1000 lots then you are probably averaging at least 2 points a day, 500k a week, or 25 mil a year, When the market opened after 911, dow was down 600, so ES was probably down roughly 60 points, so had you been long 1000 ES you would have lost 3 mil on the trade but are still up 22 mil for the year.

 

[apex82]

Quote from volente_00:

If you are profitable trading 1000 lots then you are probably averaging at least 2 points a day, 500k a week, or 25 mil a year, When the market opened after 911, dow was down 600, so ES was probably down roughly 60 points, so had you been long 1000 ES you would have lost 3 mil on the trade but are still up 22 mil for the year.

You forgot commission and slippage on those numbers.... Probably something more like 7 or 10 million, especially with ES fills. heh

 

[aus_SPIder]

Quote from brownsfan019:

I too agree that index futures are a good instrument to trade, but understandably they are not for everyone.

I also agree with the comment that the ES sucks right now. The movements are pathetic and even though it has the most volume, I would say it is the weakest index future right now to trade. So, for any newbies reading this, make sure to also at least glance at the YM, NQ, ER2 and EC. I never really understood why so many gravitate to the ES simply b/c the volume is the highest there. Unless you trading hundreds of contracts at a time, it should not be that big of a deal.

ES is beautiful right now, if you position trade

 

[ElatedMaverick]

Quote from rwalkerx:
I'm a member of a futures trading calls chat room service now and we make money every day and dont have to worry about getting up 2 hours early to screen for stocks to trade.

Ok... I'll play along...

Errrr.... What's the name of that group?