Why don't more people trade index futures?

"I am a fader too, but in Ym you can fade a move and they will run stops and take you out,"

that is just not my experience with YM. i have no idea why my setups work so well on it (vs ES) (well, ihave some suspicions) but they do.

again, one person's stop run is another's primo entry.

" when doing that same trade ES keeps you in the trade and lets you go on to profit."


then apparently your setups optimize (even if unintentionally) for ES vs, YM

mine are the exact opposite.


"As far as catching the whole move just figure on capturing 20%, now which would you rath"er 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."

ok, then we are talking two TOTALLY different things. rarely am i aiming for 20 pts (except for a very few setups). most of my setups have a first target of 4-7 points (depending on setup), a secondary target of 6-11 points, and more of a runner on the tertiary target

a 20 pt move in YM would more qualify as a position trade vs. a scalp, although some scalps turn into position trades (on the tertiary and fourth targets) if they run that way

but clearly, we have radically different trading styles if your targets are "usually 20 points" on YM

so, that could certainly account for the idfference in preference and trading styles
 
Quote from apex82:

ditto to what Austin P says. Just be careful in er2, if you dont have an edge and strict discipline you will be wiped out in no time. Its the best bang for you buck, hands down, I just wish there was bit more volume.
More...

What is the daily volume in ER versus YM ,ES or nasdaq mini ?
Thanks
 
<i>"I trade all the time."</i>

<b>volente</b>, you need to get some sleep! When I tried to trade FX discretionally in early 2004, I found myself enslaved to the screens from Sun to Fri nights. For me, no amount of money replaces quality of life. Then again, I'm in my 40's and pondering the meaning of life, reasons why I'm here on earth, etc. Usual middle-aged guy stuff. In my 20s and 30s it was all about the cash.

*

Yes, my vehicles go where they shouldn't and have the dents & dings to remind me of that fact. The puppies keep it trashed out inside on a regular basis... they are not allowed in the family car.

Until he died, Sam Walton drove a late model pickup truck. So do many professional athletes, wealthy farmers and ranchers, etc. I love muscle cars but could live without all except my 4x4 trucks.

**

I work with emini traders who settle on any given symbol and find their niche`. Some really come to like the NQ. It is a fine trader, twice the volume of ER and YM. Some like the YM for various reasons. Many try to succeed with ER, which is toughest due to sometimes wild action which breaks down discipline.

There was a time when the ES was everything, but contracting ranges and volatility lulls which accentuate program slams makes it a poor choice for some traders.

I'm not a fader... I make my money on pull backs of breakouts in harmony with directional swings or trends. When the ES is dead inside paltry ranges, there are nil directional moves to profit from. The YM closely mirrors ER, because Dow components are heavyweights in SPX. The NQ and ER trade more dynamically, ER usually 200% to 400% wider ranges than ES by dollar comparison.

To each their own: try 'em all, pick one or two and focus on that. Lots of trading approaches work, and there is an emini contract suited for all. To the OP question at hand, emini trading demands extreme levels of patience and discipline. What seems to be deceptively <i>simple</i> does not translate to <i>easy</i> at times.

Best Trading Wishes
 
I'd just like to take this time to thank eveyone who contributed to this thread. I'm sure there's many people who read this thread to find it interesting and educational just as I have.
 
Quote from austinp:

<i>"I trade all the time."</i>

<b>volente</b>, you need to get some sleep! When I tried to trade FX discretionally in early 2004, I found myself enslaved to the screens from Sun to Fri nights. For me, no amount of money replaces quality of life. Then again, I'm in my 40's and pondering the meaning of life, reasons why I'm here on earth, etc. Usual middle-aged guy stuff. In my 20s and 30s it was all about the cash.
More...



LOL, what I mean is often have a position on overnight, it is small enough where it does not worry me except for the occasions where I put on a bigger trade when fading europe's open around 3 est. i like trading at night but i think i do it out of boredom, instead of surfing, i put a small trade on and it at least has the chance of giving a better reward than just surfing.
 
Quote from austinp:

<i>"I trade all the time."</i>

<b>volente</b>, you need to get some sleep! When I tried to trade FX discretionally in early 2004, I found myself enslaved to the screens from Sun to Fri nights. For me, no amount of money replaces quality of life. Then again, I'm in my 40's and pondering the meaning of life, reasons why I'm here on earth, etc. Usual middle-aged guy stuff. In my 20s and 30s it was all about the cash.

*

Yes, my vehicles go where they shouldn't and have the dents & dings to remind me of that fact. The puppies keep it trashed out inside on a regular basis... they are not allowed in the family car.

Until he died, Sam Walton drove a late model pickup truck. So do many professional athletes, wealthy farmers and ranchers, etc. I love muscle cars but could live without all except my 4x4 trucks.

**

I work with emini traders who settle on any given symbol and find their niche`. Some really come to like the NQ. It is a fine trader, twice the volume of ER and YM. Some like the YM for various reasons. Many try to succeed with ER, which is toughest due to sometimes wild action which breaks down discipline.

There was a time when the ES was everything, but contracting ranges and volatility lulls which accentuate program slams makes it a poor choice for some traders.

I'm not a fader... I make my money on pull backs of breakouts in harmony with directional swings or trends. When the ES is dead inside paltry ranges, there are nil directional moves to profit from. The YM closely mirrors ER, because Dow components are heavyweights in SPX. The NQ and ER trade more dynamically, ER usually 200% to 400% wider ranges than ES by dollar comparison.

To each their own: try 'em all, pick one or two and focus on that. Lots of trading approaches work, and there is an emini contract suited for all. To the OP question at hand, emini trading demands extreme levels of patience and discipline. What seems to be deceptively <i>simple</i> does not translate to <i>easy</i> at times.

Best Trading Wishes
More...

Austin you forgot Warren Buffet and his old pickup. I was just poking fun at you since you refer to yourself as a redneck. :D I myself love to drive my 10 year old 96 corolla with 170k miles that runs very strong and still looks good. Have you ever read The Millionaire Next Door? That's how I live my life, simple and relatively stress free. :) No I just need to work a bit smarter at reaching the million net worth. :p
 
Quote from dandxg:

Austin you forgot Warren Buffet and his old pickup. I was just poking fun at you since you refer to yourself as a redneck. :D I myself love to drive my 10 year old 96 corolla with 170k miles that runs very strong and still looks good. Have you ever read The Millionaire Next Door? That's how I live my life, simple and relatively stress free. :) No I just need to work a bit smarter at reaching the million net worth. :p
More...

A big tick guys. I don't own a pickup but simplification and not getting trapped into keeping up with the jones is a huge part of a happy life.

Good trading.
 
Well...oh nevermind :)


Austin you forgot Warren Buffet and his old pickup. I was just poking fun at you since you refer to yourself as a redneck. I myself love to drive my 10 year old 96 corolla with 170k miles that runs very strong and still looks good. Have you ever read The Millionaire Next Door? That's how I live my life, simple and relatively stress free. No I just need to work a bit smarter at reaching the million net worth.
 
Additional reasons why those who trade stocks should consider switching over to futures. Below is an article by Dan O'neil.

ETFs vs. FUTURES

I've been reading about commodities-based exchange traded funds and am wondering about the differences between investing in exchange traded funds (ETFs) and investing directly in the futures markets. Does one have any major advantages over the other?

It's no secret ETFs have emerged as an increasingly popular investment option for individual investors. What started as a lightly regarded curiosity in 1993 with the debut of a single ETF tied to the Standard & Poor's 500 has exploded into a booming mainstream marketplace, with more than 300 specialty ETFs now being offered by a host of investment firms. Most ETFs are essentially baskets of securities that track an index, much like plain-vanilla index mutual funds, but trade like stocks on a regular stock exchange.

ETFs tend to appeal to investors who like to dabble in particular market sectors but perhaps lack the dedication to dig into them. Someone who's interested in adding an energy component to his or her stock portfolio may choose the basket approach of an energy-focused ETF over the idea of researching, investing in, and monitoring a number of individual utility companies.

As the market has become more specialized within the past few years, many investors have turned to ETFs to add commodities to their investment mixes. Many commodities-based ETFs started in the precious metals, actually buying the raw commodities to hold. Despite the growing attractiveness of ETFs in many corners, it's important to point out that trading in the commodity-based offspring of this movement is still a different animal than trading in the actual commodities markets. Here's a quick summary of why futures can be a better alternative to ETFs:






Product range: While the current crop of ETFS allows an investor to dip into some of the popular precious metals and a handful of indexes, futures traders can choose from a universe of products that includes hundreds of different possibilities. In other words, while ETFs can offer a taste of commodities for one's portfolio, at present they hardly scratch the surface of what's truly available in the futures markets.

Contract size: In a number of cases, futures are a more efficient way to control a given quantity or amount of a particular commodity than ETFs. You have to buy 10 shares in flagship gold ETF iShares Gold Trust to control just one troy ounce, for instance. But one gold futures contract represents 100 troy ounces of gold. Therefore, the equivalent ETF position would require the purchase of 1,000 shares.

Leverage: Many traders see the low margin requirements and tremendous leverage afforded by futures to be a major advantage. Consider this: The purchase of just a single CBOT gold futures contract currently covers about $60,000 worth of gold but requires an exchange minimum initial margin deposit of just over $2,700 (based on recent market prices). Equivalent minimum margin (50% Reg T) for the ETF position would require a deposit of approximately $30,000.

Trading hours: Shares of ETFs are traded on stock exchanges, meaning they're subject to the same relatively limited trading hours as any common stock transaction. While these restrictions may not seem unusual to veteran stock traders, anyone who has traded futures markets directly will likely miss the almost round-the-clock accessibility. CBOT gold futures again provide a great example -- they trade from 6:16 pm to 4:00 pm Chicago time, for example, allowing traders to act whenever an opportunity arises, almost 22 hours per day.

Costs/fees: While ETFs are lauded for their reduced fee structures compared with mutual funds, even these scaled-back charges can cut into one's profit potential - management fees are applied on top of the brokerage charges and exchange fees incurred when buying or selling shares in the ETF. Note too that ETFs pay their annual expenses (about 0.40%) by selling some of the gold they hold, putting slight downward pressure on the ETF share price over time. Trading futures directly, on the other hand, incurs no management fees, and transaction fees don't amount to much in percentage terms.

Taxes: Some futures contracts may offer a smaller tax bite than competing ETFs. Gold ETFs buy gold bullion, which is treated by the Internal Revenue Service (IRS) as a precious-metal collectible and taxed at 28%. By contrast, the general tax treatment for gold futures is that 60% of gains (or losses) are considered long-term capital gains, and 40% of gains (or losses) are short-term capital gains. This blends to a maximum federal income tax rate of 23%.

In the end, commodities-based exchange traded funds are likely a better fit for an investor looking to plug a hole in his or her overall portfolio with a simple patch of diversity. However, serious traders who are interested in trading commodities and taking advantage of the many benefits of the futures markets would do better by going directly to the source.
 
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