Why is the Futures market supposedly more difficult?

N

newguy1

I've heard this a bunch:

"futures is harder than equities"


Can someone explain why or why not?

I'm at a prop firm for equities and so far its great. But my idea of trading the futures market has been met with some resistence by others.

Why do people say this? Why don't people say this?

Sometimes it take me an hour to get filled...I have to route orders this way and that...commish is much worse...I have to deal with lots of fake bids and asks...I trade volume stocks that move in 3 cent ranges for hours on end...ect...theres a lot to complain about is my point. What is it about futures thats more difficult?

I'm coming from the point of view of someone who is scalping equities to make 1 penny, only in high volume stocks that don't move vs. scalping futures for 1 tick.

Why in this case is futures more difficult? Is it easier to sclap for a 1 cent move vs. a 1 tick move?

I'm not concerned with whether or not futures is more difficult to swing trade, or scalp for bigger moves...I'm just interested in which is more difficult to scalp for the shortest increment.

Even though I haven't traded futures, we could probably assume that charts and general TA isn't as useful in both circumstances. They aren't useless in the trading I do, but they aren't nearly as useful as the tape.

Scientist, I think I read somewhere you scalped for a tick. What do you think?
 
It isn't more difficult as everybody would keep on mentioning,
There is just more leverage in the futures market.

So people who blow their account within 10 days, would obviously think its incredibly difficult, but its just the same as trading QQQQ or SPY
 
I can scan stocks that meet a certain criteria. much less noise. I made money last year trading stocks and lost trading futures.
 
Not to start a flame war, but a simple observation might be in order...Look at the trader P&L thread and you will notice that there have been almost no contributions from futures traders. Not to imply that everyone is losing by trading them, its just that there are more than likely a higher percentage of profitable equity traders.
 
I initially struggled with futures, before making a consistent living with them... for more on this see:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=54164

The fundamental thing to bear in mind about the intraday trading of futures is that we never 'choose' a stock that moves like the futures for an intraday trade... we always choose the better behaved, more trendy stocks...

The approach and strategy to futures cannot, therefore, be similar to the approach and strategy used in daytrading well-behaved stocks... to try and daytrade futures the same way as you trade your self-selected / scanned for stocks is a recipe for disaster...

In order to successfully daytrade futures (after having made the mistake in the previous paragraph and having paid for it), I had to go right back to the drawing board and I intensively studied intraday price action over many months, to try and figure out when and why moves occurred... it then became apparent to me that a paradigm shift in my daytrading approach had to occur if I was to have any edge...

I have made that paradigm shift, and I am now a consistent and successful index futures daytrader... I take an average of under 1 daytrade a day on the S&P eminis (my commissions to net profits ratio is non-existent, as a result of both my low trade frequency and the tiny commissions to leverage ratio), I lose around 50% of the time (which I am psychologically comfortable with), and I make a very good living... There is no more scanning for stock candidates, no more chat room pump and dump, and no more hyperactive scalping (so, pleasingly, no more unnecessary enriching of my brokers)... none of that... just a simple, low stress, somewhat systemized approach to daytrading index futures...

I just wish I knew many years ago what I now know...
 
Which index or future would you be looking at scalping? I have no knowledge of stock scalping but I trade the european interest rate futures and am doing quite well scalping there.

The only idea I can think of why future scalping is more difficult is because there are more professional, and more in terms of volume parties trading them. How many pure scalpers have you got going for the bids and offers in your high volume stocks? as there will be hundreds of scalpers going for the bids and offers in the interest rate products, index futures is a little less competetive in the scalping arena.

Whatever you choose good luck!

FGBS
 
Quote from FGBS:

Which index or future would you be looking at scalping? I have no knowledge of stock scalping but I trade the european interest rate futures and am doing quite well scalping there.

The only idea I can think of why future scalping is more difficult is because there are more professional, and more in terms of volume parties trading them. How many pure scalpers have you got going for the bids and offers in your high volume stocks? as there will be hundreds of scalpers going for the bids and offers in the interest rate products, index futures is a little less competetive in the scalping arena.

Whatever you choose good luck!

FGBS
More...

Oh, the joys of scalping...

I did several years of scalping on Nasdaq and NYSE prior to decimalization, and I could never have the energy to trade that way again!
 
Quote from newguy1:

I've heard this a bunch:

"futures is harder than equities"


Can someone explain why or why not?

I'm at a prop firm for equities and so far its great. But my idea of trading the futures market has been met with some resistence by others.

Why do people say this? Why don't people say this?

Sometimes it take me an hour to get filled...I have to route orders this way and that...commish is much worse...I have to deal with lots of fake bids and asks...I trade volume stocks that move in 3 cent ranges for hours on end...ect...theres a lot to complain about is my point. What is it about futures thats more difficult?

I'm coming from the point of view of someone who is scalping equities to make 1 penny, only in high volume stocks that don't move vs. scalping futures for 1 tick.

Why in this case is futures more difficult? Is it easier to sclap for a 1 cent move vs. a 1 tick move?

I'm not concerned with whether or not futures is more difficult to swing trade, or scalp for bigger moves...I'm just interested in which is more difficult to scalp for the shortest increment.

Even though I haven't traded futures, we could probably assume that charts and general TA isn't as useful in both circumstances. They aren't useless in the trading I do, but they aren't nearly as useful as the tape.

Scientist, I think I read somewhere you scalped for a tick. What do you think?
More...

Faster. and you are trading the primary market.
 
Quote from candletrader:

I.........
..............
.........I lose around 50% of the time (which I am psychologically comfortable with), and I make a very good living... There is no more scanning for stock candidates, no more chat room pump and dump, and no more hyperactive scalping (so, pleasingly, no more unnecessary enriching of my brokers)... none of that... just a simple, low stress, somewhat systemized approach to daytrading index futures...

I just wish I knew many years ago what I now know...
More...

Good saying.:)
 
Quote from candletrader:

I initially struggled with futures, before making a consistent living with them... for more on this see:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=54164

The fundamental thing to bear in mind about the intraday trading of futures is that we never 'choose' a stock that moves like the futures for an intraday trade... we always choose the better behaved, more trendy stocks...

The approach and strategy to futures cannot, therefore, be similar to the approach and strategy used in daytrading well-behaved stocks... to try and daytrade futures the same way as you trade your self-selected / scanned for stocks is a recipe for disaster...

In order to successfully daytrade futures (after having made the mistake in the previous paragraph and having paid for it), I had to go right back to the drawing board and I intensively studied intraday price action over many months, to try and figure out when and why moves occurred... it then became apparent to me that a paradigm shift in my daytrading approach had to occur if I was to have any edge...

I have made that paradigm shift, and I am now a consistent and successful index futures daytrader... I take an average of under 1 daytrade a day on the S&P eminis (my commissions to net profits ratio is non-existent, as a result of both my low trade frequency and the tiny commissions to leverage ratio), I lose around 50% of the time (which I am psychologically comfortable with), and I make a very good living... There is no more scanning for stock candidates, no more chat room pump and dump, and no more hyperactive scalping (so, pleasingly, no more unnecessary enriching of my brokers)... none of that... just a simple, low stress, somewhat systemized approach to daytrading index futures...

I just wish I knew many years ago what I now know...
More...

Well stated!

I have traveled a similar path. In addtition to the above comments, when I first started trading index futures, I tried hitting home runs with little success. I now am happy and profitable hitting those daily base hits in the index futures.

I don't scalp for one tick profits, but with some study of short time frame moves in the index, I think that this style of trading is doable especially with the frequent breakouts of small consolidation zones and trendlines.

Charles
 

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