What to trade? I couldn't say. I've been trying to setup a demo to take a look at how the futures market looks. I'm most interested in seeing how the DOM works. This is because I use the open book and L2 alot; i've heard its somewhat analagous. (that being said, there are a lot of times where I deemphasize it)
You've probably figured out that I scalp equities; cheap stocks like q, lu, cpn, ect. I've been doing this a few weeks now and have been doing good right from the start. So naturally, my view on scalping is a bit biased. If i'm having success scalping for a penny, i'm likely to think that scalping for a tick is possible. (its not always a penny...sometimes I let it go further depending on the tape. There are no hard stops/goals, and I don't use a stop loss...I'm just ready to get out when the tape says its time...I'm not sure how one would expect to be able to scalp for 1 penny using a fixed stop loss)
I've heard that scalping the DAX for a tick is possible. There are no futures shops in my area, so i'm considering doing this on my own. I originally thought my shop would ask for a contribution, but since theres not, i've got some cash to take a look at futures. I was considering buying a course from a Mark O. at Velocity Futs. I don't think its intended to show me how to scalp for a tick ( i can't really think of any product that shows anyone how to scalp for the smallest increment or read the tape), but it would probably be good just to have an nice introduction.
I think its interesting how locked in some people are with their views on trading. For example, we were taught some basic things in our training class...you could think of them as general rules. But the one thing I've noticed is that scalping is more of an art then a science. A guy asked me today why I was shorting Q. He said the open book and l2, as well as the market indices said go long. i just said, well....its in a downtrend. I just tried to explain to him that just because we were told to use the open book for support/resistance, its not always that way. Just because you see a 1 million dollar bid on the l2 in LU, that doesn't necessarily mean go long. I tried to explain to him that there are just so many different scenarios to consider, and after you see all these scenarios played out, you kind of go through all these "if then" scenarios in your mind. I seem to see more "if then" scenarios day by day. Its not just some mystically "feeling"...its just a lot of "if then" scenarios.
Unfortunately, he didn't get what I was trying to say. When there was a million on the bid on LU, I was front running it once. He said, "you better hope thats real", to which I replied, "me too". But then I just tried to explain to him, "look, its not always going to hold, but if a million on the bid isn't going to show support for you, what is? What number will it take for you to determine theres some probablity on your side? You have to factor that bid in with the rest of whats going on. Like you saw red prints go off in time and sales on NY, where the the 1 mill bid is at....it looks like the selling is being absorbed...so the bid looks like it might be real...you've got the little bit of TA that we use suggesting that its real, by hitting the MA over and over again....you've got the indices showing convergence....and no LU doesn't really move all that much off the markets, but its on my side right now....ect ect ect.
In the end, I just said if you are going to doubt OB and L2 everytime, then just don't use it.
In sum, I just want to trade a futures product that allows me to trade in a vaguely similar fashion. I'm not terribly interested in trading on a larger time frame/swing trading/ect. I'm more or less interested in scalping for the smallest increment. If anyone has any suggestions on this, or would like to explain why this is not possible, I'm very open to any opinions/suggestions.
Thanks everyone for contributing to this thread. I've found others like it in the archives, but none that talk about this specifically.
Quote from FuturesTrader71:
Interesting replies so far. I find it interesting that many would have strong opinions on whether or not scalping or trading futures once per day is a winning way to go (or a fool's way of trading.... depending on your perspective).
I would be more interested in finding out what newguy1 was interested in trading. The universe of futures is quite broad and includes everything from weather based products to grains to interest rates to oil to index futures to SSF's to forex. The reply depends almost completely on what this guy wants to trade.
I certainly wouldn't scalp soy for ticks. I wouldn't scalp ES heavily without having some kind of a setup or edge and member rates. Some products readily do, in fact, lend themselves to scalping while others require a good amount of margin and some patience to scalp. In either case, scalping is for a minority of people and is not recommended for a retail trader. This is important to know. You must have the right commission structure, execution speed, etc to scalp futures. So if newguy1 plans to move from scalping TASR to scalping ES, then you best save your money until you can afford the lower commission structure.
Futures have a tendency to emphasize your skill level and psychological makeup. Leverage is the greatest thing when you are a consistent winner, but it is pure poison for someone who hasn't understood himself yet.
My reply to newguy1 would be: What do you plan to trade in futures and how will you trade it?
Once this information is available, then the replies would be useful and more specific to your needs.
Best wishes to all.
