YM versus ES fallacy

Quote from increasenow:

Many have "said newbies should start with the YM"...I disagree, here is why:
1-more volume on ES, better fills
2-less erratic or volatile
3-less whiplash spikes
4-easier to psychologically handle "draw downs" as does not move as "large" in numbers as the YM
...any other thoughts?...thanks for your insights in advance!!!
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If you already have a method or strategy...

Backtest it on all the trading instruments you are considering for trading.

Select the trading instrument that performed the best in the backtest.

If you don't have a strategy...you shouldn't be trading with real money and should be only using a simulator along with backtesting until you develop a strategy with trading plan.

My point, I've seen newbie traders performed better on YM in comparison to ES.

Just the same, I've seen other newbie traders perform better on ES in comparison to YM.

What's the difference?

The strategy.

Therefore, before you disagree or agree...

Backtest your strategy.

Yet, you mention the psychological aspect of trading.

There are some traders that on paper will trade ES better than YM.

However, during real trading, they trade YM better than ES due to the psychological aspects of trading or vice versa.

Regardless, start small (very small) and go slow to give your self some time to make adjustments without too much pressure.

It's during these times for newbie traders or struggling traders where goals should not involve profit targets.

Your goals should involve in executing your trading plan as best as possible and such can be quantified.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 
Quote from erToo:

YM's biggest problem is lack of native stop limit orders. As a result you can get massive slippage on breakouts. Not very friendly for swing or position traders.

ER2 is the best bang for the buck as mentioned.

NQ will get better once it recovers from the tech bubble.

ES - the tick is too wide due to internal CME politics (read link below). All breakouts are faded by the pit arbs due to the monopoly/privledge they gave themselves with a .10 tick size on the pit contract and a .25 tick size on the ES contract. This increases risk for other traders and can lead to choppiness.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=93275&perpage=6&pagenumber=6

All can be traded. Pick your poison.
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After having a closer look at ER2, I can see why you, Allaces and others conclude that it gives the best "bang for the buck." I will follow it for a while as I trade NQ and see if I can use my approach on this market. Some preliminary, quick-and-dirty backtesting suggests that I can. (I may wave goodbye to ES altogether for a while!) However, I have all the timidity of an elderly man who pauses a moment before stepping onto an escalator, waiting to get into the right groove before taking a step.

Even so, I have a question for you. Your hyperlinked reference to political strength in the pits is interesting and ostensibly makes sense to me. Nevertheless, I note that ER2's tick size is proportionately larger than that of its pit traded counterpart, not unlike the ES/SP relationship. Therefore, what would prevent its pit traders from engaging in the very same activities that SP pit traders do, to the detriment of ES-only traders? There is no denying ER2's volatility, I'm just wondering how I can reconcile your theoretical premise.
 
The RUT tick is .10 vs .05 for the pit. ES tick is .25 vs. .10 for pit.
The tick differential is wider for the ES/SP and the SP pit has historically been more active than the Russell pit.

Arbs can make more on the ES/SP and they have more confidence they can unload the other side in the pit because of its greater liquidity.

With a wider built-in profit they can then take more chances fading short term moves (and making the ES choppier).

With the Russell its probably only profitable to arb when things get truly out of whack.

All this being said. Trade whatever instrument you think you can make money on. I'm just trying to embarrass the CME into doing the right thing on tick size while they are under the regulators scrutiny for their merger with the CBOT.

Now is the time to contact the CFTC if you desire . . .

http://www.cftc.gov/cftc/cftccontacts.htm?from=home&page=contactstab



Quote from Thunderdog:


I have a question for you. Your hyperlinked reference to political strength in the pits is interesting and ostensibly makes sense to me. Nevertheless, I note that ER2's tick size is proportionately larger than that of its pit traded counterpart, not unlike the ES/SP relationship. Therefore, what would prevent its pit traders from engaging in the very same activities that SP pit traders do, to the detriment of ES-only traders? There is no denying ER2's volatility, I'm just wondering how I can reconcile your theoretical premise.
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Quote from Thunderdog:

Nevertheless, I note that ER2's tick size is proportionately larger than that of its pit traded counterpart, not unlike the ES/SP relationship. Therefore, what would prevent its pit traders from engaging in the very same activities that SP pit traders do, to the detriment of ES-only traders? There is no denying ER2's volatility, I'm just wondering how I can reconcile your theoretical premise.
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There might not be enough volume and OI in the Russell 2K pit to play too many games

http://www.cme.com/trading/dta/del/...uctFoiType=FUT&ProductVenue=R&ProductType=idx

652 contracts total today
 
Quote from erToo:

The RUT tick is .10 vs .05 for the pit. ES tick is .25 vs. .10 for pit.
The tick differential is wider for the ES/SP and the SP pit has historically been more active than the Russell pit.

Arbs can make more on the ES/SP and they have more confidence they can unload the other side in the pit because of its greater liquidity.

With a wider built-in profit they can then take more chances fading short term moves (and making the ES choppier).

With the Russell its probably only profitable to arb when things get truly out of whack.

All this being said. Trade whatever instrument you think you can make money on. I'm just trying to embarrass the CME into doing the right thing on tick size while they are under the regulators scrutiny for their merger with the CBOT.

Now is the time to contact the CFTC if you desire . . .

http://www.cftc.gov/cftc/cftccontacts.htm?from=home&page=contactstab
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Thanks for the response. Much appreciated.
 
Hey all,
WOW!...look at this...the least risky emini to trade is the...)drum roll please :eek: )...the NQ emini Nasdaq...let me explain...I am basing this off the ATR average true range per day and potential loss of 1 contract traded per day...
Okay here we go:

MOST RISKY: ER2...ATR is 10.67 and (greatest)loss would be $1,067

VERY RISKY: ES...ATR is 11.63 and (greatest) loss would be $581.50

RISKY: YM...ATR is 98 and (greatest) loss would be $490.00

LEAST RISKY: NQ...ATR is 21.39 and (greatest) loss would be $427.80

...we'll very interesting...what do you think?....very surprising...yes, very surprising...I would really take this to heart as you are beginning to trade emini's...of course this is my opinion...what do all of you think???
 
Exactly! Newbies should be concerned with losing less while learning, not making more.

Cajun

Quote from STEERAM:

I think the YM is great for noobs or pros. Remember the ES per tick is 12.50 as opposed to 5.00$ for the ym. It seems like you some people want the ES becuase of the 12.50 but they don't realize the can lose more.
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