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YM versus ES fallacy
- Thread starter increasenow
- Start date
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.
e-CBOT has native stops since last year or so. Works great.
ER2 has best bang for the buck for margin, but it's so jumpy, you have to allow wider stops so its risk/reward ratio is not much better (if at all) than ES or YM.
Newbies should not start with futures. Period. I suggest SPY QQQQ IWM DIA and no leverage. Gains and losses will be microscopic, but the point at the beginning is to learn how not to lose your butt.Quote from increasenow:
Many have "said newbies should start with the YM"...
Most methods for ETFs will work for futures and viceversa.
Last I heard CBOT has native stops (market), but not native stop limit orders. So if your market stop is hit and the market is moving you may get 3-6 tick slippage. Perhaps someone who has definitive information on this could clarify the issue.
Quote from buzzy2:
e-CBOT has native stops since last year or so. Works great.
ER2 has best bang for the buck for margin, but it's so jumpy, you have to allow wider stops so its risk/reward ratio is not much better (if at all) than ES or YM.
Quote from erToo:
Last I heard CBOT has native stops (market), but not native stop limit orders. So if your market stop is hit and the market is moving you may get 3-6 tick slippage. Perhaps someone who has definitive information on this could clarify the issue.
From the horse's mouth:
http://www.cbot.com/cbot/pub/cont_detail/0,3206,1123+48850,00.html
This bulletin is a reminder that current e-cbot functionality includes Host-based Stop orders and Request for Quote (RFQ). Please review the sections below which describe the functionality in detail.
Host-based Stop Orders
Stop Market and Stop Limit order types are available on the Trading Host. Buy Stop orders will be triggered by a trade at or above the Stop Trigger Price and Sell Stop orders will be triggered by a trade at or below the Stop Trigger Price. Higher bids/lower offers, as well as strategy leg prices, will not activate Stop Orders.
For a Stop Market order, once the Stop price is triggered, the order is entered into the Trading Host as a Market order. This order acts as a regular Market order and will match against any resting bids or offers in the market up to the dynamic price limit range. If there is any remaining quantity on the market order after it reaches the dynamic limit, it will be automatically cancelled by the Trading Host.
Stop Limit orders are configured to have the same trigger and limit prices. Once the Stop price is triggered, the order is entered into the Trading Host as a Limit order at the trigger price.
Quote from saxon22:
It all boils down to one ability to trade. If you can do it then it really does not matter. If you cannot, the market, any market will bleed you to death.
Agreed
CajunSniper / Puretick.com Administrator-Trader
Find the lowest common denominator of the largest participants. It is the es..
Ok I'll buy 1-3 but I'm not sure what you mean on #4. The ES is $15/tick and the YM is $5 a tick. Isn't $15 > $5?
Caj
Caj
Quote from increasenow:
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!!!