I started in mutual funds before even the first appearance of index futures.. which was '82, if I recall. In my research to determine the "best vehicle", I found the top performers in each category had about the same overall returns... just that each had its own volatility and warts. So, whichever you like is probably as good as the other. I do the ES/Big SP just because of contract size and volume.... however I'm considering abandoning the Full SP contract in favor of more ES's... they market is going more and more electronic. Perhaps it won't be long before the pit traded contracts go the way of the dodo. All of the indices move approximately together... a "market psychology" thingy.
Hi gnome, You mentioned that you do simple things like buy support at let's say 1500 with a 2 - 3 point stop. You also mentioned that you like to go for larger gains than original stop. So if you were an intraday trader and set 2 - 3 point stops what is the minimal gain you look for before taking profits, ie: risk 1 to make 2, 3, 4 etc ? Related to that question, do you believe in setting fixed targets or do you take the 'take what the market gives you approach' which always seems such a weird thing to me since no one really has a clue what the market will give until after the fact. I have always thought mentally it would be easiest to have fixed targets and not worry how much the market went after you were out since it is all hindsight anyway. I mean mentally it would be much easier and calming to enter a trade with a fixed 2 point stop and a fixed 4 point target and just letting either one hit first not caring if it went 3.75 points in your favour and then came back to stop you out for -2.00 because over time you know that if you win 35% or greater you will be profitable but when you start taking the gain before hand at 3.00 points or 3.50 points that you have to win more than 35% of the time to be profitable since your stops are still at the 2 points. Sorry for the long post Cheers
Do you hold over nights, and usually no more than 5 trades a day? how long do your trades in ES usually last? thanks again
1. The mutual fund managers at one time "appreciated" the volume we fund traders brought to them. After a time, we got numerous enough that the fund managers told us to restrict our trading... they basically wanted "buy and holders" all along. 2. ETF's are F-A-B-U-L-O-U-S! Just like most mutual funds but with intraday liquidity.
No individual stocks, though perhaps I should. I know it's heresy, but I abandoned volume considerations > 10 years ago as unreliable.
Beat me to it, if you don't mind one more from me too gnome. Do you used fixed profit targets at all? Do you take half off after a move which you can anticipate will almost certainly correct to some extent, then adjust stops and let the rest try to run? Also, do you like ETFs because you find that they move more smoothly than individual stocks?