Hello, to anyone who is familiar with the TF Rusell 2000, what are the advantages and disadvantages of trading it compared to the other eminis (YM, ES, and NQ)? Thanks
Big disadvantage is liquidity and the TFs lack of it. If you're scalping in a fast market beware stops being blown through. For a swing trade with a wide stop it wouldn't matter too much.
For swing trading indices, it is my preferred choice as it gives more bang for the buck and in swings liquidity and slippage plays a much smaller role. In other words, Russell usually moves more.
1) Speaking as someone who is a "CME Loyalist", TF could have lower exchange fees and commissions than those other indices. 2) You might believe the TF "adheres better" to fundamentals than those other indices.
TF advantages: - nice for swing trades on the long side after bigger selling subsides. Minimal commission if really holding for 'a while.' - nice to be short during elevator plunges down - need to buy fewer contracts (less commissions) because of movement and the fact that 1 contract = a pretty big position for most people. - tracks the tick pretty well since it is fairly = weighted and contains 2000 stocks - nice to jumo onto if you are good at spotting real momemtum TF disadvantages: - more false moves; harder to read than the ES. - if you carry too many contracts (more than 1 for a lot of us), you get too easily stopped out of positions for 'small' losses, often. - data fee from ICE/NYBOT is now too much for this product. Thinkorswim doesn't charge but their futures commissions might not be the best. - if you don't use stop losses, you can lose a lot quickly, even on just 1 contract. I mainly buy the dips and prefer using the TNA ETF. I don't have to be prefect if I'm willing to wait more than a few hours to get into profitability and I'm less frightened when price goes against me. Less cash-at-risk in the event of a (really) black swan. I can also scale in and out in a way I can't with the TF, with my comfort level. I do lose the advantage of not being able to trade 24x7 though, which can be a big one ....
It's very simple. Whatever trade method you're using...backtest your trade strategy on TF, EMD, YM, ES and NQ. Whichever produces the best profits...that's the trading instrument you should be trading. Yet, if you're deeply concern about costs...trading the Emini TF futures has the higher data fee cost via ICE exchange in comparison to the other Emini products.
Agree w/the comments here......and especially that the ICE data price for TF is highway robbery. Still, for my trading, I like the /TF. When it moves, it MOVES. Though sometimes (maybe 1-2/mo) slippage hits me on an exit, but that's life.
The TF offers more ticks in the first and last hour but this advantage often dissipates throughout the middle of the session. Also it often runs ahead of the other contracts in either direction early in the session. Throughout the day it is more sensitive to extreme Tick readings caused by program trades. On the plus side if the TF takes off without you during the first 20 minutes of the session, then you may be able to hop on the ES before it follows.