Alexander Elder hates S&P index futures?

Discussion in 'Trading' started by short&naked, Feb 21, 2009.

  1. Quote from Trading for a Living:

    Coffee and cocoa move as fast as the S&P? Huh? ES is perhaps one of the most liquid markest and it doesn't move that much at all. It would be much easier for a larger player to manipulate cocoa than to manipulate ES. In fact, ES (SPY) is one of the safest to trade for swing trading (holding overnight).

    Throughout the book Elder recommends trading individual stocks but never once considers the risk associated with market closure (gaps, etc).

    Am I mising something here? Perhaps I'm misinterpreting his text.
     
  2. Isn't that book almost 20 years old? The markets have changed a bit since then.
     
  3. Yes, you are missing something.

    regards
    f9
     
  4. Perhaps you are right. It's from 1993.
     
  5. Thank you for the useless post.
     
  6. You should not believe all you read and hear in this game.
    Your own research will be the make or break of your trading.

    regards
    f9
     
  7. May I follow up a "useless" (OP words) post with a duplicated post?

    *

    If pondering emini trades without any familiarity to speak of, I'd suggest starting with NQ and go from there. They all have their moments with irrational spurts and chop. Over time, the NQ is most trendy and deliberate. Especially now, it has least exposure to financials which keeps the big-cap indexes churning to pieces.

    Over time, the ES is least trendy and most choppy (YM to a similar extent ) due to black box programs, arbs, cross-spreads and hedges from a dozen different paired sources and professional scalper-faders working for <$5 per contracts turned average profit.

    There is no ideal, superior or perfect emini contract. They are just like children from the same family... related but very unique personalities. NQ would be described as the plain, quiet, sensible child. ES would be the indecisive, impulsive, irrational one. YM would be the littler sibling to that. TF would be the hottie sister with a wild streak... barely resembles the others.

    Related, but unique. imo the traders with greatest percentage of success that I'm aware of are those who focus on NQ. Lowest percentage of success are the ES traders. It is definitely the toughest emini of all.

    *

    I happen to have more manhours invested in ER2 > TF study and analysis than anything else. Prior to that I worked SPX / OEX options for years. If starting from scratch right now today with eminis, I'd work on NQ first and then study TF afterwards if felt the need to go any further past trading NQ.

    Unless someone needs to turn 50 or more emini contracts consistently, the ES offers zero advantages over NQ or TF. Size on the dome is its only unique edge. The NQ is more directional = less choppy from A to B swings and TF is much more dynamic for scalpers.
     
  8. Yes, it seems that the index futures move very slowly most of the time. However, during unexpected news events, they can move as fast as lightning. Most new traders do not seem to realize this.

    This is one of the reasons why trading ES, YM etc. with 500$ day trading margins is just plain stupid.

    The only thing even more stupid is to trade them with 500$ day trading margins and 'mental stops'.
     
  9. fearless, I agree.
     
  10. s&n,

    I only intraday trade ES.
    Not for any great scientific reason, but simply because it suits my nature.

    For some reason I am drawn to it and I do not get that feeling from the other eminis.

    This feeling goes back to the days when my knees shook trading one contract and so I won't BS about the size and capacity of ES.
    It was a mutual (not fatal, thank goodness) attraction from the beginning and I have developed a great respect for it.

    regards
    f9
     
    #10     Feb 21, 2009