Crazy system

Discussion in 'Trading' started by trader1974, Dec 21, 2019.

  1. dozu888

    dozu888

    you are wasting time... there is no free lunch.
     
    #11     Dec 21, 2019
    murray t turtle and trader1974 like this.
  2. Turveyd

    Turveyd

    But your taking +1 on the 1 position and leaving the other 1 most of the time a few mins to get to +1 aswell, but eventually that'll go -900 and never hit the +1 in years and just keep losing you money.

    Then all the comm's maybe and spread so really you want +2 or +3 to make +1 aswell, which increases the odds on 1 running without you.
     
    #12     Dec 21, 2019
    trader1974 likes this.
  3. Handle123

    Handle123

    Chances are won't have much of an account by end of the week. Volatility of Nasdaq greater than ES and daily ranges usually dollar wise more for the Nasdaq. So one point of E-mini NQ is $20 and ES is $50, what you do when they travel opposite of each other ?


    upload_2019-12-21_10-32-54.png
     
    #13     Dec 21, 2019
    murray t turtle and trader1974 like this.
  4. trader1974

    trader1974

    Thanks for the answers, as I say, today I am very bored :D:D:D
     
    #14     Dec 21, 2019
  5. trader1974

    trader1974

    Don't waste your time on this probably doesn't lead to anything, I'm going fishing ;)
     
    #15     Dec 21, 2019
  6. trader1974

    trader1974

    Hooks are more expensive than fish. A ruin
     
    #16     Dec 21, 2019
  7. schizo

    schizo

    There's a terminology for this strategy. It's called "arbitrage" or "pairs trading". Basically, you go long one instrument while shorting another in the hopes of exploiting the spread or mispricing. Unfortunately, with NQ and ES, spread is nearly nonexistent. In your case, it would just be a wash.

    However, there are times when you need to hedge your position. Suppose you were long NQ and you had to liquidate but, for tax purposes or whatever, you wanted to hold on to it for a little longer. In those cases, you could short ES of equal proportion to offset any gain or loss in the interim.
     
    #17     Dec 21, 2019
    trader1974 likes this.
  8. Overnight

    Overnight

    The problem with your idea is that you are trying to hedge with correlated markets. That can only work for long-term trades. It is the same as attempting to pick tops and bottoms.

    It really cannot work in daytrading. And when you take into account the price differentials, you have to work out your ratios.

    When the ES shoots up 10 points, the NQ may shoot up 60 points. So $500 (ES) vs. NQ ($1200).

    And if you try to mess with the Dow in the formulae? Remember, sometimes the Dow moves opposite the Nasdaq and S&P.

    Ye be trying to hedge one US equity index against another. In the end the idea will fail and net you zero, because they all trend together over a long term.
     
    #18     Dec 21, 2019
    murray t turtle likes this.
  9. Real Money

    Real Money

    This is called an index spread. Long NQ and short ES is a bullish position. You are exposed to the market with less volatility than an outright Nasdaq or S&P E-Mini.

    You have to have enough edge to make it a viable strategy.

    This is an advanced strategy. It is not something that is easy to do. You have to volatility adjust the long and short exposure. These are being traded all the time.

    Nikkei 225 / S&P 500
    DOW 30 / RUSSEL 2000
    EuroStoxx 50 / FDAX
    FTSE 100 / ASX 200

    There are reasons to trade these spreads, but they are not obvious. If you are just some clueless retail bro, then don't bother.
     
    Last edited: Dec 22, 2019
    #19     Dec 22, 2019
    murray t turtle likes this.
  10. I am not sure what trader1974 is trying to do - is he just saying hold to roughly opposite postions and buy/sell one of those to go long or short, rather than hold a single one to go long or short? If so seems you would incur additional interest charge that simply buying/selling the underlying (or have to have less overall net position). Seems that they would just perform so similarly over time it would be a waste.
     
    #20     Dec 23, 2019