Day Trading Losers

Armaniman-

I'd suggest that next time someone asks you what you do for a living don't say daytrader, say something more respectable... like a drug dealer or pimp.

Fletch

 

I wonder if part of it is "How you reply what you do for a living" I never hear anything bad when I say that I am a daytrader or a stock trader.

is the tone in your voice weak when you say that, avoiding eye contact??

rtharp

 

Good question, RTharp. I don't think my tone is weak, in fact, I just laugh it off. I don't really care very much about how others react beyond finding it curious and interesting. Everyone is so eager to tell me about people they know who got slaughtered (presumably novices who jumped in at the end of the bull) and the general impression among most is, as someone pointed out, that daytraders are anachronistic gamblers who either go broke or go crazy. But of course, that's just their perception from a distance, and has little to do with my own reality.

 

hehe.. or my personal favorite -

"I market hot dogs and condoms to convienience stores.."

=)

-qwik

 

Your data provider may or may not provide futures data depending on the your setup. The leading indicators Magna and others refer to are the S&P 500 (SP) and the Nasdaq 100 (ND) large futures contracts. These are based, of course, on the indexes of the same name, also referred to as "the cash" indexes. There is an open-outcry pit where the large contract is traded and an electronic session (Globex), which runs concurrently and overnight. The electronic market trades a much smaller version of the larger contract. These symbols are ES and NQ. All four are traded at the Chicago Mercantile Exchange. The Merc is a good place to start looking for info.

http://www.cme.com/market/equity/index.html

Futures use a letter to identify each month. You need only be concerned with H=March, M=June, U=Sept., Z=Dec. Thus, each contract is identified in this manner: SPU01 where U is the month and 01 is the last two digits of the year. Not all providers use the same order, so you may find that it is SP01U.

Contracts have a limited lifespan. At any given time more than one contract is available to trade. Generally, the front or spot month is the most active month. This is the one you would trade, as it is the most liquid. The front month is the closest to expiration. Contracts expire on the third Friday of the month indicated in the contracts symbol. Prior to expiration, the next month behind the front month becomes the most active as traders abandon the old contract a week or so before the official date.

Sometime, in the near future, Single Stock Futures will be available. The margin and contract specifications have yet to be completely sorted out. But I'm working on it...

 

I sometimes answer that question by telling people that I'm a "critical liquidity provider". It's always funny to see people get really confused while pretending to know what that is.

Dave

 

Thanks a lot, tymjr, that will get me going on the futures.

Just two more questions:
As far as predictive value (of the front month contracts) is concerned, what time span should I think of? I mean, if you laid a Nas100 futures chart upon a QQQ chart, what time shift could you expect to notice (theoretically)? 5 mins? A day? A week?

As to trading them: Is it like with options that you can be "assigned" if you keep them till the expiration date? If so, how long before that date would you certainly have to get rid of them (if keeping them overnight at all)?

 

When people ask me what I do, I say I am "a modern day Robin Hood with a twist". I extract from the super-rich (the MMs and specialists) and transfer to the proletariat (me).

 

I’m not real sold on the futures “predictive” power. I did use them to help trade stocks a while back but I found it frustrating. My trading partner has found that he prefers focusing on the stock rather than trying to filter its movements through the futures. I have no doubt that there are stock traders who profit immensely from watching the futures, but not me. I was just better at trading the futures.

I trade off of the 5min. As far as the Q’s are concerned, I tried trading them recently with the intention of holding for longer time periods to avoid some of the chop. I just ended up trading the way I normally do and I found the Q’s offered poor fills and an all around frustrating experience. They appeared to be quite liquid, except every time I wanted to get into a position. Maybe I just suck at stocks.

I’m not sure exactly what you mean by “time shift”. They track each other pretty closely except that the Q’s tend to exhibit more noise on the 1 min than the futures, IMHO.

The Equity Futures are cash settled. I have never carried a position to “first notice” but I seem to remember it being a few days before the expiration.

 

tymjr,

OK, I'll just see what the futures can mean to me then. Thanks a lot!

I've given up on the Q's. For long I have thought they were perfect for beginners. Well, they are NOT! They are so shaky that it's almost impossible not to get stopped out. And they never make a really big move (which would compensate for that). By its nature it's a pretty average thing.
I now only use its chart to see what the market is doing. It's fine for that, but trading it is just not very rewarding on an intraday basis, unless you're very good at pinpointing your entries and exits. For swings I suppose it's quite OK though. (I even came upon a swing stock picker that did only QQQ, forgot to bookmark it though.)

«They track each other pretty closely»

That's what I mean by timeshift yeah, if they follow pretty closely, I would say there's indeed little predictive power in it.