do not trade index futres.

Discussion in 'Trading' started by padutrader, Jan 7, 2024.

  1. padutrader

    padutrader

    IMO: for inexperienced traders not trading index futures will save a lot of hardship.

    indexes do not move in a direction so it is difficult to trade. you need to deal with constant changes of direction, if you are trading indexes
     
    ironchef and toucan like this.
  2. Bad_Badness

    Bad_Badness

    Ignore this advice. :p It is how you get experience.

    There is leverage, liquidity, 23 hour a day action and major moves on news.

    Also CME currency pairs are regulated. You can do FX without doing "cash" in the "wild west".

    Please come and enter the Thunder Dome. ;)
     
    mervyn, SunTrader and p0box4 like this.
  3. maxinger

    maxinger

    do not trade index futres.
    --->
    do trade index futures.


    IMO: for experienced & inexperienced traders, trading index futures will save a lot of hardship.


    index futures (as in some other commodity futures) move

    up
    down
    up and down
    down and up
    up and up
    down and down
    up and up and down and down ...

    So there are lots of trading opportunities.
    So catch those trading opportunities.
    Don't let it slip away.

    Alternatively don't trade.
    Do anything other than trading.
     
  4. schizo

    schizo

    Padu, did you blow up your account again? You did, din't you?! :D
     
    swinglong1, cesfx, rb7 and 5 others like this.
  5. Snuskpelle

    Snuskpelle

    Index futures are some of the best products for traders, you get the clear long bias after all, and spreads are usually tight during RTH.
     
  6. tsfx

    tsfx

    SP500 index has the lowest spreads (especially in options) and best liquidity at each price level relative to its volatility. Hence, it's the best instrument to choose for either newbies or seasoned traders. FX is the worst.

    indexes are also the only asset class that HAVE a direction. Just compare its long term returns to any other asset class (let's leave crypto out of the equation right now).
     
  7. maxinger

    maxinger

    upload_2024-1-8_16-55-1.jpeg [​IMG]
     
  8. The OP is of course right. Day trading index futures is for expert traders; not for newbies. Arguably, any type of active trading is for experts.

    Now, the key to trade any market is of course to trade it how it is. Not how you wish it to be. On the day trading time frame, index futures generally don't trend. They gyrate. Simply put, by the time a trend is evident it's just about ready to reverse on you.

    So, if that's how index futures move most of the time, you'd need to develop a trading strategy which exploits that.

    Pure trend days are rare on index futures. About 9 % of the sample (> 7 years of intraday data) for an Up Trend Day and 4 % of the sample for a Down Trend Day.
     
    Picaso, rb7, NoahA and 3 others like this.
  9. tsfx

    tsfx

    Wrong. You have a statistical advantage when trading SP500 index over FX, commodities or bonds due to lower costs (spreads, slippage, volatility adjusted). All other things being equal, you lose less with SP500.

    You are talking about creating a successful strategy. That's a whole different topic. Creating a successful strategy is just as hard with any instrument. It's definitely not harder with stock indexes. It's easier actually.
     
    birdman and murray t turtle like this.
  10. The cost of trading is small for a reason.

    No, that's not how I interpreted the OP.

    Stock indices easier compared to what exactly?

    In theory, the easiest market would be very directional going from A to B in a linear fashion with zero noise. In practice, stock index futures are very different from that and generally are very complex instruments by design.
     
    #10     Jan 8, 2024
    padutrader likes this.