to oldtime: I never thought of buying one and shorting the other to give a smaller net long/short position. That makes a lot of sense, I guess I'll finally have to go read the CME website. LOL, sorry guys. I was putting that off as long as possible. The problem with that is the broker I was going to use charges $2 per contract. I could really add up a lot of commissions when I scale in or out to make that work. I'm currently paying only $.99 per 100 shares at speedtrader. Then again the tax benefits would more than pay for the difference in commissions. Thanks everyone for the help! to scatagaphos: I realize that the E-mini is 1/5 size of the normal contract. I was just making a joke. I still think they should make an E-Micro 1/20th the size of the normal contract or somehing for retail investors.
You can trade a 3x leveraged ETF to suit your capital size. They degrade over time, of course, but in the short-run the deterioration isn't much.
The problem with that is I have cash just under the requirements for day trading margin. I am not a day trader but it's quite frustrating to deal with the limitations because I scale in and out of positions. Scaling in and out can easily put you over the day trade limit if you change your mind and go the other direction. Because of that and taxes was the reason I was looking into futures.
The tax benefit of trading stock index futures comes into play only if you are good at it. The benefit is a nice year-end bonus and is really not a selling point to trade futures which are just better to daytrade than stocks, period. Of course I am biased. There is no tax benefit to trading futures if you suck. And let's be candid: anyone who wishes for a new futures contract 1/20th the size of the SP is probably going to suck. I think you should stay with stocks.
the website is designed for retail traders, to give them the basic info, not like a stock prospectus whose only purpose is to cover somebodys ass you'll like that spread if I was starting all over that's how I would do it you can also enter in NQ in the mix the spread info is dated, goes back before the Russel was traded on ICE
Everything is relative to the amount of cash you have. I don't want to use insane leverage. How is it any different to try to turn $20,000 into $40,000 as opposed to turning $200,000 into $400,000? It's no different as long as your risk is scaled to account value. From the looks of it trading just one Emini contract with a $20,000 account is way too highly leveraged (depending on the time of day you're trading and your timeframe of course). So I'm going to look into what oldtimer was talking about with ym/es. A 1% move in the S&P is equal to about $700. That is my normal size stop that I use in the market and would not make sense for my account size. I would have to play a much shorter timeframe with much tighter stops which I'm not comfortable with.
I know how it sounds, I just like to enter positions with small risk. I do typically hold positions for a few days to a few weeks. When the market gets volatile is when the restrictions come into play. Thanks everyone for the constructive advice. I appreciate it.
Aside from spreading the ES vs YM, what other single futures contracts are smaller or less volatile that I could trade? I've been thinking of currencies or bonds but I haven't really been in that world so there would be a lot to learn. Like I said, I've always focused on stocks. Also, does anyone have a link the cme page the discusses spreading ES vs YM and margin discounts for trading that way? Thanks.