Commissions are exceptionally reasonable on the dow e-mini YM. Anyone can day trade without needing $25,000+ in the account! A lot of our users have modest accounts. Taxes are less complicated. You're not required list every sale on your tax return! (US). Market liquidity Futures are always liquid enough. Market orders are instant. No strange fills or jumps in price. The spreads are never going to be huge like they can get on stocks, decreasing causing slippage. Focusing on one instrument day in and day out is less complicated and more productive Most everyone who is successful in the trading business started out by mastering one particular market. We'd rather be the master of one market then a jack of all trades. Each individual stock has it's own characteristics of price movement and it's character can change from day to day, making it either a good or bad choice to trade at any given time. Freedom. You don't need to wake up 3 hours before the market opens to scan for stocks or opportunities to trade. Share size allocation is easier. RISK: We've seen stocks that plunged 20 points due to a random company event. While global economy reports move the futures from time to time, it's never as unpredictable as a single stock can be. There are always shorts available. There is no up tick rule you need to follow. The $5/tick range of the YM e-mini futures contract makes for lower slippage. Bang for the buck. A futures trader making 1 - 3 trades a day and can make as much as multiple stock juggling traders. Less stressful. Concentrating on one liquid market each day will improve your focus and allow you to work on your setups. Keeping track of 5 - 10 securities can be cumbersome. Market direction. You don't have to follow systems that mirror the indices/ sectors, as eminis ARE the indices. Stock traders constantly have to follow the cues from the indices to track their positions. That means you need mulitiple eyes to follow all those charts. Less investment in hardware and software. I used to own 3 PCs sccompanied by 3 monitors. Now I have 1 PC and 1 monitor. Also, I used to use 4 charting services, now just 1 main, 1 backup and its free! Very infrequent surprise gaps to deal with. The futures markets are virtually always open. The e-minis trade 23 hours a day with a pause between 16:15 - 16:45 EDT. When terrorists attacked the London underground in the early hours of the morning, if you wanted to, you could get out in minutes and not have waited until the market opens to dump the stocks along with the panicking crowds. There are NO market makers playing games with the particular stock. There are NO routing decisions to make: " ECN? ARCA? REDBOOK????? Oh man, could have gotten a better fill with ARCA! " .
Leverage comes from the size of account/number of contracts used and it has nothing to do with tick size... If you use 1 contract for every 45K on your account, your leverage is 1:1, etc.....
Sell the News: You list all the reasons I've been interested in giving futures trading a try. However, I was curious what the "perils" are, as the OP intimates.
No perils...throw $5K into an futures acct; give it a shot. Worst case, you lose the $5K...no big deal.
5K down the drain. Let me give you an example of why futures trades don't make it. Today I bought BAC at 11.10 and sold at 11.30 in the span of 30 minutes. Thats equivalent to 15 ES points. How often does that happen in futs world? In the stock world you find these opportunities all day, every day. Holla!
Yes, just speaking in pct terms. You can get stopped out many times in stock world and make back your stops. In futs world getting stopped out repeatedly KILLS you because the volatility is just not there to get back to even. You have to be right soooo much to profit from futues.