futures riding down the markets???

Excellent post neo, my sentiments exactly.

The other thing I like about futures is that there is only one execution route. You want it, you just buy it. While managing execution routes can be an edge to a good trader (see many of Turok's posts), I hated it. I always felt like I wasn't getting the best price, and it was probably due to my inability to interpret level 2 and manage my routing.

So its like trading NYSE for routing, but you don't have to wait for the specialist...best of both worlds imo.

The key, like neo said, is managing the leverage. Its not easier than stocks, but for me its much simpler.

Kirk

 

I agree with much of what has been said of the advantage of futures over qqq.

But, for the single contract trader, qqq provides the advantage of divisibility, allowing him to scale in and out to better optimise profit taking. A single futures contract is not divisible in this manner.

 

candletrader I agree with the divisibility advantage. However, if you really daytrade slippage can be nasty on QQQ, even pyramiding would not always help.
Or.. to be fair, maybe it was just me not being good enough at it.

But that's my point actually : things are much simpler with the futures. I make more money easier with futures than with stocks and with less risk [my risk, it's not necessarly yours]. So I agree with WarEagle : simpler.
Again, new traders should not get me wrong, please don't. Futures will eat your savings very, very quickly during your learning curve. I am glad I learned with stocks. But when you know what you are doing, it is imho the ideal trading instrument for income.

candletrader, if you never tried it, I think you might be very happily surprised with NQ trading instead of QQQ, depending on your trading style of course.

neo

 

thank you all for the very helpful postings. what you said is pretty exactly what i considered about this topic.

i plan to trade the nq sometimes in the future (futures in the future -> nomen est omen )

meanwhile i'll continue learning with stocks honing my skills - i think it should be the right strategy.

again thanks a lot.

 

WarEagle: ”The thing I like about futures is that there is only one execution route. While managing execution routes can be an edge to a good trader I hated it. I felt like I wasn't getting the best price, and it was probably due to my inability to manage my routing.”

Jeez, just when I was thinkin’ I was the only guy in the world who felt like that.

tntneo: ”I agree with the divisibility advantage… slippage can be nasty on QQQ, even pyramiding would not always help... maybe it was just me not being good enough at it.”

Jeez, just when I was thinkin’ … nevermind.

tntneo: ”Futures will eat your savings very, very quickly during your learning curve.”

Unh-huh. Amen to that brother. Excellent posts to both of you wise gents.

 

tymjr...nice to know there are others in the same boat too...thanks for the kind words.

Kirk

 

the thing with the one routing option would also be an advantage for me i guess.

as i read in another thread - trading the minis with ib should be pretty comfortable overall - concerning the speed of executions, etc.

any current experiences about this??

 

gerry,

I use IB and have had absolutely no problems with them. I know a few people have mentioned that their stops have gotten lost in the system, but I don't use their stops so I can't speak to that. I have my buy/sell limit orders set up on hotkeys, so when I need to buy it takes 2 keystrokes, the buy and then the transmit key. Usually filled in a second or two.

I highly recommend them for futures.

Kirk

 

thank you Kirk -

as far as it concerns the STOP-issue, i also read that there are some troubles.

but that's no thing for me too - i never ever placed a stop order since i do not hold any overnight-positions. and for pure intradaytrading mental stops work well for me.

i am also very happy with the tws and the hotkeys - if properly adjusted, the mechanical part of trading can be great fun i think.

 

Here are 2 other big advantages to trading futures instead of stocks:

1) Thanks to Dan Rostenkowski, futures (and index options like OEX) are all taxed at 60% short-term and 40% long-term, regardless of the duration of the trade. So your 1 minute trade in NQ yields a much higher profit (after tax) than the same 1 minute trade in QQQ.

2) Futures and index options are all reported on a single summary form. I think its Section 1256, but I don't recall at the moment. Fortunately, April was a long time ago. The point is, you only report your net profit or loss for the year. You do NOT have to report or document each individual transaction. This is a huge time savings come tax-time.

Of course, as previous posters have said, trading futures is a tougher game to win. The tax advantages are not very helpful if you are losing money.

-Jeff