Discussion in 'Commodity Futures' started by easyrider, Jul 20, 2002.
Anybody know why gold spiked up 6 bucks at around 8:30 Fri. morning?
with the dollar weak and stock futures weak at that time
once the eco $'s came out at 830 am that caused shorts to panic
setting off buy stops in the comex pit ...
anyway ... thats my take on it
yes, that is Friday's reason. But overall gold has been trending up since...well, it actually started late last spring. It was then that gold broke out of a HUGE multi year bear market.
There is money to be made on both sides of the gold market,
( like all commodity markets) but the trend is still up and as long as that is so, we will see more spikes up.
Ag commodities (I know folks around this board concern themselves with stocks and e-minis, it seems) have also broken out of some mega bear markets. Interesting markets, they are.
yeah, I hear the grasshopper is helping ag prices.
Don't know about a grasshoper, but if interested do take a look at the last weeks and months in beans and wheat.
Yeilds are down, heat is high, rain is still scare (might change) and dollar is trending down. These are some of the things make bull moves in grain products.
But I am biased. I trade these markets and work with a brokerage concentrating on ag markets, so take my comments with a salt shaker.
Honestly, though, it baffles me that so many want to trade the msot difficult market in the workd -- the s+p, using the e-mini as their vehicle of choice.
Margins are huge, volatility high, and their trading lifespans are rather short.
There are, after all, other viable, liquid markets.
margins are huge?? last time I looked volatility was a GOOD thing.
Other liquid markets? I'm all ears.
Well, yes, of course Vola is a good thing. Especially for the short term trader. But my mind was on the position trader -- one who attempts to recognize and capture a trend and hold it for weeks or even months. And even build upon a position as the trend takes hold.
In an extremely volatile market, where margins are relatively high and subject to rapid change, this is a very tough thing for most of us mortals to do.
Ok, those kind of position traders do not make brokers much money (Which is why this industry does educate traders and wannabe traders into this kind of strategy -- IMHO.) And it is not so exciting most of the time, but this kind of trading, I believe, leads to the highest return in this business of speculation.
Margins: the S+P is about 20K, the Mini almost 4K per contract. So with reasonable risk management you would need about a 20K account to trade a single mini without holding over night. That is a lot, and even without allowing for diversification of markets!
Show me a 20K account that survives very long trading the e-mini. (And the irony is that there are brokers out there that will open a 5K account and let you trade it!)
Initial margin in Wheat is around 750 dollars, corn, just over 400 bucks and beans are at 810 dollars per contract. With these margins and contract sizes, a 20K account can participate in liquid, use options to manage a position. And still diversify into other "liquid enough" markets such as cattle, hogs or sugar.
Nothing, however, is easy. It is just that this industry seems to suck so many into this game with a tough and expensive instrument, where their survival chances are substantially reduced.
I can appreciate your point of view, but no one sucked me into the e-minis. I started out just like everybody who's been in this
business for awhile.
1. I started out about 15 years ago trying to make a few
bucks trading penny stocks.
2. Then I learned about margin and tried to trade some of
the $40 and $50 a share stocks.
3.Then I learned about stock options and gave that a whirl.
4.Then I learned about futures and tried trading silver and
soybeans and what have you.
5. Then I learned you didn't have to already be a millionaire
to trade the S&P and gave that a shot.
6. Now I trade e-minis.
I personally think the e-minis are a god-send. And the
electronic fills in just seconds are amazing. Now that I
look back on the days I was calling my broker by phone
to make a S&P trade that could go against you $500
before you dialed the number, I wonder how I even
made it this far.
But, I guess my point was that some of us trade the
e-minis because we want to, not because we've been
Good points and congratulations. But as you know, I am not commenting your profile. I certaintly imagine you are NOT trading a 5K account, or even a 20K account, but something quite different.
Apologies if I sounded like I meant traders were dupes for the brokerage industry. My jab is at an industry (of which I am a part of) that often creates unrealistic expectations for beginning traders who start with a contract such as the min s+p -- which you did not.
Yes, the mini s+p has proved itself to be a great contract for the right trader, but that does not mean -- in my opinon -- is is the best trading vehicle for most retail traders.
With your experience, I am sure you know what I mean.
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