How much does a specific market matter?

Discussion in 'Trading' started by milktruck, Oct 16, 2008.

  1. If I can intraday position trade one market profitably, but it is a pain in the ass (London hours forex majors from east coast USA), and I believe I have opportunities to trade for a living in other markets (US hours), is the learning curve going to be incredibly steep if I change gears?

    All my entries/exits are swing points, trend lines, break outs, yadda yadda. I just try to figure out if its going up or down as painlessly as possible on the risk/reward front. This stuff seems like it would be universal.

    Anyone been there and done that?

    So, um, reassure me that markets are markets.
  2. I trade many different markets essentially the same with classical price action, trend lines, volume, etc.

    each market has its own personality of course, but that's easy to pick up. Trading in general is tough cause all of the mental crap, but once ya get it profitable in one market, its easy to shift.

    For example, i am currently day trading FX, which i would not have done about two months ago. The equity disaster has led to big intra day fx swings that are quite predictable depending on what ES is doing. When everything mellows out, then i will shift gears to something else. I always trade at least one market in addition to my standard ES/NQ. that way if stocks are dead, maybe there is money in something else. its boring enough as it is!
  3. what markets do you choose to trade?
  4. MGJ


    Read the Bund, BOBL, Schatz threads here on ET. (These are interest rate futures traded on the EUREX exchange in Germany). Many traders, it seems, have focussed on these markets to the exclusion of all others, and have "learned the rhythm" of the way they trade. It seems these very specialized traders learned how to make money trading Bund, BOBL, Schatz. But when the contract specs changed slightly, these traders suddenly can't make money any more. Their specialized knowledge has become obsolete.

    Read the ER2 threads here on ET. (This is an eMini Russell 2000 stock index futures contract that used to trade on CME but has recently moved to ICE). Many traders specialized on this one market and, it seems, learned to make money. When the contract moved, ka-blooey! Their knowledge and expertise became obsolete. They can't make money any more.

    What's the "lesson"? I suppose there isn't one, except perhaps, "Beware". Things can change. Things have changed in the past, they can change in the future. Whatever can go wrong, will go wrong, in such a way as to inflict maximum damage to YOU. (Murphy's Law).
  5. i stated in my post which mkts I trade. but, again, bread and butter is ES/NQ. In addition any liquid fx future, ZB/ZN, and occasionally ZG, QM.

    Right now mainly ES/NQ + BP/JY.
  6. I really appreciate your help.
    You are helping me to know more on investment.
  7. I've been trading futures since the 80's and anytime a consistently profitable trader moved from one futures trading instrument to another highly correlated futures trading instrument...

    They continue to be consistently profitable although their profit level did change...lower for some and higher for others.

    In contrast, I've seen consistently profitable traders move from one futures tradinig instrument to another that wasn't correlated and the result was that they were no longer profitable (e.g. from Treasuries to Eminis).

    Just remember, we are talking about profitable traders and most of them are most likely veteran traders.

    Thus, they tend to not be glued to their trading instrument because they are very aware of the price action of other trading instruments that are highly correlated (e.g. ER2 and EMD prior to ER2 becoming TF).

    Regardless, never get married to a single trading instrument.

    Thus, always monitor and study the price action of another similar like trading instrument just in case something dramatically changes with your current trading instrument.

  8. Im curious, what changed about these contracts fundamentally?
  9. Although your question is directed to MCJ that has a completely different experience from my own but mainly due to us knowing different traders using different methods.

    With that said, it's been a long time since I've traded Bund, BOBL, Schatz...can't say anything about them in current market conditions althoug I still closely monitor them without trading them.

    In contrast, I can say something about the CME Russell 2000 Emini ER2 that's now known as TF on ICE exchange.

    I remember conversations with other ET members around March when the rumors begin circulating about liquidity problems with Bear Stearns.

    It was the same time I notice some unusual or werid like jumpy spikes in the Emini ER2...more so than the other Emini futures.

    In fact, ER2 volatility began changing more than the other Eminis.

    In addition, in prior, I was noticing fundamental changes in the Eminis last fall 2007 around the time when a few of Bear Stearns hedge funds filed for bankruptcy protection and rumors began circulating throughout the financial sectors about problems with other firms.

    This also correlated when the price action in the futures markets (especially the Eminis) began to become more jumpy or spike like without warning and seemingly at the time without hints to why.

    Yet, the Emini ER2 was more jumpy and spikey than the others.

    I remember a lot of commentary like...

    ER2 was just weird today becoming more common place.

    Fast forward into 2008 into the summer, that weird jumpy or spikey like price action became more noticable even by newbie ER2 traders in comparison to the other Eminis.

    It all correlated with the worsening crisis in the financial sectors.

    In fact, as the year progressed but long before ER2 switch from the CME to the ICE to become known as TF...

    Traders were leaving ER2 for other Eminis because that weird like jumpy price action became more and more problematic.

    Simply, fundamentally, the markets itself change dramatically and you could see such easily with the climbing volatility, bigger ATR's or ranges, headline news about bankruptcies, moody downgrades of mortgage-backed debts, skyrocketing foreclosures along with other sub-prime crap et cetera...

    That's the fundamental changes and it occurred before the ER2 exchange switch along with being noticed by ER2 traders including me.

    Thus, I think it's a mistake to think that traders switched from ER2 to something else because it switched exchanges.

    The exchange switch for ER2 was like the final straw that broke the camels back sort'uv speak that told those that had been contemplating on trading something else...

    It was time to trade something else.

    As to the profit levels...that's strategy dependent.

    Some traders are more profitable since leaving ER2 while others are less profitable due to traders using different strategies.

    Last of all, I'm a former long time S&P 500 Emini ES trader that switched to Russell 2000 ER2 several years ago...

    Now that I've switched back to ES from ER2 in the wake of all the crazy fundamental changes in the overall markets itself...

    The increased volatility made the switch back to ES much easier but once again that's strategy dependent.

  10. Does IB offer TF futures? Does any one know the symbol on IB. Help much appreciated.
    #10     Oct 21, 2008