I am successful trader with stocks, but unsuccessful with eminis (so far). What do I need to learn, to have a success also in eminis? Do I just need to learn more or do I need to relearn anything or learn different things?
Hey lojze, Lucky you. Most people are neither successful with stocks nor the eminis. Keep on making money with stocks, forget the eminis. nononsense
I agree. In my experience, they are quite different animals. Don't assume your success with equities will translate to trading e-minis. Just my personal opinion, but there is considerable discretion necessary in trading e-minis, which comes only from long experience. Equities lend themselves better to TA and FA analysis, and are more appropriate for specific systems development. Bottom line is, if you are a bad discretionary trader - as I am - then e-minis will probably not be good to you. But it you do well in making calls from your gut, you might find it a good environment.
The e-minis are seductive because of good liquidity, good leverage, ease of going short, and favorable tax treatment. Unfortunately, they are a very efficient market, and our profits come from market inefficiency.
Hello: I have had the opposite experience. I was unsuccessful with equities to begin with, losing money trading them for over a year. I attribute this to lack of skill and experience, and overestimation of my ability. I learned to make money in other markets including options, fixed income and futures by studying the ways in which these markets differ. I looked at everything from daily range and volume to order protocols. You should be aware that the ES market is quite noisy. The significance of this noise is that you will need to learn to tolerate more "heat" (to use bigger stops). Also you may need to evaluate the idea that different strategies work in the ES as compared to equities. For instance, the ES market tends to cycle back and forth between value areas, represented by the open and close. Then without warning, it will trend for several days. I notice that successful traders often incorporate several layers or trading systems concurently. This may consist of a longer term base position, then trading around it with breakout or countertrend systems. These methods are appropriate for the ES market because they help to manage risk and enable the trader to stay in the market long enough to realize profit from one or more of the "systems". I hope my comments are of use to you. Best Regards, Steve46
This is all essentially my experience as well, but the mixing of systems correctly is incredibly hard, to say nothing of the fact that to start with, you have to be properly capitalized and have great commissions. nitro
I agree with the previous post, steve46, (more or less). ES is a choppy market. You can't chase prices, and in my experience, trading breakouts here is very tough. I use retracement, and occaisional counter trend techniques. I disagree with a previous post about TA and stocks vs ES. Futures, by definition, are short term, and therefore nearly everyone trading them uses TA. This makes the patterns etc, self fulfilling. It may look like a mess on a 1 min chart, but longer time frames work great with TA. In fact, I don't know what else would work. You don't have the level 2 stuff. You do have depth and prints, but the market hauls so fast, that this is often meaningless (but valuable at supp/resis!). my 2 cents. I've also traded both, and I find ES easier. Greater range, and no slippage as there are no specialists/MM's. Jay
The more liquid eminis seem more efficient than the less liquid ones. ES seems to be the most efficient of all, hardest for my systems to crack.
My experience too. Nitro, do your systems tend to act highly correlated at times? I have this problem with certain systems. Fortunately, most of them are uncorrelated enough so that mixing is not a problem.