Yup Same here. Thats why I prefer ER2 now. Use to trade YM, still do occassionally. How about that USD/JPY for volatility, huh?
Every single complaint in this thread about trading ER2 represents an opportunity for an experienced trader. I have switched from scalping ER2 to Crude recently but now that there is a lot of action and tension in the market I am back in ER2. See my thread under energy trading: Comments on scalping Crude and comparing it to ER2. Since the above conversation is revolving mainly around YM and ER2 I'll stay with that. YM is based on the average of only 30 stocks and the ER2 on 2000 stocks. Guess which one can be manipulated easier? A dramatic streak in just one Dow component can make YM streak. So while ER2 seems wilder it is actually truer to the nature of the overall market. While their ranges can be similar (ER2's is usually larger) they move differently because of the difference in the nature of the underlying instruments and contract size. When there is a hint of possible price change the ER2 will quickly dart $30-70 while the YM hardly moves. When it finally moves YM moves in streaks while ER2 is oscillating around an imaginary line (supposedly the value) when it is advancing or declining. Basically one can trade ER2 up and down all day fading the market. I fade almost every breakout because ER2 will retrace. If it does not retrace the bid ask will usually tighten (so there can be a noticeable variation of the bid ask range in ER2-which does not exist in ES for example) and lets me know to take it back because the market will run. Normally I am trading for $30 $40 but at times these little oscillations are as much as $100 like last week and I widen my target, which is great considering that the RT commission for a frequent trader is less then $4. Those $200 $300 gyrations around opening time are a gift to very short term traders if one is not afraid to place orders on both sides. When the market is busy like that - a couple of times a day - I can't type fast enough to keep up with the frequent trades. Contrary to popular belief the wilder the market is the less likely that it will go anywhere. My enemy (other then myself) is not a wildly fluctuating market but a market that is moving up or down steadily but slowly. While the conditions in ER2 may be a nuisance to the trader who trades several markets and is not particularly tuned in to this market it is certainly the best trading vehicle among the indices for the scalper or very short term trader.
hrokling, thanks Hombre, I try to keep my practice common sense and all my techniques are derived from observation. If you would like to know more about this please focus on observing price action on a tick chart for a couple of hours, on a tick chart that is somewhat compressed, a 30, 50 tick or 50 share volume chart which can be constructed in TS and some other platforms. At some point you will find a setting that suits both the market and your own tempo. Of course when you do this all day, day after day, (hell, year after year) the market starts talking to you. Regards, GC
I'll repeat... Backtest your strategy on ER2, NQ, ES and YM. Heck, test it on DAX, CAC-40, FTSE-100 and EuroFX EC. We can go on and on. Simply, what ever has the best profitable results... You now know what is best for you. You should also realize that someone else using a completely different strategy and/or a different trading plan... Will most likely recommend a different trading instrument and such needs to be taken with a grain of salt unless you are trading exactly the same strategy and/or trading plan as that other trader. Simple question with a simple answer because your backtest results are much more accurate and more important than someone's else opinion. Mark
Its a choice between ER2 and NQ. YM trades on E-CrapBot and is best avoided for this reason, atleast until it moves to Globex (assuming CME merger goes through and ICE doesnt steal it). ES ticks at 0.25 which quite wide for its daily range. NQ also ticks at 0.25 but the daily range in ticks is much larger than ES, probably about twice as wide on average. NQ tick was recently cut down from 0.5 to 0.25. Even though NQ trades at $5 a point, the daily range is twice ER2 (in terms of pts), so 1 NQ contract gives the same bang as 1 ER2 contract.
GC, Enjoyed reading your posts here and in the other thread on scalping QM. If you want fast action, ER2 is the place to be among the indices contracts. But each has to find something he is comfortable with. A similar mini contract (in terms of tick size, contract value and diversification) is EMD on midcap, which is not talked about much because it is less liquid now. But it will catch up later imho. Rgds, Opra
Agree wholeheartedly and it is great that at this point they are a good number of suitable instruments. I am going to coach a friend VST trading and I think we'll start with the NQ. I have not paid attention to EMD but I will look into it. Regards, GC