Discussion in 'Trading' started by with interest, Apr 13, 2019.
may I ask why you want to know?
What is the use of this question?
What others achieve is completely irrelevant for what you can achieve.
I read all the time about sportsmen making lots of money. I tried sports too but it did not work. Now that I know that some people can make money, what difference does it make for me?
Did you become a profitable trader from the answers you received, or did you learn anything that makes you a better trader now?
Where can I make a complaint? Because there are people who are successful and I am not.
It is important to know because if your objective is to make a good living playing the slot machine, you are doomed, but if it is blackjack or poker, you have a shot. It is important to choose your field.
Yes but it is probably just luck and not skill.
overnight tends to never be openminded to other traders opinions and no matter what you say he will relentlessly defend his position which clearly shows unadaptabiliy and like most people will resort to personal attacks if necessay; however, you are correct. percentage is the only way to properly measure moves. when the dow was at 7000 a 1 % move was 70 pts. now at 26 000 it is 260 points! obviously you cannot use points for trading. 2009 low 6469 of the dow! we are 4x that. atr changes stop placememt changes. Sadly for daytraders of futures the mkt is faster then ever and slower than ever. the pace is controlled to wear you out. they force loss to get u to d stupid stuff. in defense of overnights losses which sucks is that the mkt has changed in so many ways at the CME. people say the mkt is the same buyers n seller sure but the rules at your trade engine are changing for hft and large traders. they have huge advantages. i struggle more than ever lately and its intraday only getting harder. uktra sophisticated comouter modelling is at work to fool human brains on patterns and all the golden rules of trading. harder than ever to get behind a move but reducing position size is number 1 thing. if range was 70 points and you traded 5 lots which is big for retail. well 7 x5=35 points..if u get 10% of daily range. now at 26,000 you get 260 x 10% = 26x5= 130 points.
dollar terms 35 pts = 5x35=$175 in 2009.
2019= 130 pts x 5= $ 650. adjusting for inflation etc since 2009. you dont need $ 650 profit to maintain lifestyle. so if you reduce to 1 lot you get 2009= 7x5 = 35 bucks and in 2019 = 26 x5 = $ 130 dollars. which is still way above inflation. all based on profiting or losing 10% of the daily range. this is why the micro contracts are coming. traders are gettting crushed because they are not adapting to the mkt and reducing exposure in lot sizes. if you calculate inflation since 2009. that 35 dollars on a 1 lot @ 10% daily range capturr would be $ 41 bucks. so you really should using the micros because you need less than a 1 lot to keep your startegy the same and keeping up with inflation. here is the formula. 130 or 26 pts ÷ 41dollars= 3 roughly. so 1/3= .33333 of a 1 lot. if micro dow is .50 cents (emini es 1/10) then you need 3 microdows..so 3× .50 a pt= 1.50 per point. so $ 1.5 x 26 = $ 39 dollars. so your new trading size assuming your skill is the same shoulde be a reduction by 3! or new lot start size is 3 micros. this is why spreading is popular now. you reduce risk. this also helps explain recent liquidity and volume reductions in the emini es contracts. it is industry standard that reduce positions when volatility is high because you make the same but you also the same by reducing size in high volatility. hope this helps. another way to view it is that a 1 lot in 2009 is like doing a 3 to 4 lot in 2019 mkt percentages. it would be like doing 3 or 4 lots to start your position back in 2009. make sense?
one way to trade is to convert all values to notional values. so you are trading the cash value of your futures contracts instead of points. example.. 1 lot es = 50xindex or 50 x 2911= $ 145 550. this is what you would be charting. the 145,550 not 2911. so 1 tick in the es higher = $ 12.50 x 50= $ 625 dollars notional and a full es point = 4 ticks or 12.50 x 4 so 625 x4= 2500 dollars notional.
so the chart goes like this
145,550 to 146,175 1 tick higher...to 148,050 on a 1 pt higher move. this way you start to see and understand just how enormous this leverage really is and you can start to understand the risk in notional dollar terms which is the CASH index risk. if this concept is unusual or foreign to you then stop trading until you understand that this is the true relationship to use. good luck
Anyone on this List making claims is an absolute guarantee of the opposite. Beware!
hft play the spread in futures but are constantly arbing the cash to futures spread! think about it like this to help you conceptualize.. the cash mkt trades in dollars in cents. the cash mkt which is just buying and selling of stocks in the basket of stocks that make up the dow or sp500. aside from cash to futures convergence on the roll forward to the next month. you can arb the 1 tick of the es or the $ 625 dollar notional minimum (12.50 es tick) think about it. you can buy the cash index at any dollars and cents price point. but in the es you can only buy or sell at the 625 dollar 1 tick notional value. so you have that 625 dollar spread to work with. if you buy the cash at half the notional tick value. so 625/2 = 312.50. so 145550 (see prevuous post) 14550 plus 312.50= 145862.50 cash sp500 index or actual buying of stocks. now you have entered or bought the es futures at a half tick even though it doesnt exist. so you sell the es mini on a uptick..and you lock in that 312. 50 dollars in the cash notionally..a half tick. or $ 6.26 cents. rinse and repeat on thousands of contacts and trades and your are an hft arb. printing money riskfree. this is why they need mucrowave towers from jersey to the cme. you gotta be fast super fast to lock unlock lock unlock this relationship all day. at night with the Cash index mkts closed you get much less of this which is why night trading trends. no one is trying to get out of bad arbs. they need to create consolidation or mkt spikes lower or higher to offset. think about in cash terms. they have 312 dollars of play in cash index before the es mini even ticks up or down to find the correct value vs cash index. if we further compare this to the spy etf..here is the breakdown. spy is at 290.16 cash per share..so es futures are roughly 500 shares per 1 lot of esmini. now the soread in es mini is 12.50 right. so 12.50 / 500 = $ .025 or 2.5 cents. so the spread in es is actually larger wider than spy which spy is typically 1 cent spread but even at 2 cent spread in spy etf.you still are a half cent..$.005 or .5 cents better than the minimum tick size in es mini which is 2.5 cents in cash spy etf terms. now lets go back to the half tick or 312.50 dollar notional example. which was half an esmini tick so $6.25. we take 6.25 / 500 = $.0125 or..1.25 cents! that is what they can easily arb amd capture if not more depending on what the spread in spy is. the reason is the minimum tick size in es is the minimum spread..so 2.5 cents or 12.50 per contract. you cannot reduce it more than that unless you allow locked mkts which should be allowed but they dont so the big boys can arb more and create more trades. reality is es mini needs a tick reduction but in order to get more trades. the cme did a micro es. anyway. the spread in es may sound small..1 tick..but ut really 2.5 cents spread in cash spy. so if you look at stock spreads. usually 1 cent in spy..you can spy is cheaper with a lower spread. even at 2 cents it is a cheaper spread. half a cent or .005x 500= $ 2.50 so you save 2.50 cents in the spread versus es mini. if it is a 2 cent spread. only time es mini is cheaper by spread is when spy spread is higher that 2.5 cents. and for retail that would mean 3 cent spread in spy which would be very large. now u have to constantly compare spy spread to esmini spread. there are times the es mini has a 2 tick spread or 5 cents!!! spy spread. and you maintain a 3 cent spread in the spy..now hft can capture a full 2 cents risk free. this is why volatility increases uktra short term traders profits..hft. and in the futures markets increases your spread cost to trade
Bro, can you please use paragraphs?
Its a setup for free advertising and promotion
Separate names with a comma.