Is trading the ES easier than stocks?

Discussion in 'Index Futures' started by lkh, Jan 26, 2006.

  1. lkh


    Let me say up front that i am not a futures trader but have many years of stock trading under my belt. I decided to explore futures trading after i took a week trial for a futures trading education room where the guy had 27 days in a row of profitable days. (dont ask who, they are not advertisers here and i dont want trouble from the moderators)Every day i was there he did over 10k. There was no question in my mind that he got the trades because he used a buy\sell stop entry system with the orders entered well in advance. I was easily able to make the same trades on a simulator.
    The system used was a simple intraday support\ resistance system. Buy support and sell resistance. We were to scale in up to 4 levels 25% of our maximum intended contracts at a time with a 4.5 point stop and a 2 point profit target.
    I have been using the ib simulator and it seems to be dead on for fills so i do not think i am being fooled by inaccurate fills. I have 2 weeks on my own now without a losing day. The es seems so much easier to read than stocks like the qqqq.
    I would like to hear from veteran futures traders. Is now just a favorable market for this style or is it really this much easier to trade futures than stocks?
  2. I traded stocks and options for 6 years. Lastyear I traded strictly YM. I have now switched to ES and so far I have not had 1 losing trade using a 2 point stop. I think futures are easier to trade but people blow up because they lack the extreme discipline it takes and because they practice poor money management.
  3. lkh


    Would you explain more what you mean by "extreme discipline"? I want to work on all areas i may run into a problem with.
  4. K-Rock


    Make sure you have a plan for those occasional breakout days or you will blow up.
  5. I have been pondering switching to futures trading as well at some point, I am an extremely disciplined stock trader and have excellent risk and money management skills. I only had 12 losing days (biggest was -$350) in 2005 and have had 1 down day in the last 82 trading days so I am very consistent. I guess I am lured to futures because of the liquidity and the fact that I already have a lot of the necessary attributes to be successful. With a lot of the equities I trade, I cant size in when I see the big move developing w/o paying up (or down) too much. Its becoming a problem for me as I cant seem to make more than $2500 a day while maintaining the same risk/reward ratio that I like to see.

    I guess my question is to the experienced futures trader. I see Volente already has described the ES as easier than equities for the very disciplined, but I'd also like to hear from other experienced guys how they feel about the difference. Thanks in advance.


  6. lkh


    Do you mean other than the 4.5 point stop? I will admit this style is uncomfortable to trade because it buys into pullbacks and sells into rallies. A person would have to be confident in his ability not to blow his stops or it could hurt.

  7. Stops seems high to me but if it works for you, then great. I too fade extreme moves and fade gaps.

  8. No room for mental stops in futures.

    Before entering always have an entry, exit and stop and place a hard stop as soon as you are in the trade. In stocks, especially NYSe you can fudge it and wing it in the slow movers. You try that in futures and you will get your clock cleaned.
  9. Steve, do you ever trade SPY ?
    If you can do that, then you should be able to trade ES.
  10. I have tried trading the SPY at the firm I work at but we have so many issues with stuck ecn quotes on the really active stocks. I was told by the tech guys that we dont have the necessary bandwidth to effectively "scalp" the etfs like the SPY's so I just gave up on that idea. But I have always thought about the possibilites....

    #10     Jan 26, 2006