Low volatility markets?

Discussion in 'Ag Futures' started by saga273, Feb 26, 2008.

  1. saga273


    Hello everyone and thank you in advance for any information.

    I just started trading futures last month and have already had an extremely expensive lesson trading wheat and getting caught limit up. I lost 40% of my account in that single trade. I am in for the long run and look forward to a career in trading but there is a fat chance of that happening if I make any more of these mistakes. I was profitable trading my sim account but have not seen that come out in my live account. I don't want to take huge risks and find myself being stopped out often. I did a search but could not find anything..

    Are there any markets out there that you think a new trader could watch with low volatility? I often find I am on the right side of the trade only to get stopped out before the move.

    Thanks guys,

  2. Stay away from the grains if your just starting out. Especially wheat, it will pick your pocket fast if your wrong.

    But if your dead set on the grains I would stick to something like corn or just stick with the mini grains.

    Also emini dow and nasdaq, currency futures, short term treasuries (2 year note and eurodollar) are all good places to start imo but for now I would stay out of the grains and any physical commodity for that matter.

    Good Luck Man
  3. saga273


    Thank you youngtrader I have been reading your posts and looking at your journal. Lot's of good info. I am getting my ass kicked here but will stick it out as this is something I am serious about. I have been looking at some of the mini's but those are highly volatile as well. Sometimes I think if I have any chance at making this money back I have to try my hand at a volatile market such as wheat. Then my rational side says you need a market with low volatility so you can come back slow and steady. What I keep finding is the current market does not know what low volatility is.
  4. If it's low volatility you want, check out the mini-Nikkei on the Osaka exchange at night. It usually has a morning range of less than 30 ticks (sometimes less than 15), and at roughly $4.50 USD a tick (it trades in yen), you won't be losing 40% of your account in one trade unless you do something incredibly stupid. It also has incredible liquidity, almost as good as ES.
  5. Mistakes in futures are always expensive. Not a good place to start.
  6. Saga,

    Sorry to hear about your misfortune in the Wheat market. If you are starting out and want to trade grains I'd urge you try the mini ags or smaller contracts like corn & soymeal, depending on the size of your account, and what you feel comfortable with. Very important to trade what you feel comfortable with. WIth the ags you have daily limits and so you know your risk for that day. Looking back on your wheat trade - risking 40% of your account is way too much risk, way too much.

    The mini ags as I am sure you know lack volume, but don't overlook them - there is $ to be made catching a week or two upswing or down. Just use limit orders and be patient, if you trade them, and I wouldn't use stops either since the contracts are small enough and you know your risk with the daily limits.
  7. saga273


    mokwit, I am sure you know I agree. Filter sweep thanks I will look into the mini-Nikkei, that sounds like it is along the lines of what I am looking for.

    Thanks for any comments
  8. Don't be discouraged - if you are still interested in the grains you might want to try oats or rice - they have low margin requirements and they don't have the wild swings that wheat and soybeans have - good luck
  9. saga273


    I agree and I did not intend to risk that much to be perfectly honest with you I set a stop above the limit up and did not know there was such a thing at the time. I use tradestation and they do not offer a GTC order so the next day I tried to get out of the trade only to watch it open limit up with no chance to exit the trade. Then it opened up limit up again on the next session with no chance to get out. As soon as it came off the limit up I got out for a huge loss only to watch wheat fall to below where my entry was. Very disheartening but it is business and I can't cry over spilled milk.
  10. pkts


    You did the right thing just getting out at your first opportunity...it could have just as easily gone against you many more days.

    Sugar is pretty low volatility, average move is around 500-600 bucks I think.

    Figure out what the max you want to risk on a trade is and then stick to it. Don't trade the markets where your stop or the ATR is above your risk. Plus, if a commodity has been locking limit then stay away if you're a newbie.

    The way to make money is to take small loses and bigger gains...don't even think about doing a risky "revenge trade" in wheat to get your money back in one fell swoop.

    Finally, read some books on trading. My favs are Market Wizards and either Mark Douglas book.

    Good luck.

    #10     Feb 27, 2008