Macho cajones required to trade ER2?

Discussion in 'Index Futures' started by high99, Jan 25, 2008.

  1. high99


    I have been trading NQ, but am tempted by the additional profit potential of the mini Russell. Equivalent up and down moves generate more profit than NQ or YM. Do I put on my steel jock strap and jump into the pool? How do I keep my pulse rate from spiking? Barbituates?
  2. Nope


    Over the past month I have migrated more and more of my volume to the ER2.

    In my opinion it's not as bad as it's portrayed to be. Yes, there are price runs that are faster than any other mini, but structurally it's all the same game.

    The need to actually trade a smaller contract size relative to the ES/YM to gain the same P/L result based on average range significantly adds to my bottom line as far as commission is concerned.

    Since the ES/NQ require more volume to reap the same profit average per swing this is of real benefit!

    Those sneaky commissions really add up...

    Just my 2 cents

  3. lwlee


    If you were trading 2 contracts at a time with the NQ or YM, it's pretty much like the ER at one contract. Especially now with all the volatility. When volatility was low, the YM's daily range was much worse.

    YM may be easier since you can actually monitor the top 5-10 stocks that make up the index.
  4. Except you would be paying TWICE the commission.

  5. lwlee


    Commissions?! Meh. All that extra profits from the ER, it's a small price to pay to get in the game. :D
  6. ER is generally easier to trade than ES, all things equal. ER tends to make lower lows = higher highs and doesn't pull back as deeply when moving. These days the ES spikes higher highs - lower lows, drops -5pts bounces +6pts and drops -10pts straight from there.

    ER has much less program gaming than the ES... directional swings are straighter. You may get stopped out a couple times in ER, but the swings captured go +$500 ~ +$1,000 per contract to make the difference.

    ER has very limited trade size on fills. Unless you get real creative, filling more than 5-lots on limit orders won't happen consistently. Partial fills becomes a nightmare.

    NQ has about three times the liquidity of ER. Also much trendier than ES, but ER outstrips both for distance covered on swings.

    ES has professional trader size... and that is the sole benefit to it.
  7. high99


    I only trade one contract, so ER fills would be no problem. True, I could double up on the NQ, but those commissions do add up.
    I tend to do 12-15 round trips per hour, however not all day long. But they still add up.
  8. lwlee makes a good point here. Therefore, I do not trade the same number of ER lots as ES lots. Insteadd of 4 contracts, I may trade only 3 ER. I am comfortable with this.
  9. better get on it quick cause after the September contract expires, ER2 will migrate over to ICE only. I bet this kills its volume which is sad cause its my favorite market to trade.
  10. ewaikit


    Why would migration to ICE kill ER2's volume?
    #10     Jan 25, 2008