New at trading: starting with Stocks, options, futures?

Discussion in 'Index Futures' started by rod, Jan 22, 2011.

  1. rod


    Hey guys, I`m new at this and reading all I can about trading so I can get my hands on real trades soon...I just wanted ur opinion on what`s better to trade when I start trading: stocks, options or futures? And why?

    Thx! :D
  2. 1) Stocks, then options, then futures.
    2) Stocks are tamer. The "esoterics" of options can take longer to learn and properly understand. The leverage and volatility of futures can scare the crap out of you if you are not properly prepared and experienced. :cool:
  3. Index futures, sans doute. If you're US, trivial record keeping for taxes, and preferential tax treatment of 40% as long term gains. No fear of the risk of instant disaster than individual stocks hold. Predictable behavior because they are ensemble instruments. No pattern daytrader bullshit. And you can start with about $5K.
  4. rod


    hmm, interesting...didn`t know index futures didn`t have the pattern daytrader rule, NICE...what`s the leverage on futures? how much is one ES contract for example, and what`s the minimum I could start with? Is $2k ok?

    hey nazzdack, first of all thank u for ur opinion too, and 2ndly i luv ur nick! hahaha:D

    yeah, for now index futures and stocks got my attention...although I forgot to put currencies as an option but I think that`s like the riskiest and toughest one so I think I`ll worry about index futures and stocks first:p
  5. I don't think a reputable self-clearing futures broker will let you in for $5k. I recommend that you look at Interactive Brokers, lots of people here use them. Very solid financially, very good rates and fees for small fry. Payoff is 50:1 for ES and 20:1 for NQ. I forget the ES margin but for NQ at IB it is $1875 intraday. Trading futures narrows down your choices for data providers. I love/hate ESignal myself.
  6. I forgot to add that as a noob you'll get royally fucked trading stocks. Futures are a more level playing field. And there is no problem shorting, as you don't have the issue of availability.
  7. I think many of us have gone the route of trading stocks to options to futures. Each one has it's own inner workings, so make sure to read up and study what you decide to choose. I personally like futures for the tax treatment and leverage available but as another post said, you better understand that leverage or your account can disappear in a day.

    I would get some demo's and start clicking around to see what you think on the platform operates. I've used Open ECry for awhile now and it does what I need - it's also free if you have a live account which is nice (that includes data).

    Good luck!
  8. rod


    1. Could you explain this a little bit further?(trading n00b here...):confused:
    2. Why do u love/hate eSignal?

  9. What is your objective moneywise ?

    How much risk capital do you have to get started ?

    Are you prepared mentally and financialy to start a journey that could take years before you actually make any profit ?
  10. Think about it as if it were a card game. The house charges you commission just to sit down at the table ($2 per NQ contract at IB.) Table rules are that you have to chuck $1875 into the pot as proof that you can pay up. Call it earnest money. Your broker calls in margin, although it isn't really "margin" in the conventional sense. The payoff is 20:1 for every point that price goes in your favor. At any point you can fold and take back your earnest money less your losses. The house charges you 2 bucks to get up from the table.

    Why do I love ESignal? Because I have ten years worth of code development in their script language. Why do I hate ESignal? Because I am trapped by that code development investment.
    #10     Jan 23, 2011