A looong time ago, before the internet, i shorted the DAX over the phone with my broker: Quite funny now: vis: sell x March DAX at 4000 Broker: You sold x March Dax at 4000 vis: place stop loss at 4100 Broker : Stop loss placed at 4100 vis: good broker: you are filled at 4100 vis: huh? broker : interest rate decision just came out, they lowered by 25 basis points. vis: oh, ok, cheers, bye for now broker: bye /sniggers off
Easy answer for us retail traders. Backtest your trade strategy on all available trading instrument data you have access. Next, let your backtest results determine which trading instrument is most suitable for you. Yet, some traders select trading instruments based upon how well it fits in their personal lifestyle. For example, your trade method may be more profitable on something that's in a different time zone when you're normally asleep. Thus, some traders choose to trade something else that is LESS profitable or not profitable at all because they're unwilling to change their "personal lifestyle" to trade something that's more profitable. With that said, in my experience, most retail traders only backtest or apply their trade strategy on 1 - 2 trading instruments and do not know if they would be more profitable on something else... A titanic mistake.
I mean 1% move in one second Yes, an intraday gap of 1% in one second Not a terrorist attack, not an interest rate decision, a simple market news near or just after the market close for the cash index
The value of one contract is 50 times the value of the S&P 500 stock index, meaning 50 x (say) 1350 = $67500. Is it correct?
Thanks for writing this post. This has been on my todo list to apply my strategies to multiple instruments, but I have been lazy. Now, I will get onto it asap.
To be clear, I'm recommending to "backtest" (test) your trade method on different trading instruments so that you can then determine which trading instrument will be more profitable for you to trade in comparison to other trade instruments. In fact, markets are forever changing. Therefore, one year you may be primarily trading one trading instrument and the next year you'll be trading something different. Heck, this can occur (changing trading instruments) every few months if you consistently backtest your method to several times each year.
Anyone claiming to make $1K/day on average on the ES with one contract really needs to put up rock-solid proof because that's so far beyond the norm that it's like claiming you can run 100 meters in 8 seconds.