NQ vs QQQ vs COMP

Eldredge: ”I have been under the impression that it is difficult to know if stocks are leading futures, or futures leading stocks. Are the futures really as reliable a leading indicator as this thread indicates?”

When I traded stocks, after trading futures for sometime, I could not use the futures to my advantage to the degree I had been lead to believe. Since I had been a futures trader I thought for sure stock trading would be a lock. LOL. I SUCKED! Well, it wasn’t that bad, but I found it very frustrating. This was mainly because I was applying my methods of trading futures to trading stocks. Execution was a problem for me, as I had no real understanding of routing. I would, inevitably, be right about the futures and the stock would not budge.

No doubt, traders use the futures to there advantage, but I would like to point out that my partner believes that looking at the futures can be misleading depending on what he is trading. On the other hand, he admits to not having a good feel for the general daily health of the market or the probability of an intraday broad market breakout/down that may affect his positions.

 

This really depends on what you are trading. Of course any highly-liquid tech (AMAT) or market stock (GE) will follow the fut's closely. But, if you are trading biotechs or oils then you are better off just watching the price of that sector index than the fut's.

 

First, let's make sure to be 100% clear. NQ is the futures for Nasdaq 100, not COMP. It is not a big difference but it's the exception that can surprise you and fool you.

NQ => NDX

It is nice and revealing to see more interest in futures trading.
Regarding earlier post : The S&P and Nasdaq main futures are not available for free at quote.com, therefore they are delayed.
THe minis are available for free for now : CME:ES1U and CME:NQ1U and soon CME:ES1Z and CME:NQ1Z

Dustin : "The futures aren't lead by anything. This is what makes trading futures short-term extremely difficult imo. "
that's true. but it is 'pure trading' no market maker there. You are market maker if you want to, in range bound markets I do that all the time, so easy it's a shame.
On the other hand, much more than in other markets, sometimes you trade against machines and that's tough 'cause they move size very quickly.
Actually there is much less noise in NQ than in stocks because it is on top of the food chain. Really, it is an advantage.

Another advantage, typical of pure trading, it is as important to be right than to be wrong. I explain. It is so easy to reverse a position in NQ [thanks to liquidity and easy short] than more often than not, if a move goes against me with strength, I will reverse it instead of just being stopped out.
In the worst case I reduce my loss [always nice] and in the best case, I catch a strong move very early. Of course you can do that with stocks too, but the noise and slippage will make it riskier.

neo

 

Tntneo: ”You are market maker if you want to, in range bound markets I do that all the time, so easy it's a shame.”

Easy? You’ve peaked my interest. Are you talking about a thin market? There are times when moving size can have an effect but I’ve seen some serious size get smacked down, too. Hell, I’ve seen the locals take in size during a thin trade and continue to press the market. At other times, light bids can make everyone run and cover. I’m probably not understanding you. Would you care to elaborate publicly or privately on this subject?

Tntneo: ”if a move goes against me with strength, I will reverse it instead of just being stopped out.”

Great way to turn a loss into a profit and a great way to get your ass kicked in a choppy market!

 

This one is my fault, I was not precise enough. I only meant it was easy to be on the other side of the move. Short high, buy back low and reverse and so on.
Of course, I would not try to move size. I don't think any private trader [even wealthy] can or should play this game against firms with much much more caps.

This one, maybe you don't give me enough credit .
in range bound market I am not playing this game [I play the one mentioned above ]. What I meant is, if a move violates what I expect it should do, it is likely to do the exact opposite. An example : you have a logical stop placed maybe under a double bottom or top. If the market really violates this stop it is rarely a fake. I was wrong, but I would wait for a little pull back and reverse instead of just being stopped out.
This is very basic and nothing spectacular there. My point was only to say it was very easy to reverse futures with rather big size if you compare to stocks [because of leverage].
Please note, I am only talking about eminis. I hope I was a little clearer than my previous post.

 

Tntneo: ”This one, maybe you don't give me enough credit.”

Sorry. No disrespect intended. I wasn’t directing the second part of my comment at you. I figured you used it in a profitable manner and I tried to throw in a little "knowing wink" guy at the end. I really do think it is a great way to turn a loss into a profit as you wisely explained in your post. I was just trying to be “educational” for all the kiddies out there in t.v. land. It was I who was not clear enough.

Thank you for your reply. And again, please except my apology.

 

tymjr, I really appreciate your reply.
your point was valid and I think we all indeed should try to help newer traders. so no offense taken.

 

oopss.. this is getting out of hands roger.
I don't want to answer for tymjr he can do it himself. But since I was part of the misunderstanding I can try to respond a bit.
I am afraid you are repeating the same misunderstanding and we should calm down.

70% to 80% of traders loose money. I don't know how many have to quit. But I do know it takes time to become profitable. I have been there, it is tough.
The low success rate shows how difficult this activity is. Myself, I refer to newbies as any trader who did not cross yet the profitable mythic line. One may remain a newbie for years and years. Several 'market wizards' were loosing for years and years before crossing this line.

It is not disrespectful. On the contrary, I spent, just like others, many hours on this forum just to help newbies [not kiddies!]. We all have different reasons. One of my reason is the fact I wished others would have done it for me when it was tough in the learning curve. Indeed read tymjr posts on this forum, he's OK and willing to participate and help. anyone can be misunderstood, it happened to me, it happens to him and it will happen to you. let's calm down and go back to the topic.

Remember also, that when anyone replies to a thread they don't reply to 'your' thread. They reply for the benefit of all the readers and members. [this was part of the misunderstanding twice already ]

neo

 

this is civil and I agree with you. so everything is fine.

 

This thread contains useful information. However, and I will take the blame, the last few posts (of mine) add little that could be considered useful to traders seeking knowledge regarding the original topic: NQ, QQQ, and COMP.

So, in the interest of cleaning up this thread for future readers, I have deleted my recent posts which do not pertain directly to the original topic.

Also, please note that the quote attributed to me in Mavrick99's post has been edited, and as a result it is not presented in proper context.

thanks to everyone for the information on NQ and the Q's, and i'm sure this will be as helpful to others as it has been to me...