I never said that trading the e-mini is impossible. I said that DAY trading the e-mini is primarily futile. Maybe a few can make money doing it, but I don't believe many are. To trade the ES, or any other security profitably. You must have the capital to weather the random moves during the timeframe in which you are trading. In my opinion, up to 10 points of movement in the contract can be attributed to randomness. Thus, you must be able to ride out a 10 point adverse move. For a $30,000 account, of which I allocate half to futures, I am not willing to take $500 daily fluctuations. You can be successful trading the e-mini, but I believe your timeframe must be longer than, say, 10 minutes, and you must have at least $25,000 allocated per contract.
a lot of the traders i know are changing from stocks to eminis.they all seem to be doing from ok to great.these guys have many years trading stocks though so may not be that hard a transition. as far as time frame goes nobody i know would sit through a 10 point pullback.it works or it doesnt.pivots and fading the open seem to be the prefered methods of trading.
Myabe I'm missing something fundamental here, but what's the difference in trading style between trading the QQQ and SPY and trading the ES and NQ? They both move in lockstep with each other (ES/SPY & QQQ/NQ) If you have experience trading the Q's and Spiders intraday then the e-mini's should feel like old hat. Maybe not on a scalping basis; I'm talking slower style daytrading (5-minute bars).
The difference is leverage. I can trade, say $10,000 worth, of SPY but the minimum trade on the ES is worth $40,000. Less leverage allows me to trade a longer time frame, which I believe is more predictable.
Right, leverage I understand. But price movement should be similar. That's where I don't understand what makes people say the mini's are so difficult relative to the ETFs. I would imagine there's more spiking and noise, but if you trade the 3, 4 or 5-minute bar it should be less of a problem.
Well, now, maybe that IS a stretch, particularly if YOU are a competitor. What I was getting at is that there are some VERY bright traders out there. Further, there are some traders with definite edges. For instance, if you're sitting on the desk at Goldman Sachs, you're seeing order flow that most of us don't see. Do you think that helps? I mean if you're about to handle a large block of IBM, do think that helps at all? You're probably not old enough to remember Henry Kaufman, and how closely the market paid attention to his comments. Or the time that Solomon Bros. front ran his comments in T-Bond futures. It's legal I hear. That's where I was going....smart, well-connected people are amongst your competitors. But if you would like to disagree.....feel free. OldTrader
there are many jobs in the world that are not for everyone. for example carpenter, joiner, bricklayer - "normal" jobs that are not paid that well, but are not easy - and take several years of education before one can do a real good job. and they take even much more if one decides to become self employed and make a living in one of these jobs. in fact there are only very few - if any - jobs that could be done by everybody. and trading? just like anything - not easy - not for everyone. the difference? if you get really good at it - you can make a lot of money. but it takes some talent - and a lot of time and devotion. that's at least how i try to see it ...
I'm enjoying this thread as a relative newcomer (IB account, 4+ months averaging about 2 trades a day, so far I'm down about 4% including commissions, but have learned a lot for my $400 loss). My (rather broad) question is this: Do all of the e-mini losses somehow have to equal all of the e-mini gains? What I mean is: For every wizard who makes $1 million in 1 year's trading, are there 100 losers who blow their $10,000 accounts? (Not literally...) Or is there some way that the futures market magically creates money? Pros, please elucidate...
When I think of it, it just took me about 200 trades and 4K to find my edge. What is my edge ? Probably a good knowledge/experience/pratice of the product I trade