Of course it matters. Overleverage is the #1 cause for margin calls and account blowups in futures. When you decide on your strategy, you also decide on max leverage. So let's say you decide on a 4:1 leverage. You buy (or short) one contract per every $16k on your account. Let's say you have $60k on your account, you buy 3 contracts and have $12k unused. Sure you can say, what the heck let's buy 4 contracts, your net leverage is 4.27:1. Not a big deal up, I know, but you may keep saying what the heck, to 5:1, 7:1, 10:1, 12:1, 15:1 Overleveraging is like using drugs, it becomes addictive and will finally kill you. It would be foolish to place all your money to buy the maximum number of contracts you can.
Hi, ES is indeed smoother then the SPY mainly because of the spread (0.25 versus 0.1). But basicly they move the same by the tick. The main advantge of the SPY by this is that usually your stops should be lower and you will have better fills (most of the time you'll earn about 2-3 cents in the stop in SPY VS ES). Another adavange is the while the ES might move 2 points and you won't get filled in the 2 point target, at the same time you'll get filled with 19-20 cents target in the SPY. Big disadvatnge is that in the ES you can use the DOM to enter order and be filled even in a very fast moves (and the ES do this quite a lot) while the SPY will jump 4-5 cents in seconds and you won't be able to be filled. Practice with them for a while, lately I've began to like SPY more then the ES but you should go with what you feel good with.
<i>"Overleverage is the #1 cause for margin calls and account blowups in futures."</i> Exactly right... the notional value of underlying versus margin means nothing, like I said. The only thing that matters is $$ risked versus account balance. If the ES is at 800, 1000, 1200 or 1500 price levels. Doesn't matter, leverage is identical because the only leverage that matters is $50 per index point. Notional to the underlying is worthless data.