Hi all, For your entertainment, I am going to record my rise or fall as a part time futures trader. I am a futures newbie, having studied the market for a few years, I seem to have a handle on the DOW index. I figure trading YM, I should be able to pull home $100 per day. Papertrading both YM and YJ, hitting the bids/asks at trade time has prove profitable. I originally planned to hold overnight, but recent discussions have led myself to believe that it is just too risky to be long a contract overnight (short I can live with, I can't think of a terrorist type activity that would cause the market to double over night). So here goes: June 1 - opened IB universal account. Hope to have approval and funded within a few weeks.
First of all good luck with your trading but 1 bit of advice if I may. Pls don't assume that it is ok to hold a short but not a long. You are right that the overall trend is down but you just never know what is going to happen. The day that one of the big caps comes out after hours and increases their yearly guidance, hold on to your hats because the market will go up in one giant leap (Ok it is not probable but it is possible and that is a risk). Of course you can hedge your position or just accept the risk but your trading strategy had better have a giant loss factored into it. Cheers Mike
you have to be with the trend, but you also have to have a good entry... entering the market way down here can be risky.
to decide what to do here... More often then not, if I hold overnight, the market gaps in my favour. The only big move I have papertraded was over sept 11th. I was already short, and ended up making 500 points, and then reversed and made a boat load on the way back up, all thanks to holding over night. But, in real life, the remote chance of losing it all over night I guess out weighs the steady rewards, at least until I get my equity up to the contract value. Too bad YJ didn't have more liquidity. I wouldn't have much problem holding YJ over night. Has anyone studied the effect of closing a position at the close, and reopening the next day at the open? I wonder if it would all even out in the end, with the added benefit of being able to sleep at night.
If you are daytrading then don't hold over night, if you are swing or position trading then you can. You made a good wack in your paper a/c by being short Sept 11 but how would it have affected you if the market had moved the same amount but the other way? Pls don't assume it can't by trying to guess all eventualities because it's impossible. Personally, I 95% day trade at the moment because there is so little momentum and no predictable follow through. That's just me though. Find what works for you but don't worry about missing opportunities that is one thing that never dries up. Cheers Mike
If I had been long sept 11th it would have hurt. My strategy in that case would be to have sold as soon as possible. So while I would have been hurt on the way down, I still would have made money on the way back up. I would definitely categorize myself as a swing trader. Todays trades: YM2M ... long at 9975, sell at 9939 (major slippage on my stop loss at 9950, assuming I get the worst price on the 1min bar that goes through my stop) -$180 YM2M short at 9870 (slippage on my sell stop at 9875), still short overnight +$890.
Ctrader - it may appear that going home short overnight works the most - but that's because the market has in general been quite weak. At some point, that will change. Everyone has their own thoughts on this - mine is, I don't mind going home being short or long overnight, but I don't make a habit out of it, and I want to have 10 or 15 points of gains already built into the position from the previous day's activity. If I'm long, I want the market to go out at 4PM at its highs of the day (or lows of the day if I'm short). Finally, I want to know that the market isn't near a key resistance or support level; and that I'm not attempting to hold a short overnight after 2 or 3 days or more of unbroken "down" days. That's asking for trouble. You don't want to be the guy who went short overnight on 9/21/01 at 972, and then woke up the next morning to find the SP e-minis rallied overnight to 997. And do a gut-check by asking what's the worst that can happen? And can my account handle that amount of "one-time" risk? The 9-11 attack was about as big of an overnight "adverse event" as you'll find, and it cost about 90 S&P points, (or about 600 of your Dow points). That's about $4500 for a 1-lot S&P e-mini trader. Can your account withstand that kind of exposure? Or would that have wiped you out?
I really knocked the cover off the ball with this trade... short since yesterday, looking at a 200+ point gain now. Will cover at 9600.