this thread was carefully crafted to entice successful ET members to give up their goods scientist never intended this as a venue to disseminate his redoubtable successes.
Good post. I've always looked for the "2nd" market. There is less competition and more edge. Just being able to watch the primary market (ES) tick up first is at least a partial edge. The Dax is also one of the few markets where you can still get on the bid and offer without having 100 lots ahead of you. Don't forget the FTSE, CAC and SMI futures. You can make money on the ES, Bund, and other ultra-liquid markets. However, my experience is that you have to be very selective indeed in your trading. These markets have the best daytraders in the world looking at them constantly, and all obvious edges are gone e.g. there is always a huge queue on the bid/offer so you lose the bid/offer edge. My experience is that you can have say 2-3 big days per month (e.g. 10 ticks per contract profit or higher on the Bund, 5 points+ on ES), 1-2 bad days (ditto in reverse) per month, and the rest of the time you basically churn with marginal profitability. You really have to make almost no mistakes, and really seize on the few fleeting opportunities to score big each week/month, to be able to do size with confidence in these markets. I've found that although I can make more profit trading these markets and upping my size, my volatility is significantly higher. If I normalise the volatility of results, to roughly double my income by trading the bigger markets would require 5-10 times the volatility. A more skilful trader could probably improve on that, but for me it isn't worth it. Personally I would rather make x amount with acceptable volatility, than 2x with worrying volatility. So I stick to the easier markets like the Dax, FTSE, Gilt, etc. The drawback is that there are size constraints due to slippage and liquidity, but you can still make a very nice living.
Another nice post. Do you guys trading Dax make most of your money before the US markets open, while it is opening or after it opens? I havent paid much attention to the DAX or ESTX50 after the market here opens. Maybe I should. ES is harder to trade, no doubt. I only make a dozen trades a week and am usually done by 11:00 as I find it impossible to trade after the morning volume fades. Do you trade DAX much between 11:00 and 2:00 EST?
Thanks Exactly, take it easy on the bolognese! I don't scalp the dax but something not unfamiliar. Currently I am investigating new ways of positioning in liquid markets. I don't think in buying here and selling there anymore. More so; I am buying in this area, might buy some more below or above, but not below the area. The last add constitutes the entry price level for profit or loss taking. This takes some of the strain out of having to be right exactly to the tick. I don't do this on high volume, it's better (and easier) to just take one price and take it all there I find. This is an ongoing project. Not sure if it will keep up.
All Posters: I wonder if any of you veteran DAX traders have reservations about trading during the holidays? If there is a problem with execution or connection to the broker is interrupted (as happens so often with IB), you might have to wait a while to get someone to answer the phone. I realize that the popular conception is that you use your back-up broker, but to do that, you have to know what where your existing position is. This year I have seen more than one ocassion where my connection to a broker has been interrupted and I did not know if I had a position or not. I am interested in your comments. Best Regards, Steve46
thats the trouble with scalping, I went long at 53 ,sold at 56.5 and saw it go 30 pts higher at the same time as I got my sell fill