Let me clear the air. i do not trade spreads. I am an outright index futures trader! spreads have done nothing in the past and in the future but cause me massive hedaches and if you like the idea of trading for peanuts and paying over 50 % in fees and commissions then go ahead and try spreading. it doesnt take much or long before you realize just how much more money can and will be made trading regular old futures contracts that are now called outrigths. They are just futures contracts to me and i buy them and i sell them on a daily baisis most likely to ultra fast machines as well as slow humans like myself. Spreading is like option writing naked. you do great for a lil while just like everything and then KABOOOOMMM all of your hard work money energy and confidence are wiped out in a few minutes when ONLY 1 side of the spread moves and you are on the wrong side of it so it is vurtually an OUTRIGHT position! this happens a lot. Brokers want you to do twice the trades and twice the fees and so do the HFT they love that idea. stop searching for secrets and holy grails and work on your skill at trading what you like or are interested in and have fun!!
I cannot dedicate too much time to this small account challenge but I am when i need a pressure break from my other stuff running some trades. this is day 1.5 but lets just say day 2 and the account is now at 1,910.03 in equity. this is a NET gain of 210.03 on 1,700 for my starting equity. this is a net 2 day return of 12.3 % so far and I have not been able to dedicate that much time to it. All it will take is one bad trade to wipe this out so no reason to write home about it but i am off to a good start. have a great day
there are guys who trade lumber and make big money bonds nad make big money guy swho trade indexes and make money and thre are prop firms with the best of the best technology and hft firms who trade it all and do it all option spreads futures spreads and options and futures and swaps and YOU can make money in all of it if you are good at it. if not you will lose at them all so just pick your poison and make sure you dont get poisoned. all of this is my opinion.
the tradeovate platform is fast enough to make money and i am working now inmy free time to try and customize it so it is a little easier on the eyes. Screen staring is a real stress and should be mitigated to help you succeed. set up your monitors so that you have a very comfortable viewing angle and brightness and color scheme. this matters
I must respectfully disagree, i recently got into spread trading (ES/NQ) and so far i really really like it. My main trading strategy is swing trading stocks for some time now, next to that i day traded futures with mediocre succes, i have read about spreads before but never took it to serious, up until now at least. In my opinion there is much less risk involved. I do all my trades based on the difference between the % gained/lost in ES and in NQ, the smoothness in the curve is so much easier to trade compared to directional. I take a small bias in the NQ (most of the time), so i do not follow the exact spread ratio, i do this because i find NQ to be leading most of the time. If the market goes up, NQ goes up more than ES and if the market goes down NQ goes down more than ES (at least for now). All the trades i took so far had very limited losses before running into profits, the risk reward ratio so far has been outstanding and i only had one losing trade the last 3 weeks. When i traded directional i often closed trades early or got stopped out to see the market move in the direction my trade was, specially in NQ since it can jump around quite a lot. When trading spreads none of that matters as much, i don't care if NQ jumps around in a range of 30-50 points, breaking s/r and turns back right away, ... All i care about is the spread ratio so it is much easier to hold trades over a longer time since the spread curve is much smoother compared to the outright curve. Of course it can happen that only one leg of the spread is moving, but that shouldn't matter because i also use stops when trading spreads. If i am wrong and the spread is widening while i expected it to close, i just get out and wait for the next opportunity. Just like you would do with a directional position. The main reason why i find spread trading easier compared to directional is that the general direction of the market is less important, specially when you do trade the correct spread ratio. If ES is down 0.2% and NQ is down 1% most of the time the spread will close (if there isn't any news driving the tech market down. In days when there is news driving the tech market down the spread is more likely to get wider) Today is a perfect example, 15 minutes into the day ES was down around 0.4% on the day and NQ was down 1.1% on the day without any fundamental reason for the NQ to be down so much compared to the ES, so i bought NQ after it got back above yesterdays US session low and shorted ES right until the spread completely closed and both markets were up around 0.03% on the day. Would i have made more profit with a directional trade in NQ only? Sure, but the loss would be a lot higher as well if NQ kept on dropping, if i was wrong and NQ didn't catch up with ES, ES probably would have dropped significantly harder than NQ since at that point NQ was already down 1.1% and ES only 0.4% with no obvious reason for the difference. Either NQ had to catch up with ES or ES had to catch up with NQ. So even if i was wrong about NQ going up at that point to catch ES, the loss would be very limited and it is even likely that i still would have made profit when the spread eventually closed. I do take a small directional bias in NQ since i only enter long when i think NQ is going to go up anyway. If i am uncertain of the direction in NQ i do only trade the exact spread ratio to be absolutely neutral. Now why do a spread then instead of just a directional trade you might ask. The reason is that if i am wrong and NQ doesn't go up straight away but might retest the low or trade in a range for quite some time, the chances of getting stopped out with my spread are very small while in NQ when it is jumping around like crazy, the chances are much higher. There is much more room for error in spreads, direction isn't as important, timing isn't as important, ... at least that has been my experience so far. Sure you pay double the commissions, but it is well worth it for me. I gladly pay a few $ extra commissions when it gives me ease of mind, less DD and a smaller chance to get stopped out as i would in a directional trade. Now i must say my experience in spread trading so far is only a couple weeks however i am in no way new to trading the indexes, so my opinion can change in the future and i am definitely not as experienced in spread trading as some other members of this forum. But for now i think the pros outweigh the cons by a great margin. Currently i am only testing the waters with MES and MNQ, but if things continue like they are i will probably start scaling soon. Since i do take a small bias in the NQ most of the time i am still looking at important market levels in NQ, market internals, larger time frames and i only take trades in the direction the spread has been trending longer term since spreads are strong trending markets to reduce my risk, a tip i got from another member here. The most successful trades i took so far were swing trades on the spread, but i do like to play around with day trading the spread as well. But as you have said work on your skill at trading what you like or are interested in. Whatever works for me might not work for you and whatever works for you might not work for me. That is the beauty of the market, there are just so many way's to make a profit.
did you start a journal and are you showing live trades because i will tell you you cannot practice spread trading in a demo account at all period no way. just like in regular outright trading you do well with demo and in spreads it is even worse because you are "ALSWAYS GETTING FILLED" you are never not getting filled and you are always getting great prices. you think the algos just dont look at your order? you think the algos dont game even more the mouse click spreaders! think again. most stopped doing it in 2008 and that was smart. but who am i to tell you what to do. all i do is post up my daily gains and losses in a 1700 dollar account.. what do you show as proof you are actually trading it live and doing very well and what is very well by the way?
Of course i did, just as i told you in my post. Now if that is all you get from my post i am out of here.
I am not trading demo and i am not interested in starting a journal. By the way, why would algos affect me? I am not scalping the ES or NQ spread if that is what you are referring to. I trade the spread between ES and NQ, my trades last hours at least so even a 1 point slippage on each leg wouldn't hurt me ...