I recall using a Zweig trading system in the Merck (MRK) example above. http://www.elitetrader.com/vb/showthread.php?s=&threadid=76216
I suspect the values of the Standard and Poors 500 Index tracking stock symbol SPY correlate with the values of the Standard and Poors 500 Index futures contract. You might try to develop a longer term profitable trading method using SPY stock. I have about 13 years of daily SPY price data that I remember downloading from yahoo.com for free. I recall testing a system to buy at the highest price in X sessions and sell at the lowest price in X sessions. Risk to protective stop is $ 600 in the test and the initial account equity is $ 100,000. Testing 10 values for X from 20 to 300 sessions all show profitable results. My notes show other trading methods generate profitable outcomes also. When a futures contract nears expiration it is necessary to exit the near contract and enter a new position in a more distant contract. Once you develop a trading system for SPY stock then you might test that system on index futures, gold futures, cotton futures, tbond futures and others.
i did exactly that, except with DIA not SPY i traded DIA for 6 months before I started trading YM this offers several advantages. each 100 lot of DIA stock means $1 per dow point movement. this is 1/5 the size of the dow mini so, i could trade 200-400 DIA shares and simulate trading 2-4 contracts YM except at 1/5 the size and unlike papertrading, it's real money, and real fills also, YM has better fills than DIA if you have a system that can trade DIA successfully, it will work on YM similar concept with SPY and ES and yes, they MUST track closely, or ARB opp's present themselves. sometimes on wild news runs, the futures will get out of whack with the cash underlyings by more than the normal PREM spread. it's pretty rare, and ARB's pounce all over it in a heartbeat to capitalize on the riskless trade
"Would you in general consider prop trading and its extended leverage gambling? or is it all relative, as you trade in and out with precision?" all depends on the person trading. Depending on what one's definition for gambling is I'd say that I may fit it as I find the results of any one of my trades close to 50 percent, lucky for me in general it's just above 50 which keeps me profitable. As for today the percentage is close to 10, hence the post during the day. It seems to me there is an perception difference between the core daytraders and the people posting these "oil will reach 80 by March" threads. The former judge their success by the sum of all trades within a system/method while the latter place all the focus on each individual trade. But since it's hard for me to believe that anyone could be right 8 out of 10 times on any time frame, it seems like it would be exceedingly difficult to make a living off such calls without a substantial capital base or trading opm. If you're right then great you just made 50k on the trade or whatever, but if you're wrong...
Hey NZD, Whats really sick is selling premium for a living...basically you are praying for time to pass so you can collect your premium. There is really something demented about that