fwiw, if one likes to trade the spy or es, my favorite strategy has been to take the current vix and multiply it by ~3. in the past few months that would approximately correlate to 6.5 - 7.5 spy points. now if the spy drops or rises by the stated amount within 3-5 days and gets close to or hits a major support or resistance level, this would present a very high probability trade to go long if spy drops or go short if it rises. this strategy is perhaps best suited for those who are position or swing traders. of course, because many of us are prisoners of our hard wiring, I have not always been profitable. also, since nothing is a sure thing appropriate targets and exit points need to be followed. I have observed that if there is very little reaction to the move ~16-36 hours on 4 hour chart it may be best to just exit the trade or follow the trend. there may be flaws in what i have mentioned so caveat emptor. if anyone has suggestions or knows how to test with historical vix data, please post. this strategy begs the question, " where was I when the market moved so aggresively within the 3-5 days." answer: 60 work week.
some considerations: how much capital is available, and, how much of it is willing to be lost is the trader scalping/intraday oriented or is Day-to-Days trading better futures accounts can be opened for a minimum of $2,000, with most intraday margins starting at $500, but overnight margins are as high as $26K for the Russell 2000, those amounts are subject to change by both the exchange and broker; also some futures have 'limits' and some don't, plus there's the risk of 'overloss' retail online fx pairs trading is attractive mainly because of the low margins of both the min account requirement and micro, mini and full lots availability the problem with fx is the spread which makes 'scalping' very difficult when compared with the CME/Globex Euro FX and other currencies which can be scalped - rt comm is eg: $4.50 and 1 tick is $12.50, but o/n margin is $2K+ fx however is advantageous since the o/n margin remains the same as the daily/intraday margin, tho there is an interest +/- charge or flat rate fee finally overloss cannot occur trading fx since the broker's sw will close all losing positions if the account margin drops to the broker's limit
Wonder if you could give out any names regarding commission firms? Any recommendations? Thanks for your post.
Don't take tax in consideration. Trade what you feel most comfortable with. Better to pay higher tax rate by being successful than to pay lower tax rate by being so-so successful.
Sorry but there is hardly any educational material on spreads.......pretty much just learn how the market moves fundamentally and trade them.
######################################################### Sounds a bit tooooooooooo good. Q.: by doing what/trading how. Thx
Sorry for the delay, haven't looked at this thread for a few days. I have not kept up with the changes in the FX broker department as i am very happy where i am. if you want to trade stuff in addition to FX, go with IB. Its a commission firm, so they will give you best possible price, and you can trade damn near anything with them (which is why I use them). for FX only, the one firm i still know of that isn't a bucket shop is hotspotfx. i have a friend who is a pro FX trader who uses them. Not sure what the commish is, but lower than what you'd pay on a spread with the bucket shops, and fills are computer matched which means instantaneous vs the bucket shops "deciding" if they want the trade.. Money is insured there as well against any fraud. this is BIG in this industry. A third party bank holds the bond. my trader friend uses the charts and news provided by hotspot. Also uses Xtrader provided by them for DOM and entry. this company caters to pros, but anyone can open an acct with 7500 i believe. must trade full size lots however, so know what you are doing before trading there (100k min trade size). i personally wouldn't trade anything less than this anyway as you'd never make enough money to live on. hope this helps. jay