I heard there is little or no hft activity in futures tick size is terrible especially with es however I think you are spot on...thanks for posting!
One good thing about the big banks, when they lose their ass, they can just get bailed out by the US Govt.
It's best to trade the ES long only and not short anywhere unless you really know what your doing. The S&P rises steadily most all of the time and and always finds support easily during intraday correction moves. The market rises 80% of the time. It falls 20% of the time. It just happens that it falls multiple times faster than it rises. Four to six years of uptrending, one year of down-trending. That is how the stock market behaves. It's also rather likely that you totally miss out on the down move if you are a trader too. The major down moves occur over like 1-2 weeks... And they are over!
If I was a new trader, I wouldn't consider day trading at all, time it takes to get decent, you could probably get a degree at Harvard. We both know you didn't backtest not nearly enough to lose this much money. I think it is best to specialize in one market, get married to it, same with forex, find one currency pair, cause each one trades differently. I only trade the first 30 minutes and last two hours (unless I have 2 full losses in a row), the time in between I have to cut back 3 of my 4 signals as the market is less likely to give low enough losing percentages for me. too often the smaller trader either doesn't know or take into consideration longer timeframes to find S/R where price is likely to bounce off, so they might be buying right into strong resistance. There are many nuances to trading the ES, and only by watching the screen for a few years will one discover them. Too many go to the Indexes, forex or Crude oil to day trade, but the Soybeans, Corn and Wheat often show much clearer trends and less chop cause most are not trading them. If you find you are good at one market, stay with it and just adding size.
Apologies, Getting back to this thread after a long time! The1 and Handle123 are very experienced traders. So, they have found a profitable way to trade first 20-30 minutes after the opening bell. I am hopeful with time I will also develop my skill set in that volatile time of the day. It does offer some good opportunities to make money. But for newbies or still struggling trader, I suggest don't trade first 20-30 minutes. Watch it and watch it carefully (also the last 30 minutes) for 6 months before you start trading them. Remember you have other 5.5 hrs of the day to trade! Handle123 made a good point that newbies shouldn't daytrade ES at all in the beginning. I think its a very valuable suggestion. Being able to trade 1 ES for more than 8000$ in margin and being able to hold overnight will make for a good start. A lot of very good points made by RedTankEra also. Thanks RedTankEra for your valuable contribution. So, I will offer one more suggestion today, based on my understanding/experience. Recommendation 3): While daytrading ES, most important price points to note are yesterday's and day's before OHLC points, and today's open in relation to yesterday's range. Also, current 10 day ATR (as a proxy for range/volatility) is extremely important from profit setting/stop placement point of view. If market is in a clear trend, its extremely important to know that. If we are in a range bound environment, know that. Just look at daily price in relation to its 10 day and 20 day moving averages. It tells you in a glance whether ES has been rangebound, or going up or going down. Its wrong to think that since you are day trading ES, its ok to overlook above numbers. Ignoring above numbers or being unknowledgeable about them will cost you a lot of money.
Recommendation 4: I call this rule of 2 trades per day. Newbies or struggling ES traders, do not take more than 2 trades per day, doesn't matter if you win both or lose both how many points you made or lost. This rule has many benefits: 1. Since you are a struggling trader, so it means on average you are losing money or are just breakeven while trading ES. Taking less number of trades per day first means a slower burn rate. So you prolong the time before your capital falls to zero and this added experience increases the odds to eventually succeed at ES. 2. If you are open to take multiple trades every day (say 6-15 or even more round-trips per day), by simple logic - you would be reversing your position multiple times. Do you know why this conclusion follows? HINT: Answer this: When are 'struggling traders' going to reverse their position? Answer is: Note, by definition you are a struggling trader, so chances are more often than not, you would find your trade in a losing position and thinking that you are wrong on direction, would reverse. As soon as you reverse, there is a decent chance that price will mean revert and you would find yourself again underwater, thus setting up for reversing again. Vicious circle. Can you see the point? If not, re-read and absorb. This is an important point. 3. Also,being limited to taking only 2 trades per day, you will learn to sit on your butt with your hands tied behind your back, waiting for that opportunity when you are very sure that you see a trade (be it for 1 point or 6 points). This sitting on your hands will teach you patience and result into higher quality of trades. Above is a generic post applicable to almost all instruments (not only ES) but it is an important post and its easy to underestimate its importance. Struggling traders - you should listen carefully. You will benefit Good luck.
Yeah, esp. in the era of central planning. The down moves are so rare, but when they come it's fast and furious. Incredibly difficult to time the downmoves because each downmove is invariably met by stronger buying and you can go broke multiple times trying to short a rising market.
Recommendation 5: Do not scalp ES. If you want to scalp, scalp 6E or CL or NQ etc. Can you see the difference between these contracts which make one contract worthy of scalping and another not? Think for few minutes before reading further! Time to tell you. In spite of having a good education and 3 yrs experience trading FX, I was stupid not to recognize this simple difference between contracts for months. I got too involved in the churns of the market and didn't spend sufficient time thinking about the differences among the contracts. Turned out to be very costly oversight for me. The difference is tick size relative to average range, or if you want to measure more precisely, average range in per cycle and number of cycles in a day (feel free to define cycle using 1 min or 5 min chart). CL can move 100 ticks in a day and you would pay 1 tick as bid ask spread, so ratio is 100:1. ES will move 15 points in a day and you would pay .25 points, so ratio is 60:1. Apart from tick against ATR, another aspect is being able to get filled at bid or ask. ES will not fill you unless price trades through your limit. Not so for other contracts (NQ/6E/CL), because size on inside bid and inside ask is much smaller compared to ES. So, in many cases, you will be able to buy at bid and sell at offer. Good for scalpers. Very important and simple points above - which I have understood only after months of losing money. Hell - noone gave me these tips or maybe I didn't search ET hard enough
=========== GM I think i lost money on ES for 2 basic reasons & related to making money in long silver & long gold, short Citigroup............ a] Benard Baruch said losse s= laziness; z]So part laziness, but ES is a great liquid deal, but doesnt trend well like the 3 i mentioned....... Not a prediction; gold can go thru periods of not trending well, but i like gold trends better than ES trends Also too many best & brightest /hair triggers in ES ]Turtles may invest/trade trends,LOL