Futures

Posted on January 30, 2008
Tags: Futures, Day Trading |

As you must know, futures are all the rage now since “everyone” started trading it ;-) And I want to be like “everyone” :-) Actually the real reason is that good opportunities in stocks trading were far and few between for my trading style in the last few weeks which was a bit frustrating (on top of personal difficulties with the traveling etc.) and I’ve been wanting to add something to my trading toolbox for quite some time now, be it forex, options or something else. Also trading full time means I’ve got the time and brain capacity to put some effort into it (when I’m not being too lazy).

So I was doing a bit of R&D (OK, maybe slightly more than a bit) since last week looking through a few charts and beginning to form some sort of a strategy. Today I actually took my first futures trade, ever. In fact I took 3 trades, all on the ER. The first 2 were pre Fed announcement and were stopped out and the last 1 was after. The last one was the only winner but was sufficient to cover for the losses and make a bit of money. Generally speaking the “system” in the making is just a mix of 2 indicators and the Dummy shtick. You know, trying to find a trend, a logical
place of entry and stop and a decent risk:reward. Nothing too fancy or
colourful (yet?). I’m not going to write about every trade since I’m still quite far from firming up the strategy and how I’m going to trade it, heck I don’t even know yet how much the money I made is in ‘points’. I’m still figuring all this stuff out and just trading off charts and price action for now.

P.S.Needless to say, if this experiment goes pear-shaped I will never write about it again lol

Comments

11 Responses to “Futures”

oonr7 on January 30th, 2008 3:58 pm

congrats on your first futures trades. The best part about futures is the fact that you only need to concentrate on a couple of symbols if you want. Did you trade ER2??? Also, with ER2 every point you make is equal to $100 per contract. With ES, it’s $50 per point, per contract. Right now, 3 contracts are my limit… but I’d like to get to a point where I can trade 5 with confidence.
Good luck.
eyal on January 30th, 2008 4:08 pm

oonr7: Thanks. Yes, the ER2. Ah ok, so I made 2 point lol. I exited way too early. I want to get to 2 contracts quite soon to make sure I can at least sell half and trail half without getting too antsy about leaving money on the table. I know what you mean, it’s nice to not have to jump around from one symbol to another like with stocks. Anyway, I’m throwing all kinds of stuff against the wall, we’ll see what sticks.
oonr7 on January 30th, 2008 4:17 pm

yeah, that’s what I’m doing as well… trying out different indicators.
Rick on January 30th, 2008 6:09 pm

I have a feeling it is easier to get more consistent trading the same thing every day (i.e. S&P E-minis) but I think I would get bored with it. And if the S&P is barely moving, of all the stocks you can usually find something that is moving. It does seem like everybody is going with futures now, probably because the increase in volatility in the markets makes it possible to earn enough money now. I read there are tax advantages as well.
eyal on January 31st, 2008 10:38 am

Rick: I don’t mind the boredom part, I entertain fine myself outside of the markets :-) Who knows, we’ll see how this experiment works out.
Jeff on January 31st, 2008 5:04 pm

Welcome on board! I didn’t know “futures are all the rage now”, though.
Rick on January 31st, 2008 9:10 pm

I’ve been listening to all the interviews on the trader interviews site and it seems like about half those traders are trading e-minis.
eyal on February 1st, 2008 4:33 am

Thanks Jeff. If you’ve got any wise words to share I’ll be happy to hear :-)

Rick - Which trader interviews are these? Lots of people are attracted to futures because of the leverage and dreams of making a few points on 20 contracts. Needless to say, most don’t realize this dream.
Jeff on March 3rd, 2008 4:50 pm

sorry for the belated reply. Wise words - let me see… buy low sell high?
But seriously, this is partially what i try to do. I trade a very short timeframe on the verge of scalping. what I do is basically i try to go with the flow (the trick of course is to identify the flow). the other elemnt to my “system” is i try to identify as early as possible if is going to be a range day or a trend day. I do that mostly by using market profile and then reading the tape (for order flow). Lately I’ve also been trying to pay attention to the nyse Tick, a la Dr. Brett. If a range, i try to buy low and sell high like I said. if it’s a trend day I buy the high or sell the low and try to sell higher or buy lower later on.
All of this sounds corny, i know, but it works for me (I trade the e-minis mostly). I won’t bother you with details but don’t hesitate to ask if you have any questions.
as for my setup: same as yours, except i use bracket trader for execution and ninja for replay.
Oh, and I don’t have CQG as yet - though i’m sure i will, one day, soon after i make my first couple of millions…
eyal on March 5th, 2008 12:41 am

Jeff - thanks for the reply. Sounds like a different mindset from trading stocks. Also I’m not sure I can be a scalper. I’m still working on the futures part of my trading. On CQG, I dropped the idea, too expensive, not really suitable for stocks and the new internet connection solved the problem :-)
jeff on March 5th, 2008 11:05 am

well that’s just me. A lot of future traders are swing or position traders. And a lot of them don’t trade the indices, necessarily.
One thing that comes to mind though is that if you trade stocks, you can look at the futures for hints. But if you trade the futures, it’s more tricky.