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walterw

Silly question to ES traders

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Hello everyone... I am a futures scalper and all my trading career has been focused into hi volatile futures as Russell and actually Ym...

 

Lately I started to look some ES charts and I find them atractive as they actually look like they are having some nice range, and look less noisy than my ym charts...

 

My question to ES traders is : Do you consider ES Swings more solid than ym or Russell futures ? (less noise )... looks like when ES swings for example a 1 min low on a given cycle... it doesnt have that much noise as ym or russell does...

 

any input will be of great value... thanks Walter.

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Hi Walter!

 

I just "discovered" ES after months of scanning stocks, looking for RR ratios that were profitable, and trying to find price structures that were relatively predictable. What was I thinking!

 

So I do not know much about comparing ES to others, but I do know you are right on track regarding scalping these indices! Particularly if one pays attention to money management and stops (mental or actual), it really is pretty straight forward to win at least a few ticks a trade, a few times a day, per contract.

 

B

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Walter,

 

I find the ES has much less of a range than the ER2. But as far as solid moves, I would say Yes, Yes, Yes!....

 

I find myslef trading the ES more and more these days due to the fact that once the moves starts it generally has some steady momentum.

 

The ER2 is much more whippy and thin on smaller timeframes.

 

:cool:

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Walter,

You'll find the ES is the 'slow and steady' contract vs. the ER2. You won't find as many wild whipsaws and spikes as you might with the ER2 and maybe even the YM. I think it's a function of the massive liquidity and all the pro's there - humans and computers. It's much too efficient to see wild, random spikes consistently.

 

Of course, trading size is not an issue either which is also attractive.

 

So if you are after an index contract that is less 'spikey' the ES is a good option and probably the best one. As a scalper, you can easily load up on the number of contracts trading w/o worrying about setting off any red flags or anything.

 

One note - when you watch the contract and esp in simulation, assume in order for you to exit a position that price must trade THROUGH your price level and hit the next level to get filled. Example - if you are trying to exit a winner at 1500, price will need to touch 1500.25 in order for you to safely assume you get your exit price. NEVER assume that if price touched your level that you are out. Unless it's an MIT order of course. ;)

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"One note - when you watch the contract and esp in simulation, assume in order for you to exit a position that price must trade THROUGH your price level and hit the next level to get filled. Example - if you are trying to exit a winner at 1500, price will need to touch 1500.25 in order for you to safely assume you get your exit price. NEVER assume that if price touched your level that you are out. Unless it's an MIT order of course. "

 

Second that! Due to immense liquidity and somewhat large tick size, fully expect to have price trade through your order prior to a fill.

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agree that ES is a good one to trade.

 

example:

 

ES has done a big move up and does a blow-off to 1435.50 and instantly reverses with just a few hundred contracts trading at 35.50. This is generally a good pivot high now and you can actually place a stop at 35.50 and feel ok about it, IMO. The move to 35.50 was an extreme that probably had some panic to it by shorts and gunned stops to that level. It might very well go test 35.00 or 35.25 -- but 35.50 should hold.

 

This seems to be a less common situation for YM and ER2 -- and NQ for that matter. that spike to '13009' on YM that looked like stop-gunning to the nth degree might actually run stops again above 13009 --- just for the pure fun of it. Russell is worse, IMO.

 

(This situation can and does of course happen on ES --- but its much less frequent.)

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Walter,

 

I have found the same pattern as well.

Ym seems more choppy this days. YM will trigger a long one, pull back for few ticks and take off. The only option for me is to widen my SL but the target range is still the same giving me a poor RRR of 1:1.

ES seems more consistent and getting nice movement that can last for few good points. YM is following the ES and has weird pattern sometimes.

 

And last but not least, if your strategy work for both, volume on ES is just fantastic, you can push easily 50 cars with no slippage.

Sky is be the limit..:o

 

I am trading ES with a 237 ticks chart while YM is on 144.

 

Larry

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It has less granularity than the contracts you mention, they need to tick 2.5 times for each of its ticks. It is also much thicker as other have mentioned. A few years ago it all but 'died' range and volatility wise. Now its nice.

 

Yesterday afternoon it dropped 7+ points in a couple of minutes running stops. Shortly after that it advanced double. YM dropped a little under 70. Slightly contrary to what others are saying it is displaying similar characteristics as the ER2 of old and the YM (despite it's 'thickness' ). In a nutshell volatility. 5 minute bars that are 5+ points or 70k contracts are not uncommon. Sometimes those overlap a lot (yesterday) i.e. back and fill, sometimes not (day before). I would say it has more in common with other index futures than differences.

 

Come on over there is plenty for everyone :)

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Thanks everyone for the great feedback ¡¡ its clear that ES has some very good qualities to be exploited... what I like and now with your feedbacks I get confirmed, is the less amount of noise and the great volume capacity...

 

I always wondered how is the big ES contract traded (pit) if I wanted to send an order on the big ES, should that be on the phone thru the broker ? or could it be done by an electronic way (orders) ? just curious on that..

 

thanks for your feedbacks ¡¡ cheers Walter.

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Walter,

 

There is no free lunch. Tradeoffs work in both directions. The ES is the blessed mother of eminis and home of the professionals. Great liquidity. Less noise? Perhaps, but not a place for novices. More like the Texas Hold Em of trading.

 

Caveat emptor.

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  carcanaques said:
Walter,

 

There is no free lunch. Tradeoffs work in both directions. The ES is the blessed mother of eminis and home of the professionals. Great liquidity. Less noise? Perhaps, but not a place for novices. More like the Texas Hold Em of trading.

 

Caveat emptor.

 

I disagree 100%. Just b/c the professionals are there does not mean this is the 'texas hold em of trading'. The texas hold em of trading is the ER2, or QM or Natural Gas...

 

The ES is one of the most smooth indexes and I don't see how you could call that the texas hold em when you have the ER2 and it's erratic moves right there in front of you.

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Hi,

 

I'm new to the site. From my trading & observations, an excellent living could be had scalping the ES for 2.00 points a day. Actually if you took only one trade a day using a 5-lot for .75 pts daily yields approx. 50k a year. Increase size for more...You must however, have a viable method/system that's robust enough to give out enough signals to counter the inevitable losses that come along. If consistency is desired, in my humble opinion, this is the way to go. You could literally never have a losing day...Way more secure than working at a job!;)

 

Best Regards

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Walter deserves a free lunch!

 

But even though he does, he doesnt need it when trading futures, apparently based on his analytical threads here.

 

Regarding the art of Texas Hold Em - what IS Texas Holdem is scanning equities looking for the right profile, playing them during earnings, volume spikes, etc.

 

The ES is by far the least gambled instrument in the market, in my opinion. It has predictability, and it has excellent return ratios. Setting reasonable stops, then using a handful of standard indicators nets at least a dozen points a day. No gambling, just daytrading at its best . . .

 

I would like to understand why you think ES is like Texas Hold Em?

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  BlowFish said:
As a small aside I just noticed ER2 is still trading on Globex. I thought it was moving?

 

Yes it has "moved" to ICENYBOT, but will be available on CME until end of September 2008

JERRY

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