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MadMarketScientist

If This Was the Last Market You Could Ever Trade...What Would It Be?

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This past week we held a "Post of the Week" contest answering the question:

What is the Single Largest Roadblock Standing in the Way to Your Trading Success?

 

The winner: http://www.traderslaboratory.com/forums/208/what-single-largest-roadblock-standing-way-7886-2.html#post96268 (way to go "Daedalus")

 

However, you all did great - there were so many excellent responses that it was no easy decision. So, this week I'm going to ask a new question, and this time ask that you "Thank" people on the threads you think are the best. Just click that button and that will be your vote - of course, feel free to vote more than once -- if a post speaks to you.

 

Here's the question.....If you were told that you could only trade one market from today and forever, what market would you choose to trade? If all other markets were restricted from you, would it be a forex pair? Futures contract? A single stock? And, once you make your choice, would you be a day trader, swing trader, position trader? It forces us to look at really where we've had the best success so far even though most of us probably continue to always pursue something better. How would you choose to trade it?

 

I'll weigh in with my answer. Crude Oil Futures would be my choice. I know sure, there's a chance we wipe out the demand for crude oil in upcoming decades but I'll take my chances. I would day trade it and swing trade -- it can be effective on both, and it would be the one market I would never want to give up if forced to choose. It's not the only thing I trade now but I'd say it's my most consistent.

 

You?

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Ok, I guess I felt this was a compelling question but I must be alone in that :)

 

I find too many traders bounce around from market to market, let alone strategy to strategy that this question might force you to focus in on what market should be or become the center of your universe.

 

Maybe it's just too hard to pick just one -- but if you had too..........

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Right, that's the key - for example if you looked at trading the index futures now they're moving amazing in the last few weeks, but it was several months before that of dull trade. They tend to ebb and flow a lot and volatility doesn't stay high all the time like it used to. Whereas CL has remained fairly steadily crazy for a long stretch of time.

 

If I had to choose in forex I would go with the GBPUSD over the EURUSD -- it simply has higher volatility more consistently. To me that's preferred for forex.

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Hiya,

 

The reason I never responded to this thread is in part due to volatility changes. Like MMS mentioned above, GBP/USD is probably the most consistently volatile major and that is where I like to put most of my effort. But having said that, I also do look at some of the GBP crosses and trade from them when the vola gets a bit lower or I find the context to be somewhat choppy/messy. If I had to pick just one, I'd pick GBP/USD :)

 

With kind regards,

MK

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Very valid points. I know when I started trading too many years ago compared to now I'm trading totally different things. We are reliant on volatility holding up in our chosen market.

 

This exercise though helps me realize that only a few markets really rise to the surface and maintain their trade-ability over the long haul. Right now is a good example, the index futures were kinda dead for many months but lately have been great to trade -- but they tend to fall back to sleep so you have to be nimble with them.

 

I think Dax Futures is an index that stretches further in both directions than the US index futures so that would be a reason I'd choose it if I had to go with an equity index.

 

If I could control the slippage, NG might not be a bad one either.

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I'd go for ES. The changing volatility cycles keep me on my toes. I think being adaptable and flexible are key to being a trader. To be honest, I find trading boring sometimes. I like the thought and idea that gets me out of bed in the morning, but the actual act and the focus required can be like watching paint dry (as Im sure you know). Having to adapt the strategy every now and then keeps me interested - as a challenge.

 

For me, trading a market with the same vol day in day out would probably lead me to the mad house. High vol is nice sometimes IF you get on the right side, but for me, low vol is cool as it offers higher probability as markets tend to stick in value in such conditions. Going in with size in low vol screaming and shouting at the bids to be pulled when youre 1 tick away from a fill! lol! aaah trading.....

 

A close second would be either bonds (30 yr) or GBP/USD. I would have said the EuroFX, but that may not be round much longer - I should buy some Puts as a retirement move! :haha:

Edited by TheDude

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Funny on the Euro comment. Next stop parity with the dollar?

 

I'm with you on the "boring" aspect. I had to come to some terms with myself and realize I'm not a good trader of anything that takes a while to move or develop. To impatient so I tried to start moving to markets that move and move quickly. They can be more difficult to trade but I had to finally relent and realize that if I wasn't trading a market with fast movement, I'd end up forcing a slower market to trade more often. Usually not a good idea -- in order to just generate some excitement.

 

I'm sure my broker appreciated the effort in the form of more commissions but it wasn't good to the bottom-line.

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Crude is certainly an excellent market. I am hoping one day we'll be trading in a cleaner type of energy source and that crude will ultimately dry up. lol... For now though, I'm with you on crude. Great market to trade nearly every day.

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Great question MadMarketScientist. To be honest, this one has made me think and has caused some internal conflict. Part of me wants to say CL for many of the same reasons stated above. I have traded CL since early 2010 with great results. I took a different road than you did. Looking back at where I have come from, I used to lean towards the slower markets because I was able to really think things through. However, like most traders the attraction of getting done with my trading in 20-30 minutes opposed to 2-3 hours really got me hooked on CL.

 

On the other hand, I love to swing trade. One stock that has treated me great over the years is Apple. Swing trading Apple using options might even top CL as my top choice. I have traded Apple for so long I have a really good feel for how it moves. Daytrading CL is fun and very profitable but I don't always feel as comfortable with the volatility that I do trading Apple.

 

So all that to say I'm going to go with swing trading Apple using options as my market of choice. I can just about guarantee I'm the only one that is going to answer this question with swing trading a single stock.

 

Cuttshot

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Another CL fan. Agreed it has many virtues.

 

NG also trades similar but slippage is more of a factor - if you ever consider it you really need to trade NG with stop limits or you'll be in for some shock on your executions.

 

One other note on CL I've noticed some behavioral changes in the market in the recent months - perhaps somewhat attributed to the BP oil spill debacle -- this article somewhat confirmed some of these suspicions:

 

BP Loses Trading-Floor Swagger in Energy Markets - DealBook Blog - NYTimes.com

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Lately gold has been a great trading market. Also, as crazy and volatile a market as it has been lately, I continue to have consistent success with the Russell emini. It just requires a lot of discipline and a tight trade plan. But long term, I've had great success with it over the years. I also really like the EURJPY during the US session. Ok, so I cheated with three choices. ;)

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