Why Futures Are Better

[Gekko78 10]

When I started trading it was FX , then I moved to stocks , then back to FX......finally I landed at my home in futures.......can across an article and wanted to share as I agree with most of this stuff ESPECIALLY the FX part.

 

 

Enjoy

 

The Powerful Advantages of Trading the E-Mini S&P 500 Futures over Stocks, ETFs and Forex

 

Have you ever wondered why many traders prefer futures over equities and/or Forex? If your answer is "yes" and you are interested in daytrading this is definitely an article you should take a minute to read. Make no mistake, there are substantial risks involved with futures daytrading and it is not suitable for all investors, but I feel the following 20 points demonstrate the particular advantages of daytrading the E-mini S&P 500 over trading stocks, Forex and ETFs like the SPDRs and QQQs.

1. Efficient Market

 

During normal market hours the Emini S&P 500 (ES) futures have a tight bid-ask spread of typically 1 tick or $12.50 per contract. With a current approximate contract value of about $50,000, that comes out to .025% of the contract value, which is one of the best spreads in the trading world. This spread should be considered your cost of entry (not unlike commissions) to enter and exit the market. The wider the spread, the more the trade has to move in your favor just for you to get to break-even.

 

Depending on the stock or currency pair you are trading the bid-ask spread may be much wider. Also, since Forex firms "create" the market and therefore, the bid-ask spread, they can widen it to whatever they see fit. Even when Forex firms advertise a fixed spread, they typically reserve the right to widen when they see fit. Typically, this spread is anywhere from $15 to $50+ depending on the currency pair and market conditions.

2. Central Regulated Exchange

 

All ES trades are done through the Chicago Mercantile Exchange and its member firms where all trades are recorded in an official time and sales. All trades are made available to the public on a first come, first served basis and trades must follow the CME Clearing rules, along with the strict CFTC and NFA rules.

 

Forex trades occur "over the counter," (off any exchange floor or computer) where there is no centralized exchange with a time and sales report to compare your fill. Traders with different firms can experience different fills even when trades are executed simultaneously. Even more alarming is that in some cases the Forex brokerage firm you have an account with takes the other side of your trade and is therefore "betting" against you. Even for equity trades many stock brokerage firms direct your trades to brokers that give them a "haircut," rebate or kickback for your order or they go to dark pools or are shown to flash traders before made available to the public. Again, this can become a conflict of interest since your order may not be getting the best possible execution.

3. Low Commissions

 

ES commissions are only about $2.00-$3.00 per side and larger traders can even lease a membership to further reduce their fees. This low transaction cost allows daytraders to get in and out of the market without commissions significantly cutting into their profits, but of course the more trading you do the more this will impact your bottom line.

 

While most Forex firms do not charge a "disclosed" commission, they make their money by creating their own bid/ask spread and taking the other side of your trade, typically costing much more than the transaction costs of the ES. The average discount stock brokerage firm charges $5-10 per trade, which can really eat into your potential daytrading profits.

4. Level II Trading

 

You can see the 10 best bids and 10 best asks along with the associated volume in real time and you are allow the placement of your order at any price you wish when trading the ES. This transparency of the market’s orders allows ES traders to see where and how many orders have been placed ahead of them. For short term daytraders this information may be very valuable and may be used as an indication of future market movements.

 

Most Forex platforms do not offer Level II type pricing and for the few that do, since there is no centralized market, it is only the orders that that firm has access to and not the entire market. Also, most Forex firms do not allow you to place an order within a few ticks of the last price or between their posted bid/ask spreads, further limiting your trading abilities.

5. Virtually 24 Hour Trading

 

The ES futures market is open from Sunday night at 5p CST until Friday afternoon at 3:15p (it closes from 3:15p-3:30p and also closes daily from 4:30-5p for maintenance). This allows you to enter, exit or have orders working to protect your positions almost 24 hours a day, even while you sleep.

 

Even with pre and post market trading, the stock market is open less than 12 hours per day, and the liquidity during these sessions are not always good.

6. All Electronic Trading

 

There is no trading pit for the ES which means there are no market makers, no locals and no floor brokers and all orders are matched by a computer on a first come-first served basis no matter how large or small they are. This means that all traders see the same level II market and bid/ask spreads with an equal chance to hit them.

 

While most Forex firms offer electronic trading, some manually approve each order at a trading desk because they are market makers against your orders. Many times larger traders are given preferential treatment and better bid/ask spreads.

7. Leverage

 

Of course more leverage is a double edged sword since higher leverage equates to higher risk, but one Emini S&P contract currently has an approximate value of $65,000 and can be daytraded for as little as $500 which is 1% of its total value (about 100:1 leverage). Even if you hold a position overnight, the current overnight margin is only $5,625 which is still less than 10%.

 

Not all stocks and ETFs are available to be traded on margin, and the ones that can, require at least 50% margin to do so. US regulated Forex firms are not allowed to offer more than 50:1 leverage on the major currency pairs and 20:1 on the other currencies. This high margin requirement may be very limiting to daytraders who are only looking for small market movements.

8. No Interest Charges

 

For futures trading the daytrade and position margins do not require you to pay any interest on the remainder of the funds. The $500 posted for daytraders is a performance bond and traders do not pay interest on the remaining value of the ES futures contract. No special type of futures trading account is required to be able to take advantage of the daytrade margins.

 

Stock traders typically must apply for a special account in order to be able to daytrade and/or trade on margin and for those who can use the 50% margin, they need to pay interest on the other 50% they are borrowing. Forex has a cost of carry associated with its trading which means interest may be charged or paid on positions taken, but in the end this interest is seen as a revenue stream for Forex brokers and works to their advantage.

9. No Pattern Day Trader Rule

 

Futures daytrade accounts can be opened with as little as $4,000 and do not have any Pattern Daytrader Rules associated with them. Of course only risk capital should be used no matter what the amount is that you choose to start with.

 

The SEC describes a stock trader who executes 4 or more daytrades in 5 business days, provided the number of daytrades are more than six percent of the customer's total trading activity for that same five-day period, as a Pattern Daytrader. As a Pattern Daytrader you are required to have a minimum of $25,000 starting capital and cannot fall below this amount.

10. Liquidity

 

The Emini S&P futures trade about an average of 2 million times a day which allows for great price action, volatility and speedy execution. At a current approximate value of $50,000, that is over $100 billion changing hands every trading day.

 

Not all stocks and Forex markets are as liquid which means movements can be shaky and erratic, making daytrading more difficult. Forex firms like to make the claim that the over the counter foreign exchange market trades more than one trillion Dollars in volume per day, but most people don't realize is that in most cases you just traded against your broker's dealing desk rather than the true interbank market.

11. Tax Advantages

 

US Futures traders have favorable tax consequences for short term traders since futures profits are taxed 60/40, which means that 60% of the gain is taxed at the maximum rate of 15% (similar to long-term gains) and the other 40% is taxed at a maximum rate of 35% as ordinary income.

 

Securities positions held for less than 12 months are considered short term gains and taxed at 35%. Of course everyone’s tax situation is different and should consult a licensed accountant for their specific situation.

12. Diversification

 

When trading a stock index like the Emini S&P futures your "news risk" is spread out over the entire market. Should a report or rumor come out on an individual stock it should have very little impact on the whole index you are trading.

 

When you take a position in an individual stock you are susceptible to stock specific risk which can occur without warning and with violent consequences.

13. Safety of Funds

 

When you trade the ES you are trading with a Commodity Futures Trading Commission (CFTC) regulated and National Futures Association (NFA) member firm which is subject to the customer segregated funds rules laid out by the US government. In the over 100 years of futures trading the CME has only once had a loss of customer funds due to the failure of a clearing member because of these rules that are in place. While there are never any guarantees that you can't lose money, this track record is unprecedented.

 

Even with regulated US Forex firms, funds are not considered segregated, so if a regulated firm goes bankrupt clients funds are not offered the same protections as they are in the futures market.

14. Focus

 

Many ES futures traders only track the ES market and find it is the only chart they need to follow. There are always opportunities and great volume throughout the trading day. When large institutions or traders want to take a position in the market or hedge a portfolio they usually turn to the futures markets to get this done quickly and efficiently. Therefore, why not trade the market the "Big Boys" trade?

 

Most traders agree that individual stocks and therefore, the market as a whole follow the futures indices, and not the opposite. In fact, many stock traders will have an Emini futures chart up next to the stock they are following. As a stock or Forex trader you may need to scan dozens of stocks or currency pairs for opportunities. Many times specific stocks fall out of favor so volume and, therefore opportunities dry up and traders are forced to find a new stock to trade.

15. Go Short

 

There are no rules against going short the ES, traders simply sell short the ES contract in hopes of buying it back later at a lower price. There are no special requirements or privileges you need to ask your futures broker for.

 

Most stockbrokers require a special account with higher requirements for you to be able to go short. Some stocks are not shortable, or have limited shares that can be shorted. Also, up-tick rules could be re-enforced and in the past the government has put temporary bans on stocks that can be shorted.

16. Direct Correlation

 

On average the ES futures are directly correlated to the underlying S&P 500 index in the short and long term. If you pull up an Emini S&P 500 futures chart and compare it to the S&P 500 index chart they should almost look identical.

 

Double or triple weighted ETFs do not track the S&P accurately over longer periods, and some currency ETFs have credit risks associated with them which could hinder their ability to correlate.

17. Deep Market

 

The S&P 500 index is comprised of very actively traded stocks with some of the largest market capitalizations and with hundreds of billions of dollars invested in some fashion in them. With such large dollar values and high trading volume it would be very hard to manipulate its movements.

 

On the other hand sometimes it is easy to move or even manipulate a particular stock and even a foreign currency market. George Soros has been accused of intentional driving down the price of the British Pound and the currencies of Thailand and Malaysia and many stock "promoters," insiders and markets makers have been convicted of manipulating stocks.

18. Big Players

 

The old adages follow the "big boys" and "smart money" are usually true when it comes to trading, and large money managers, pension funds, institutional traders, etc. tend to be very active traders in the futures markets. The S&P 500 futures contract is generally recognized as the leading benchmark for the underlying stock market movements.

 

Most active equity traders admit they first look to the index futures for an indication of what the stock they are trading might be doing, so why not just trade the leader of the market, the Emini futures?

19. Volume Analysis

 

Volume can be one of the most useful indicators a trader can use, those little lines at the bottom of the chart are not just there to look pretty they should be used as another indication of the validity or lack thereof, of a particular move. In other words combined with other indicators and/or chart patterns volume can be used to confirm a move in the market. Most market technicians would agree that a move made on relatively light volume is not as significant as a move made on heavy volume and should be treated accordingly.

 

Since the Forex market is over the counter (OTC), there is no centralized exchange, no one place where trades take place therefore, there is no accurate record of volume and most, if not all, Forex charts will not show any indication of volume. So what might appear to be a significant move on a Forex chart, may just be a false move on low volume and could not be filtered out if you were looking at a Forex chart.

20. Clearing Reliability

 

During the May 6, 2010 "Flash Crash" the Emini S&P futures continued to trade within a reasonable price range reflecting what the cash S&P 500 index was indicating. No trades on the Emini S&P futures were cancelled and all trades cleared.

 

According to the joint study by the SEC and CFTC, ETFs made up 70% of the securities with trades that were later canceled. Furthermore, there were about 160 ETFs that temporarily lost almost all of their value and 27% of fund companies had securities with trades broken. Had you bought or sold during this event you may had been notified after the market closed that your trade was no longer good and left with potentially dangerous consequences.

 

As you probably already know trading is hard enough, so why choose a market where the odds are stacked more against you before you even place your first order. The above mentioned 20 points clearly make the E-Mini S&P 500 futures the best choice for daytraders and will give you the most bang for your buck. Before you trade futures, though, please make sure they are appropriate for you and that you only use risk capital.

[DbPhoenix 42]

Though I take exception to the singling out of the ES, this is good stuff. All beginners should be required to read it.

[Gekko78 10]

Though I take exception to the singling out of the ES, this is good stuff. All beginners should be required to read it.

 

Yes I agree about the ES ......I do not trade the ES at all but the information in the post hold true for most futures.

 

I trade mainly NQ,YM and CL

[kuokam 10]

Futures = Indices ?

How about gold , T bond , sugar, gas or corrency futures?

[Gekko78 10]

Futures = Indices ?

How about gold , T bond , sugar, gas or corrency futures?

 

Yes those are all futures as well . I think this article was just trying to make an example with the ES but it should relate to mostly all futures vs any other trade-able asset.

[rflowers22 10]

I agree but if the CFTC DOES NOT REGULATE THE PROGRAM TRADERS THE FUTURES WILL VANISH. THEY SEE THE STOPS AND RUN THEM AT WILL. THEY HAVE RUINED THE GRAINS AND NOW MEATS. WHAT NEXT?

[JMarsh 10]

This article should have been titled "Why Trading the E-Mini S&P is Better." It ignores all the reasons I gave up on stocks ages ago.

 

Futures are a great combination of fundamentals and technicals. There are markets I've made money with, year after year, due to certain expected cyclical fundamentals. I started with the grains and have never looked back! Weather markets and USDA reports can be like money in the bank. I will generally use fundamentals to figure out where to focus technical analysis---I call it my one-two punch.

 

For a few years I followed a website called GrainAnalyst.com but it changed hands in January. A trader who used to have a newsletter is supposed to be coming out with a new advisory service so I'm on the lookout for that.

 

And you're wrong that there are no market makers, locals, or floor traders in the indices! That's crazy talk!!! Who do you think all those guys in jackets and badges are in the courtyard next to the CBOT???

 

---JMarsh

[kuokam 10]

Please keep us informed on that news letter.

Do you use the Almanac?

 

This article should have been titled "Why Trading the E-Mini S&P is Better." It ignores all the reasons I gave up on stocks ages ago.

 

Futures are a great combination of fundamentals and technicals. There are markets I've made money with, year after year, due to certain expected cyclical fundamentals. I started with the grains and have never looked back! Weather markets and USDA reports can be like money in the bank. I will generally use fundamentals to figure out where to focus technical analysis---I call it my one-two punch.

 

For a few years I followed a website called GrainAnalyst.com but it changed hands in January. A trader who used to have a newsletter is supposed to be coming out with a new advisory service so I'm on the lookout for that.

 

And you're wrong that there are no market makers, locals, or floor traders in the indices! That's crazy talk!!! Who do you think all those guys in jackets and badges are in the courtyard next to the CBOT???

 

---JMarsh

[DbPhoenix 42]

And you're wrong that there are no market makers, locals, or floor traders in the indices! That's crazy talk!!! Who do you think all those guys in jackets and badges are in the courtyard next to the CBOT???

 

And all those people are trading index futures?

[Gekko78 10]

This article should have been titled "Why Trading the E-Mini S&P is Better." It ignores all the reasons I gave up on stocks ages ago.

 

Futures are a great combination of fundamentals and technicals. There are markets I've made money with, year after year, due to certain expected cyclical fundamentals. I started with the grains and have never looked back! Weather markets and USDA reports can be like money in the bank. I will generally use fundamentals to figure out where to focus technical analysis---I call it my one-two punch.

 

For a few years I followed a website called GrainAnalyst.com but it changed hands in January. A trader who used to have a newsletter is supposed to be coming out with a new advisory service so I'm on the lookout for that.

 

And you're wrong that there are no market makers, locals, or floor traders in the indices! That's crazy talk!!! Who do you think all those guys in jackets and badges are in the courtyard next to the CBOT???

 

---JMarsh

Ok so I did not write this article , as I stated in my post , so do not kill the messenger.

 

Yes the article is talking about the ES specifically but the information can be applied to many other futures not just the ES.

 

Also ....last time I checked the ES and certain other indicies DO NOT trade in the pits......that's what the E stands for in E mini .

 

What you trade like grains , are but not anything with E mini in front of it.

[JMarsh 10]

Please keep us informed on that news letter.

Do you use the Almanac?

 

Hi Kuokam---

 

I have indeed bought the Commodity Trader's Almanac (published by Wiley) each year for several years now! There are patterns and trends that come back year after year. I'm excited it's just about March because the BIGGEST trading day in grains is coming up! Planting Intentions on March 31!!! It usually locks up the futures for as much as a few days so it's a good idea to work it with options.

 

But sadly, I don't know what I will do this year! I started following a guy named Vic Lespinasse about six years ago. He was a traditionalist, on the trading floor at the CBOT for decades. He could quote you every recurring trading pattern in the grains that had ever been! He retired and his newsletter got picked up by a young hotshot named Matt Pierce. That guy was AMAZING!

 

The company that ran the newsletter website sold it to some desk jockey who's never worked the floor. I'm sure Matt Pierce is on the trading floor because he is a full-time trader but it appears he's not doing a newsletter or signal service anymore! So I have nobody to read their analysis of this year's Planting Intentions report from the USDA!

 

I might try to look on Agriculture.com to see if they are publishing the media/analyst consensus if it's going to be a bullish or bearish report. It's always an exciting day in the grains so be sure to watch the markets on March 31. Guaranteed fireworks every year!

[JMarsh 10]

And all those people are trading index futures?

 

The index futures are heavily traded by the locals and the many commercials and investment banks that have huge desks at the Board. If anything, they probably take MORE positions now that they're not using arb signals in pits! Don't you read the Commitment of Traders report?

 

Locals virtually always specialize and many of them trade one particular index. The S&P guys refer to it as the "spooz" which I always thought sounded nasty!

[JMarsh 10]

Ok so I did not write this article , as I stated in my post , so do not kill the messenger.

 

Yes the article is talking about the ES specifically but the information can be applied to many other futures not just the ES.

 

Also ....last time I checked the ES and certain other indicies DO NOT trade in the pits......that's what the E stands for in E mini .

 

What you trade like grains , are but not anything with E mini in front of it.

 

Yes, pit trading with hand signals has phased out but everybody's still there. It's just now they have trade screens strapped to their bodies. They're still standing up, they're still wearing headphones, they're still in jackets with all manner of garbage hanging out of their pockets. There are just as many people on the trading floors of the Board as ever. They're just not yelling anymore. The older guys still trade one to one. I used to trade with an ICE local who would still walk around and find out what everybody was doing in cocoa, coffee, and cotton.

 

And buddy, you don't have to tell me what electronic trading or mini contracts are, thanks.

[kuokam 10]

I think he's saying that e-mini is not traded in a pit like the main index. Could be that e stands for electronic. Just guessing

 

 

Yes, pit trading with hand signals has phased out but everybody's still there. It's just now they have trade screens strapped to their bodies. They're still standing up, they're still wearing headphones, they're still in jackets with all manner of garbage hanging out of their pockets. There are just as many people on the trading floors of the Board as ever. They're just not yelling anymore. The older guys still trade one to one. I used to trade with an ICE local who would still walk around and find out what everybody was doing in cocoa, coffee, and cotton.

 

And buddy, you don't have to tell me what electronic trading or mini contracts are, thanks.

[JMarsh 10]

I think he's saying that e-mini is not traded in a pit like the main index. Could be that e stands for electronic. Just guessing

 

No need to guess. YES the "e" stands for electronic. Some electronic markets have a Z in front of the symbol, still others use an I, depends on the sector. There are mini contracts that were pit traded way back but they're mostly all on the Globex now.

 

It really does not matter, you can choose a market by liquidity and margin amount. If you can't afford to trade the full-size contract, see if there's a mini and if it's got the volume. The CBOT introduced a micro gold contract last year but the volume and liquidity isn't there. It was kind of a passing fad when gold was going through the roof and people who had never traded before all wanted to get in on it.

 

The Globex minis in the energies see some pretty good action. The full-size crude margin is nearly $5K, so it's nice to have that alternative.

[Gekko78 10]

I think he's saying that e-mini is not traded in a pit like the main index. Could be that e stands for electronic. Just guessing

 

yes that is what I was saying.

[Gekko78 10]

Yes, pit trading with hand signals has phased out but everybody's still there. It's just now they have trade screens strapped to their bodies. They're still standing up, they're still wearing headphones, they're still in jackets with all manner of garbage hanging out of their pockets. There are just as many people on the trading floors of the Board as ever. They're just not yelling anymore. The older guys still trade one to one. I used to trade with an ICE local who would still walk around and find out what everybody was doing in cocoa, coffee, and cotton.

 

And buddy, you don't have to tell me what electronic trading or mini contracts are, thanks.

 

Glad to hear you know what E stands for.

 

But , I think you are missing the point if this article. It is just giving reasons why trading futures are better than other things...that's it. They just happen to talk specifically about the ES. Would you rather it list EVERY future and EVERY reason why trading it is better?

[kuokam 10]

Now, back to business

When trading an index, say the s&p, you can watch the dow as an indicator. same for the T note and Bond. What do you watch besides gold futures for clues?

[JMarsh 10]

Glad to hear you know what E stands for.

 

But , I think you are missing the point if this article. It is just giving reasons why trading futures are better than other things...that's it. They just happen to talk specifically about the ES. Would you rather it list EVERY future and EVERY reason why trading it is better?

 

And here I thought the article missed the point of its own headline. You don't have to list every market to generalize about how futures work and how they underpin the global economic infrastructure. The futures market is the reason any of us can afford to buy ANYTHING. The futures market sets the value of everything that has value. It's why any of us who invest in our future will have a future. Speculators are essential to maintain the liquidity and volume necessary for hedger participants to enter and exit as they need to manage their financial interests. Without an efficient futures market, the money in your pocket would have no value, you couldn't afford a home, and a trip to the grocery store would be a nightmare.

 

Obviously, I've brought too many out of town guests to the the building tour at the CBOT.

[JMarsh 10]

Now, back to business

When trading an index, say the s&p, you can watch the dow as an indicator. same for the T note and Bond. What do you watch besides gold futures for clues?

 

I wouldn't use gold "for clues" to the indices at all. I follow economic indicators like the consumer sentiment reports, the BLS's Employment Situation, and the PPI/CPI.

[Roger Felton 10]

Yes, pit trading with hand signals has phased out but everybody's still there. It's just now they have trade screens strapped to their bodies. They're still standing up, they're still wearing headphones, they're still in jackets with all manner of garbage hanging out of their pockets. There are just as many people on the trading floors of the Board as ever. They're just not yelling anymore. The older guys still trade one to one. I used to trade with an ICE local who would still walk around and find out what everybody was doing in cocoa, coffee, and cotton.

 

And buddy, you don't have to tell me what electronic trading or mini contracts are, thanks.

 

Everybody's still there? You're joking, right? I was visiting some of my floor trading friends at the NYMEX over 3 years ago and, at the peak trading time, it was a relative ghost town even back then. I've been to the CME numerous times and it's nothing like it was in the 90's and early turn of the century. Most former floor traders just never could make the transition to electronic trading...not at the CME, CBOT, NYMEX or anywhere else that I know of. The number of former open outcry traders who now walk around with a laptop looking like peanut vendors at a baseball game are relatively few compared to their hayday.

 

...and just so nobody gets mislead, the ES is a terrific market if you are an institution, big hedge fund, or high-roller slinging 100 contracts or more at a pop. It's one of the worst choices however if you are a small trader. The consistently lower range, slower movement and the quarter-point ticks are all big negatives for the little guy. It is infested with the HFT's making it much more difficult to trade. There are tons of much better futures choices available that offer more profit potential, less risk and all in a much shorter period of time on average.

[enochbenjamin 10]

This article sounds like a PR piece planted on behalf of the CME. While it may contain some good info - telling a trader which vehicle is best to trade is goofy. This article is geared towards novice traders. You yourself state that you went through a progression and settled upon the vehicle that best suited you. There are obviously people making money in stocks, forex, as well as Spooz. If memory serves me well Warren Buffet detests futures, but he seems to do ok with his stocks. I recently re-read Market Wizards and The New Market Wizards and it is clear that there are giants trading not only every feasible time frame but every vehicle known to man as well.

 

Trade what you feel comfortable with.

[ntrader 10]

Great article! I like futures trading too and one reason is that the commission charges for futures trading are relatively small as compared to other type of investments.

[binnie 10]

Everybody's still there? You're joking, right? I was visiting some of my floor trading friends at the NYMEX over 3 years ago and, at the peak trading time, it was a relative ghost town even back then. I've been to the CME numerous times and it's nothing like it was in the 90's and early turn of the century. Most former floor traders just never could make the transition to electronic trading...not at the CME, CBOT, NYMEX or anywhere else that I know of. The number of former open outcry traders who now walk around with a laptop looking like peanut vendors at a baseball game are relatively few compared to their hayday.

 

...and just so nobody gets mislead, the ES is a terrific market if you are an institution, big hedge fund, or high-roller slinging 100 contracts or more at a pop. It's one of the worst choices however if you are a small trader. The consistently lower range, slower movement and the quarter-point ticks are all big negatives for the little guy. It is infested with the HFT's making it much more difficult to trade. There are tons of much better futures choices available that offer more profit potential, less risk and all in a much shorter period of time on average.

 

Hi Roger, Cheers for the post . Wondering if you can elaborate a wee bit on your preferred futures markets . I started with Emini S&P then moved on to 6A / 6E etc currency futures. Not enough funds or experience to tackle Oil /Gold . Have lately been " following " FX pairs but not yet gone live. Any suggestions or comments you have will be much appreciated. Thanks;)

[Roger Felton 10]

I wouldn't use gold "for clues" to the indices at all. I follow economic indicators like the consumer sentiment reports, the BLS's Employment Situation, and the PPI/CPI.

 

Use what works for you. I formerly traded the Beige Book but stopped when it became the Rainbow Book. Now I just listen to Obama. When he says everything is peachy, I short everything. When Warren Buffet says he pays a lower tax rate than his secretary, I buy Puts in prisons. Elementary dear Watson...