Great to meet up with so many of you at Solihull yesterday. In response to several requests for details re trading Futures:
I have account with GNI and trade Eurostoxx 50 in morning, Dow mini $5 in afternoon / evening.
Advantages
Access to futures order book 10 trades each side
Stops and limits can be set at any level to enter or exit
Trade at market, cost Euro/$ 6per side ie equivalent to a spread of 1.2.
In other words when scalping you make money on closing a position that has moved 2 points in your favour. Entry / exit using limit orders allows you to capure the spikes which of course are often much larger than 2 points on Dow!
These costs can be reduced further as vol picks up from >400 contracts /month
Also Spread bet the FTSE and Dow indicies as swing trades
Advantages
Profit tax free
Trading on credit ( apart from D4Free)
Can trade < 1 contract
Disadvantage
Impossible to set tight stops and limits
Spread at least 6 units vs 1.2 to enter /exit a future contract
Following the futures order book gives you a good handle on spreadbet quotes. On these indicies my experience is the spreadbetters quote direct from the price of last futures contract traded. This may at times be outside the current futures bid/offer - scope here for you to be ahead of game and work their quote in your favour
I use streaming data from www.ird.com and 2 indicators when trading Dow:
1) On 15 min chart 21 period RSI on close price - no smoothing
2) On 1 min chart a 3 period simple MA with 40% regression on the 6 period CCI close price. Chartman uses CCI in a different manner but the index was originally devised as signal to go long above +100 short below -100. It also work as a very responsive barometer when it changes direction within this band, eg short after 1 tick of an uptrend reversal. Commodity Channel Index is a complex indicator the best description I have found is on P116 of "The Encyclopdia of Technical Market Indicators" by RW Colby and TA Meyers.
Other tools to consider
3)On 1 min chart plot 8, 13 and 39 point exponential MA. These give market direction and support/resistance levels.
4)On 5 min chart look for support / resistance
5)Run market indicator table showing %age movement of Dow, NAS and S&P. NAS is more responsive than Dow. Quite often Dow indicates a certain direction and am about to trade but then NAS jumps in other direction and takes DOW with it within the next minute. Anomalous movements in %age performance can
also sometimes uncover opportunity to trade NAS or S&P. Also show FTSE and DAX here for reference
6)Run further market indicator table showing prices of the 30 individual DOW companies.
7) Graph cash vs futures price on 1 min. One often leads the other depending on what is happening re item 6)
8) Read Ed Downs signalwatch at start of trading day www.signalwatch.com
Similar techniques used for Eurostoxx but take DAX as barometer in morning and NAS in afternoon.
I have 9 monitors showing all this lot, and release the stress it generates by running / gym work / cycling. Started trading full time in Jan this year and have so far knocked 30min of last year's marathon times. Appreciate that that not everyone's cup of tea but I am thriving............
Suggest anyone interested in futures check out www.liffeinvestor.com and www.eurexchange.com web sites. they have loads of info and even a training mode which allows you to trade virtually but with real market price feed.
Mike
I have account with GNI and trade Eurostoxx 50 in morning, Dow mini $5 in afternoon / evening.
Advantages
Access to futures order book 10 trades each side
Stops and limits can be set at any level to enter or exit
Trade at market, cost Euro/$ 6per side ie equivalent to a spread of 1.2.
In other words when scalping you make money on closing a position that has moved 2 points in your favour. Entry / exit using limit orders allows you to capure the spikes which of course are often much larger than 2 points on Dow!
These costs can be reduced further as vol picks up from >400 contracts /month
Also Spread bet the FTSE and Dow indicies as swing trades
Advantages
Profit tax free
Trading on credit ( apart from D4Free)
Can trade < 1 contract
Disadvantage
Impossible to set tight stops and limits
Spread at least 6 units vs 1.2 to enter /exit a future contract
Following the futures order book gives you a good handle on spreadbet quotes. On these indicies my experience is the spreadbetters quote direct from the price of last futures contract traded. This may at times be outside the current futures bid/offer - scope here for you to be ahead of game and work their quote in your favour
I use streaming data from www.ird.com and 2 indicators when trading Dow:
1) On 15 min chart 21 period RSI on close price - no smoothing
2) On 1 min chart a 3 period simple MA with 40% regression on the 6 period CCI close price. Chartman uses CCI in a different manner but the index was originally devised as signal to go long above +100 short below -100. It also work as a very responsive barometer when it changes direction within this band, eg short after 1 tick of an uptrend reversal. Commodity Channel Index is a complex indicator the best description I have found is on P116 of "The Encyclopdia of Technical Market Indicators" by RW Colby and TA Meyers.
Other tools to consider
3)On 1 min chart plot 8, 13 and 39 point exponential MA. These give market direction and support/resistance levels.
4)On 5 min chart look for support / resistance
5)Run market indicator table showing %age movement of Dow, NAS and S&P. NAS is more responsive than Dow. Quite often Dow indicates a certain direction and am about to trade but then NAS jumps in other direction and takes DOW with it within the next minute. Anomalous movements in %age performance can
also sometimes uncover opportunity to trade NAS or S&P. Also show FTSE and DAX here for reference
6)Run further market indicator table showing prices of the 30 individual DOW companies.
7) Graph cash vs futures price on 1 min. One often leads the other depending on what is happening re item 6)
8) Read Ed Downs signalwatch at start of trading day www.signalwatch.com
Similar techniques used for Eurostoxx but take DAX as barometer in morning and NAS in afternoon.
I have 9 monitors showing all this lot, and release the stress it generates by running / gym work / cycling. Started trading full time in Jan this year and have so far knocked 30min of last year's marathon times. Appreciate that that not everyone's cup of tea but I am thriving............
Suggest anyone interested in futures check out www.liffeinvestor.com and www.eurexchange.com web sites. they have loads of info and even a training mode which allows you to trade virtually but with real market price feed.
Mike
