Trading the Dow Jones (DJIA / YM) vs. S&P500 (ES)

ww3361

Junior member
12 0
I've been backtesting on the DOW (YM) for the last year now and am pretty much ready to start trading. I thought this thread might be useful for starting a debate on which indice is more suitable for day trading: The DOW or the S&P500?

The reason for this question is that they are virtually identical in terms of intraday price action. The main differences I've noticed so far is that the S&P500 has been around longer (the ES contract) and provides superior volume and liquidity. However, I find that the DOW (YM contract) has the advantage of a 1 point minimum tick vs. the 2.5 (0.25 of a point) minimum move on the ES.

Basically, if any of you more experienced traders out there could give your opinions and experiences of trading the two indices, it would be much appreciated.
 

Pat494

Legendary member
13,843 1,399
I think the Dow is quicker to respond but I trade the S&P. Less likely to spike and trigger stops
 

Mr.J-Arthur

Well-known member
455 15
The Dow is very fast and violent. Lots of noise because of the beginner traders! Want easy pickens? Trade the YM, you're bound to have an edge over some of the other traders.

ES is more leverage, but it doesn't have as much noise, and the traders usually know what they're doing. It's not as fast and violent action, but things still move PRETTY fast.

Both are fine for short term trading. If you have the capitol, trade the ES. My broker has crappy margins and required more capitol to trade the ES.

Trading the ES will save you time and money, by not getting stopped out on the noise. I think there is a decent amount of stop hunting on YM, because the traders are usually easy game (not always!).
 

Phil Mibbutz

Experienced member
1,860 58
The Dow/YM wins on spread, especially if you're SB-ing, but it does tend to get a tad spiky at times. I seem to remember there was an article on the old version of the CBOT site that proved (or tried to) that the Mini Dow was the thing to trade.
 

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