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Stock trading seems to be more popular than the futures market. For a starting trader should one look to begin in the stock market? Why do most traders trade equities and not futures? If a trader can make 2-3 ES points a day consistently, all he needs to do is to increase size which will generate a decent income. With the leverage and liquidity offered in the index futures I would think this offers a better bang for the buck. Any thoughts on this? |
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Hi newtrader,
I'll throw in my opinion on on the subject. I trade Equities and Index Futures. First off what type of trading are you interested in? Intraday, swing, position? In my opinion Index futures are a bit harder to trade than stocks and day trading requires more skill and psychological framework than swing or position trading. Stocks certainly move slower in comparison to the emini's and they offer a new trader move room for mistakes. It is true that If a trader can make 2-3 ES points a day consistently, all he needs to do is to increase size which will generate a decent income. But the caveat is that you have to be on a level in which you take consistently 2-3 points away from from the markets:p Markets can look deceptively easy to trade in hindsight.
As far as profit and loss emini's do offer more bang for the buck, but also offer more bust for the buck as well. I would say that if you are gearing towards futures start out trading the NQ or YM. Those markets offer smoother action and aren't as erratic. It really all boils down to these few things:
A.) How much capital you have devoted to your trading business.
B.) Your Psychological and analytical(technical) skill levels.
C.) Your overall level of market experience.
If your levels are lower than higher on those three things, you could spend your time grinding your account to dust while you try and figure things out daytrading.
The key is desire, persistence and patience. Stick around here and you will find allot of people willing to help, that's for sure.
