Which contract should a beginner trade?

[wsam29]

Start with a market that suits YOUR personality.

They all act differently.

Sit, watch and feel how each market moves. They are like women, no one are the same. Learn their behaviors and slowly trade 1 or 2 lots at a time. The tick value should be irrelevant because once you start adding contracts, they start to go up.

This is part of the learning curve.

[wsam29]

	Quote:	wsam29
	Start with a market that suits YOUR personality. They all act differently. Sit, watch and feel how each market moves. They are like women, no one are the same. Learn their behaviors and slowly trade 1 or 2 lots at a time. The tick value should be irrelevant because once you start adding contracts, they start to go up. This is part of the learning curve.

Forgot to mention, don't just limit yourself to the stock index futures.

There are plenty of electronic markets now, not like when I first started. September 1998.

The electronic meats has fairly low volume, but you can use the pit data and enter limit orders on the electronic side and hope to get filled. From what I understand the NYBOT products now are also electronic as well.

Coffee and cocoa, they spike and jump and come crashing down, really crazy market, technicals don't really work in that market. I've only traded cocoa a fee times.

OJ, sugar, they are slow, not really day trading products, but once they move, they can trend for a long time. I still remember buying 5 OJ contracts around 65.00 right before the hurricane. Well lets just say, OJ at the time was near or at its lifetime low, all one had to do was hold it and let the market do the work. *sigh* Those are once in a lifetime type trades that make trader's famous if they make a killing.

Sugar at one time was around 3 cents a pound.

Just don't limit yourself to the popular products.

Just remember, you're also trading against other people and well, lets just say, the moment you enter the trading arena, you are trading against seasoned veterans right off the bat and they will not feel bad about taking your money. Heck I've put a few of their kids through school for sure.

[brownsfan019]

winfred gives some additional options; however, I would suggest any new trader stick to the ES, YM, NQ or ER2. The reasons are for what Winfred quoted - other markets have much lower volume, which can lead to wild spikes, lock downs, etc. You are not going to see lock downs in the main US equity index products. The last thing a new trader's account can withstand is a huge loss in a low volume product.

Don't make the mistake of thinking that just b/c it's electronic, all things are equal. There's a reason why the US indexes are some of the most heavily traded futures contracts daily.

[rock]

YM
reasons already stated by posters

[The Bear]

	Quote:	rock
	YM reasons already stated by posters

I say you start with YM - one of the other benefits is the data feed is still free. If you start paying data fees, that's just more money you are going to have to make just to break even.

[brownsfan019]

	Quote:	The Bear
	I say you start with YM - one of the other benefits is the data feed is still free. If you start paying data fees, that's just more money you are going to have to make just to break even.

I don't think data feeds are that expensive...

In other words, I would not trade a contract purely based on saving 100 bucks a month (emini package thru DTN).

[cooter]

	Quote:	brownsfan019
	I don't think data feeds are that expensive... In other words, I would not trade a contract purely based on saving 100 bucks a month (emini package thru DTN).

I agree.

If the cost of data and charting is a make it or break it proposition for you, then perhaps you shouldn't be trading futures to begin with.

Just my two ticks' worth....

[tim4]

	Quote:	TinGull
	Soul...this is the one time I've got to disagree with ya. I've been trading NQ the past few days now and I wish I started out on this one. It's a great contract for beginners because the tick value is the same as YM but the range is less, so the risk ends up being less. You can find great setups that could use a 2 point stop on the NQ based on what the market tells you, and that equates to 8 YM points. Is the reward going to be smaller? Absolutely! BUT it gets your feet wet with real money without having to risk AS much. This is a contract I've been testing a new strategy on and instead of risking play money and not getting that emotional thing that we all love...I'm risking real capital and seeing how my emotions play into the strategy. So far, so great I vote for NQ or YM, with preference to NQ.

I'm brand new here, but have a question on using YM v. NQ. It would appear that a particular move on YM is maybe double the number of ticks as the same move in NQ. Since you pay 1 tick to get in and 1 to exit, that cuts the profit disproportionately in the NQ, right? Example: a 20-tick scalp on YM may yield a net of 18 ticks, whereas the same corresponding move in NQ would net only 8. So instead of being half the profit, it's actually 44%

In addition, the commission of, say 4.60 RT is actually halved on the YM trade, since the profit is only half of the NQ trade.

Does this make sense? Or are there are other factors I'm not aware of, like better fills on NQ? Seems like there's more volume on YM, though.

I plan to do a lot of this trading, scalping for 5-20 ticks, so I'd appreciate any thougts. Many TX.

[cooter]

	Quote:	tim4
	I'm brand new here, but have a question on using YM v. NQ. It would appear that a particular move on YM is maybe double the number of ticks as the same move in NQ. Since you pay 1 tick to get in and 1 to exit, that cuts the profit disproportionately in the NQ, right? Example: a 20-tick scalp on YM may yield a net of 18 ticks, whereas the same corresponding move in NQ would net only 8. So instead of being half the profit, it's actually 44% In addition, the commission of, say 4.60 RT is actually halved on the YM trade, since the profit is only half of the NQ trade. Does this make sense? Or are there are other factors I'm not aware of, like better fills on NQ? Seems like there's more volume on YM, though. I plan to do a lot of this trading, scalping for 5-20 ticks, so I'd appreciate any thougts. Many TX.

You need empirical data to support your assertions, IMHO.

The daily volume on NQ is far greater than YM - and that's a fact, supported by the data.

As for the range on the NQ vs the YM, if you are trading size, you'd probably want to use the NQ, due to the risk of slippage on YM.

[darthtrader]

tim, I think if you just look at the reasons you posted upside down it will make more sense from a beginner stand point. I believe what you posted is true as a rule of thumb but you would also lose less when your wrong. NQ you can have a tighter stop if your wrong dollar wise.
They are close enough though starting out that its not going to make or break you, your strategy will do that. If your totally wrong with your strategy overall NQ though should be able to give you some extra trades on your roll.