Number of Markets to Trade

[ant]

I don't trade full-time right now, but my style of trading would average about 2-4 trades a day since my method tries to capture the major swings of the day. However, sometimes the market I trade, emini S&P, doesn't generate any trades, which brings me to my question. In order to trade for living, is it required to trade more than one market? For example, over the last week or so, volatility has really dried up in the ES and there have been few trade opportunities using my trading strategy. Specializing only in one market makes sense, but if you're trading for a living, you need to trade to generate income. Seems like this could be a real problem if the market one follows hits a dry spell for weeks, months, or longer. Thoughts?

[Soultrader]

Taking it into account that you are profitable trading the emini S&P, I do believe specializing can generate enough money to provide a living. However, no matter how good of a trader you are, trading small lots can become a problem. A trader trading 1 lots will have a hard time living off 2 points a day than someone trading a 100 lot.

The YM moves similary to the ES. On any given day the YM will have a 50 point minimum range. More common are ranges within 50-100 points. I do believe that one can trade for a living with index futures only. Of course there are days when the markets do absolutely nothing like on Sept. 6, 2006.

I do think it is a matter of a traders satisfaction. I have no problem trading the dow only while others may find the need to trade other markets.

As long as you are able to trade one market profitably, I do think one has the ability to trade any other market successfully. All that is required is observation of the underlying instrument to understand its personality.

I think the problem with alot of traders is that they jump around too much from one market to another without truly being an expertise in one market.

[chaostrader]

I am sure if you are good at one market, you can easily switch to a different market if it hits a dry spell. Money is made only where the action is. Gold was a very good market to be trading a few months back.

I don't think you will have trouble with a dry spell if your speciality is index futures.

[amz]

Should new traders start out by trading stocks, options, forex, or futures? Are the personality different for each market?

[Soultrader]

	Quote:	amz
	Should new traders start out by trading stocks, options, forex, or futures? Are the personality different for each market?

It doesnt matter which market you start out with initially. There is no single easy market. You may find stocks that are easier to trade than other stocks. Or you may find a futures contract that is better suited to you than other products.

Find a market that interests you and learn it thoroughly. I think all traders need to have at least one market that they can call it their bread and butter.

[scalper101]

It won't hurt to learn a couple though. Trying to trade 100 stocks on your radar screen is tough but I know some traders that do.

Just learn a handful of different markets. That way, you can always move towards where the action is.

[ant]

The markets I have started to follow, besides the emini S&P, are the 30 yr Bonds, Euro, Crude Oil, Natural Gas, and Gold. I also look at the emini Dow to identify divergences between the Dow and the S&P, but I've been trading the emini S&P only. I plan on trading only the electronic markets, not the pit-traded markets. Any thoughts on applying Market Profile principles to these markets? I wish there was another market, in a different area, with the volatility and volume of the S&P. Why do some traders prefer the emini Dow over the emini S&P (besides the tick value of $5 vs $12.50).

[Soultrader]

The dow mini or YM is very similar to the S&P 500. A couple of reasons why I prefer the dow:

The YM can be traded using a tighter stop than the S&P. My setups use a 10 points stop with the YM. When trading the ES, a 1pt stop is guaranteed to get stopped out.

The liquidity is thinner compared to the ES. This makes it alot easier to spot volume on the tape without risking any slippage.

There is also the psychological side when trading the YM. Greed plays a big factor in trading. Many new traders will refuse to take a 1-1.5 point profit in the ES just to see their stops get taken out. In the YM, a 15 point profit is alot easier to take than a 1.5pt profit in the ES.

When buying the test of the lows or shorting the test of the highs, the ES tends move 1+ point before reversing. This hurts alot of new traders using tight stops. In the YM, price will usually stay within 6-8 points.

Aggressive and experienced traders trade the S&P. For new traders, the YM is a good contract to begin with. Price does not move as rapid as the ES.

Market profile works really nice with the YM as well. This is probably the main reason why I trade it.

[chaostrader]

Market profile works with the 30yr bonds also.

I am not sure about the forex markets. This is because government policies affect the forex and price willl move because of fundamental reasons.

[carter]

You should learn a handful of markets. Trying to trade a market with no action is no a wise move. Stick with the hot sectors.