[Chippy]

Simple question. Why do people daytrade stocks? Why do people not daytrade in the futures market when you don't have to follow the $25,000 rule for daytrading and can make more money if you understand the risk part? Even 1 contract of the ES (S&P 500 mini) can make you more than a stock can and you don't need $25k in the account.

I am just looking for logical reasons since I did the switch myself about 4 years ago and haven't looked back. I can trade strictly technical analysis and have a market open 24 hours a day instead of only 8am to 5pm.

Comments would be appreciated as I am always interested

[MadMarketScientist]

Maybe people like to speculate on individual stocks vs. trading the entire S&P. And some think they've learnt to understand the behavior of a particular stock and its idiosyncrasies so they have an edge. This is debatable but I can see some truth to that. I used to be able to predict the cycles of O&G companies (but that was over the medium term) With that said, day trading is mostly technical so in theory you should be able to ignore the underlying asset and trade it just as a price chart. In that case you are 100% correct. I also think stocks are just easier to trade as its taught in school how to buy\sell stocks, etc. My grandma knows how to buy\sell stocks. Learning how to trade futures is much more time consuming ...

MMS

[Tams]

Originally Posted by Chippy »

Simple question. Why do people daytrade stocks? Why do people not daytrade in the futures market when you don't have to follow the $25,000 rule for daytrading and can make more money if you understand the risk part? Even 1 contract of the ES (S&P 500 mini) can make you more than a stock can and you don't need $25k in the account.

I am just looking for logical reasons since I did the switch myself about 4 years ago and haven't looked back. I can trade strictly technical analysis and have a market open 24 hours a day instead of only 8am to 5pm.

Comments would be appreciated as I am always interested

different people see different things in the market...

some can see signals in forex,
some can see signals in forex futures but not in forex cash.
some can see signals in options,
some can see signals in spreads,
some can see signals in YM but not ES,
some can see signals in agri
some can see signals in oil

some don't see anything no matter how you help them.

such is the wonderful life of the free market.

[SIUYA]

you can buy as little as 1 share in a stock as opposed to maybe a mini in futures
stocks are likely to have bigger % moves than an index
you can diversify
there are more stocks to look at - a larger universe


While many of these things dont necessarily apply to day trading.....I think one thing that futures offer - implied leverage is often misused by many - this is not often given in the stocks which saves moany people.
The greatest thing for me about futures and fx is the ability to short without the pain and admin involved when shorting stocks

[calsprdr]

Originally Posted by SIUYA »

there are more stocks to look at - a larger universe

The greatest thing for me about futures and fx is the ability to short without the pain and admin involved when shorting stocks

I day trade futures; but I also day trade stock options sometimes. Shorting shares can sometimes be impossible but you can always buy a put
Depending on the time of day, futures volumes might not offer you a decent trade.
I can then move over to equities for as SIUYA says, "a bigger universe".

[MadMarketScientist]

Originally Posted by calsprdr »

I day trade futures; but I also day trade stock options sometimes. Shorting shares can sometimes be impossible but you can always buy a put
Depending on the time of day, futures volumes might not offer you a decent trade.
I can then move over to equities for as SIUYA says, "a bigger universe".

I've been wanting to short CRM for sometime now and there is never any stock. The more we talk about this the more I am leaning towards giving up on stocks altogether ... but its just soo easy to press the Buy button!

MMS

[SIUYA]

stock shorting is a real pain, and its definitely a different set of skills required, but when mastered (and in the right market) can be very profitable, mainly as markets generally fall faster and harder than they rally.
Plus I guess there is the added bonus of a fall from $100 to $50 is a 50% fall while a rise from $50 to $100 is a 100% rise - which one becomes easier?
I have been in a few short squeezes before when stock gets recalled - never pretty as you just know you are f...d, its a matter of degree.

In the US there is definitely a lot more availability to short and it seems better facilities to do so, as you definitely need a good stock lender who has a good book for stock loans, otherwise if you are back of the que it can be terrible. I think Australia instigated some of the most draconian short selling prohibitions during the GFC and as always short sellers are demonised when markets go down.

I watch a small gold stock here everyday where there is $1000s of dollars of free money with company issued options being sold below parity - except you cant short this stock as there is no one to borrow it from....so you cant take advantage of it.....talk about frustrating

Plus in the US you do have more derivatives - and liquid derivative markets to be able to buy puts - this is often not available elsewhere...

[emazing]

I have to agree with Chippy, why Do People Day Trade Stocks????

I myself traded stocks for a long time, but when I found out the whole thing of futures, I switched overnight to commodities trading.

For all the ones who know nothing about futures and trade stocks only, here's a little info on the power or futures trading.

First of all, stocks are traded on a "per share" basis. Futures are traded on a "per contract' basis. In this example I will use the Euro FX, since this is what I use (please note, this is NOT forex, this is still futures).

Right now as I'm typing this, the Euro FX is trading at around 1.4495. Now, if I short at 1.4495 and cover at 1.4491, I just made 4 points. Doesn't sound much now, does it? Now check this out. Each point that I made, I get $12.50 (I know, still doesn't sound like much), so for 4 measly points, I just made an even $50. Now comes the best part. Depending on your account, some traders would trade 3 contracts, some 5 and some woulkd trade 10 or more. I personally trade 20 contracts per trade. Each Euro FX contract cost you $500, so if you traded what I trade, you would need to multiply 20 x $500 which equals to $10,000. Thinking about this very seriously now, $10k is not alot of money, and many many traders trade with much bigger accounts their "Stocks" account.

So let's do some more math here. 4 points I made x $12.50 = $50 x 20 contracts equals $1,000. How many opportunities do I have a day? I don't know! Reason being, I'm usually done at around noon or so. My average numbers of trades a day is anywhere between 4 and 6.

Trading futures really rockks for me. I personally will never go back to trading stocks, but for each his/her own. If stock trading works well for you, good stuff. But know this, the real big players are the futures traders!!!! There are individuald trading daily on gains of $20k ++++ You cannot make these types of gains trading stocks unless you trade a multi million dollar account, and how many do that?

Conclusion, futures are stocks on STEROIDS!!! So if you were not successfull trading stocks, you will lose your pants trading futures. It is truly more dangerous than stock trading.

Good luck to all:-D