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Avarice

What's "decent" Volume for a Futures Contract?

By Avarice, in Beginners Forum

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Avarice    10

Avarice
Posted

What do you guys find to be an adequate volume in a futures contract in order to consider it to be a viable trading vehicle (I use an EOD / swing trade strategy)? 500 traded contracts per day? 5,000? 50,000?

 

I've been looking at Germany's TecDAX future and I was shocked to see that it traded only some 400 contracts on Dec. 23rd... I'm afraid of slippage the size of the Bismark if my stop gets triggered in such a market?

 

What are your experiences / thoughts on this?

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TRADER1949    10

TRADER1949
Posted

Volume this time of year slows way down and a lot of traders set out the last half of December. What is the volume you should look for? Try looking at the average volume for a period of time historically and comparing it to current conditions, that should givve you a starting point.

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Logic    10

Logic
Posted
What do you guys find to be an adequate volume in a futures contract in order to consider it to be a viable trading vehicle (I use an EOD / swing trade strategy)? 500 traded contracts per day? 5,000? 50,000?

 

I've been looking at Germany's TecDAX future and I was shocked to see that it traded only some 400 contracts on Dec. 23rd... I'm afraid of slippage the size of the Bismark if my stop gets triggered in such a market?

 

What are your experiences / thoughts on this?

 

There are plenty of futures contracts that trade with enough volume to offer plenty of opportunities each day. Some of them are; Euro FX, Light Sweet Crude, eSoybeans, eWheat, eSoymeal, eSoyoil, eMini NASDAQ, Australian Dollar futures, Swiss Franc futures, Gold & Heating Oil. There is absolutely no reason what so ever to trade a thin market.

 

Think about going into a buffet and you are starving to death and there is only one bite of your favorite dish but lots of other things you like. But you lay on the floor and die because you are stubborn and only want to eat your favorite but it isn't enough to sustain you . . . that is not only silly but not bright.

 

You will find that 3000 to 5000 contracts will be the minimum you want to mess with for daily volume. I personally like volume bar charts as well but to each their own.

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Avarice    10

Avarice
Posted
Think about going into a buffet and you are starving to death and there is only one bite of your favorite dish but lots of other things you like. But you lay on the floor and die because you are stubborn and only want to eat your favorite but it isn't enough to sustain you . . . that is not only silly but not bright.

 

This is a very good allegory! You're right of course, thanks for the kick up the backside :)

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