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Trading the new CME E-Micro's (E micro) MES, MNQ, MYM, M2K and other micros
No question the micros are more expensive to trade, relatively speaking... but yeah, if you're paying more than $1.00 RT, you're getting hosed. Look around, there are more than a few high quality brokers deserving of your business.
Regarding trading micros, it is a lot safer if you get it wrong you wont blow up your account , but i have heard that trading the E mini requires a substantial amount of money in your account to make the numbers add up.
Hi,
I am trading both micros and minis in different accounts. I am trading micros in my own accont and minis for TST.
I think trading micros is a lot more difficult that trading minis, however trading micros is really a great learning experience.
The problem that I have when trading micros is this: imagine that I have a position with 2 contracts and I am up 100 USD.
This means that any contract gave me on average 5 points, which for me it would be ok as a first target, so I should at least scale out and take 50 USD.
However I look at it and I think that market might go further and give me another 300 USD, so I keep the position open. Basically 50 USD mean nothing to me, and I don't care (which is not a good mindset because my account is around 3000 USD so 50 USD actually mean alsmost 2%). When I ask 300 USD I am already set for failure because I am asking the market to give me 30 points per contract which is a lot. Basically I have a target beyond sigma (read further)!!!
This problem makes it clear that there is a psychological trap. With ES-mini the 100$ would be 1000$ and I would have a good incentive to cash in. This is also why with ES mini once you start to increase size you start to lose money, because the incentive becomes bigger and bigger and it's more and more difficult to let a runner run and thus you screw up the risk-reward.
With micros you have the tendency to ask too much to markets, I have done some simulations on matlab and the problem is quite evident. If you build a model in which price increments are distributed according to normal distribution with a standard deviation "sigma" then your stop loss and targets must be within sigma. If your target is beyond sigma the system simply does now work.
Doesn't sound like that much but add it all up and the total cost for trading a Micro means that it not cost effective when using most scalp strategies.
I was amazed to see that I got no hits when searching for "diversification e-micro".
Despite the higher commish and fees, I would think the huge advantage of the E-Micros is the ability to trade multiple symbols at one time.
Does no one here believe in diversification to reduce risk when trading futures ?
Dear Community,
as a newbie I am trying to understand the relation of mini and micro futures to each other: Does it make sense to plan your trades in ES but execute them in MES (assuming you actually want to trade MES)? My reasoning would be that more volume and overall the larger amount of money is transacted in the ES and the MES correlates almost to the tick with it. My fear is that the levels I identify in the MES may be less significant than those of the "big brother". Or is my understanding completely off?
Many thanks in advance.
