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ES vs NQ/YM


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ES vs NQ/YM

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  #1 (permalink)
Howard Roark
Oslo Norway
 
 
Posts: 368 since Aug 2018
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Hi all,

My main instrument for a long time now have been the ES, but I often see people saying NQ/YM are much better trading vehicles. Common claims seems to be that NQ/YM offers more bang for the buck and that the price action is smoother or less noisy.

I have only taken cursory looks at the other index futures, but to me, the price action appears very similar on all three indices. That is, visually, it appears very similar and turning points typically happen at the same time. If anything, it seems to me as if NQ is just as whippy and retraces just as much as the ES?

It does however seem like if you compare the daily range and similar moves, the NQ does offer more $ per contract/per move. I plan on doing a study on this and will share my findings here.

Anyway, I'd be happy to have some input from someone with experience to share here.

I know this is a subject which have been discussed a bit in the past and it does seem to be a topic where people ain't quite in agreement. At least in terms of preferences and such.

Thanks in advance for your input on the subject.

Howard

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  #3 (permalink)
 bobwest 
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Western Florida
 
Experience: Advanced
Platform: Sierra Chart
Trading: ES, YM
 
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Howard Roark View Post
Hi all,

I know this is a subject which have been discussed a bit in the past and it does seem to be a topic where people ain't quite in agreement. At least in terms of preferences and such.

Thanks in advance for your input on the subject.

Howard

I recently switched to YM, and I like it mainly because of the smaller tick size: 10 ticks in YM = $50, vs. 4 ticks = $50 on ES. I think the granularity makes entries/exits a little better, and the bid/ask spread is smaller in dollar terms, so slippage is less.

I can't say yet if the price moves are that much different, but people do say that ES is more likely to be range-bound. I am not finding a huge difference as yet.

I did look at NQ, for the same reasons in terms of tick size, and my impression is that it makes very sudden and large moves that somewhat scared me. Again, this is just an impression, and I have not tried NQ at all.

So for now, all I can attest to is the smaller tick size in dollar terms, which may or may not make any difference, I would think mainly based on the size of the trades you are seeking. For larger moves, I believe it would become less a factor.

My two cents.

Bob.

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  #4 (permalink)
Howard Roark
Oslo Norway
 
 
Posts: 368 since Aug 2018
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bobwest View Post

My two cents.

Bob.

Your two cents are much appreciated, Bob. What you're saying is my impression also, but since I don't have in depth experience at this point, it's hard for me to have an opinion one way or the other.

So far today, NQ's daily range have offered nearly twice as much per contract in dollars:

NQ 59,25 x 20 = 1185 USD

ES 10,75 * 50 = 537,50 USD

On Friday the difference was less:

15,50 * 50 = 775 USD

49 * 20 = 980 USD

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  #5 (permalink)
 AlexSobol 
Sumy, Ukraine
 
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Howard Roark View Post
Your two cents are much appreciated, Bob. What you're saying is my impression also, but since I don't have in depth experience at this point, it's hard for me to have an opinion one way or the other.

So far today, NQ's daily range have offered nearly twice as much per contract in dollars:

NQ 59,25 x 20 = 1185 USD

ES 10,75 * 50 = 537,50 USD

On Friday the difference was less:

15,50 * 50 = 775 USD

49 * 20 = 980 USD

Don't look at range too much. You always can take bigger position. It all about an instrument that you understand or not.

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  #6 (permalink)
 Botts 
Penetanguishene, Ontario, Canada
 
Experience: None
Platform: NinjaTrader-8
Broker: NinjaTrader Brokerage, Continuum
Trading: ZB, MES, NQ, YM
 
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Howard Roark View Post
Hi all,

My main instrument for a long time now have been the ES, but I often see people saying NQ/YM are much better trading vehicles. Common claims seems to be that NQ/YM offers more bang for the buck and that the price action is smoother or less noisy.

I have only taken cursory looks at the other index futures, but to me, the price action appears very similar on all three indices. That is, visually, it appears very similar and turning points typically happen at the same time. If anything, it seems to me as if NQ is just as whippy and retraces just as much as the ES?

It does however seem like if you compare the daily range and similar moves, the NQ does offer more $ per contract/per move. I plan on doing a study on this and will share my findings here.

Anyway, I'd be happy to have some input from someone with experience to share here.

I know this is a subject which have been discussed a bit in the past and it does seem to be a topic where people ain't quite in agreement. At least in terms of preferences and such.

Thanks in advance for your input on the subject.

Howard

I'm not trying to regurgitate what @bobwest already observed, but I too recently started trading a different contract.

My preference has always been to trade the 30 Year Bond (ZB) but the average daily range and volume had contracted significantly from the "hay days" of QE 1, 2, 3 etc...

I know there are a lot of people that swear by trading the ES (the daily volume traded proves that.)

However I tried to learn how to trade the ES during my first year as a Futures trader (2009) with horrible results.
(I blew up two $10k accounts before I started trading the ZB (in 2010) and I was happy with the ZB until Powell took over from Yellen.

So I started looking for a different market to trade (in addition to the ZB).

Given my experience with the ES I could not bring myself to go there again. I watch it, I look at it, but I won't trade it.

I was looking for something that would suit my trading style, something that could move decisively, (like the ZB)
and something that would give me a high probability of a $125 - $250 move (also like the ZB) based on a 1 lot.

Given the ZB can cover that ground with a 4 to an 8 tick move it took some getting used to on my part watching the NQ or the YM go through their daily gyrations,
off of the Open, or News or Fundamental changes (such as Interest Rate policy statements, Earnings, Tariffs, or Oil tankers being torpedoed).

I spent about a month studying the YM, the NQ and (I admit it) the ES,

In the end I settled on the NQ, for a number of reasons similar to what bobwest already mentioned, but mostly due to the Average Daily Range.

As you can see on the attached Daily Charts for the 2nd Quarter of 2019 the 10 Day Average Daily Range of the "Three Sisters" tells a story on its own.

NQ = 131.55 x $20 = $2,631.00
ES = 33.5 Points x $50 = $1,675.00
YM = 293.1 x $5 = $1,465.50

I realize the Average Daily Range does not in and of itself portend a winning strategy, but it does (in my opinion) suggest there might be more opportunities for me to "go to the well" and find those $125 - $250 trades.

Good luck with your journey,
Trade well.

R.I.P. John Bottomley (Botts), 1956-2022.
Please visit this thread for more information.
Attached Thumbnails
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Name:	ES 10 Day Average Daily Volume & Range 2019-06-17_13-23-40.png
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Name:	YM 10 Day Average Daily Volume & Range 2019-06-17_13-23-23.png
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  #7 (permalink)
Howard Roark
Oslo Norway
 
 
Posts: 368 since Aug 2018
Thanks: 331 given, 421 received

Hi, TopGunNote,

Thank you for your in depth reply and comparison of the three e-minis. Also interesting to hear about your experience with ZB.


TopGunNote View Post
In the end I settled on the NQ, for a number of reasons similar to what bobwest already mentioned, but mostly due to the Average Daily Range.

As you can see on the attached Daily Charts for the 2nd Quarter of 2019 the 10 Day Average Daily Range of the "Three Sisters" tells a story on its own.

NQ = 131.55 x $20 = $2,631.00
ES = 33.5 Points x $50 = $1,675.00
YM = 293.1 x $5 = $1,465.50

I realize the Average Daily Range does not in and of itself portend a winning strategy, but it does (in my opinion) suggest there might be more opportunities for me to "go to the well" and find those $125 - $250 trades.

Good luck with your journey,
Trade well.

Yes. There does not seem to be any doubt that the NQ offers more most of the time (or even all the time). For me, that's not the only criteria though. I'd also need to be able to capture those moves. It's my initial impression only, but to me, it seems like NQ retraces quite a bit and even just as much as ES.

Mind me asking if you're trading NQ live now and if things are going well? It does strike me as a fairly different animal compared to ZB.

I feel ES have been really nice so far this year, but it's been a bit slower lately. Should we get back to 10,0 point ranges and the feeling of watching paint dry, it will get tough to trade I imagine. It simply does not offer that many opporunities during a day.

Good luck on your journey as well.

Regards.

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  #8 (permalink)
 Botts 
Penetanguishene, Ontario, Canada
 
Experience: None
Platform: NinjaTrader-8
Broker: NinjaTrader Brokerage, Continuum
Trading: ZB, MES, NQ, YM
 
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Howard Roark View Post
Hi, TopGunNote,

Thank you for your in depth reply and comparison of the three e-minis. Also interesting to hear about your experience with ZB.



Yes. There does not seem to be any doubt that the NQ offers more most of the time (or even all the time). For me, that's not the only criteria though. I'd also need to be able to capture those moves. It's my initial impression only, but to me, it seems like NQ retraces quite a bit and even just as much as ES.

Mind me asking if you're trading NQ live now and if things are going well? It does strike me as a fairly different animal compared to ZB.

I feel ES have been really nice so far this year, but it's been a bit slower lately. Should we get back to 10,0 point ranges and the feeling of watching paint dry, it will get tough to trade I imagine. It simply does not offer that many opporunities during a day.

Good luck on your journey as well.

Regards.

Yes the NQ definitely retraces quite a bit, and while I can't explain it, it just seems to make more sense to me than the ES in the way it moves.

I'm certain a psychologist could tell me why I am unable to see the opportunity in the ES and yet somewhat comfortable with the NQ.

I've been trading it live for about 6 months now with no regrets.

To your point about the retracements, somewhere along the line I heard someone say "There's always a retracement."

I have always tried to keep that in mind before "jumping in" on a new move.

R.I.P. John Bottomley (Botts), 1956-2022.
Please visit this thread for more information.
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  #9 (permalink)
 xevanchan 
New York City, NY
 
Experience: Intermediate
Platform: Ninjatrader 8
Broker: Dorman Trading
Trading: emini ES/NQ
 
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Howard Roark View Post
Hi all,

My main instrument for a long time now have been the ES, but I often see people saying NQ/YM are much better trading vehicles. Common claims seems to be that NQ/YM offers more bang for the buck and that the price action is smoother or less noisy.

I have only taken cursory looks at the other index futures, but to me, the price action appears very similar on all three indices. That is, visually, it appears very similar and turning points typically happen at the same time. If anything, it seems to me as if NQ is just as whippy and retraces just as much as the ES?

It does however seem like if you compare the daily range and similar moves, the NQ does offer more $ per contract/per move. I plan on doing a study on this and will share my findings here.

Anyway, I'd be happy to have some input from someone with experience to share here.

I know this is a subject which have been discussed a bit in the past and it does seem to be a topic where people ain't quite in agreement. At least in terms of preferences and such.

Thanks in advance for your input on the subject.

Howard

I transitioned from /ES to /NQ, and haven't really gone back. I will say, some days the price action on /ES is much cleaner, and on some days it's much clearer on /NQ. I donít think one has signifcantly and consistently better price action, but /NQ has a larger ADR, so that's what I trade. I have also heard good things about YM, and am currently still looking into it.

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  #10 (permalink)
Howard Roark
Oslo Norway
 
 
Posts: 368 since Aug 2018
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TopGunNote View Post
Yes the NQ definitely retraces quite a bit, and while I can't explain it, it just seems to make more sense to me than the ES in the way it moves.

I'm certain a psychologist could tell me why I am unable to see the opportunity in the ES and yet somewhat comfortable with the NQ.

I've been trading it live for about 6 months now with no regrets.

To your point about the retracements, somewhere along the line I heard someone say "There's always a retracement."

I have always tried to keep that in mind before "jumping in" on a new move.

Thanks for your comment and also your reminder on retracements. It’s true. Certainly for ES and it seems NQ/YM also? It can happen that momentum picks up, but I bet a huge majority of moves and set-ups offer a retracement for entering.

I’m inspired to do some more study on the NQ now.

By the way – do you typically scalp for smaller targets or do you trade larger swings also…?

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