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I'm not really a short term trader. It's just not something I have time for. I trade stocks and options mostly on a weekly/monthly basis. I've also started to use futures for index exposure and cash equitization because of the low capital requirements. For example, I buy 1 contract and hold for weeks/months (usually weeks). Rather than using SPY or similar funds, I like futures because I can get in/out easily and the cap gains is split 60/40 long/short. I'm wondering if anybody here uses futures in this way.
2019 I was holding NQ for months until covid hit and everything went to crap. I grew my account rather quickly with TD ameritrade/Thinkorswim. While I held NQ positions I used the gains to purchase call options at Robinhood and at TD ameritrade. I had just started out with the stock market, everything was new to me but was able to grown my account in 3 months from 30k to right around 200k. My goal was to pay off my house and almost did. Now I only do Intraday with Tradovate.
Humm... I can sa I also use ES in that same way
I like to hold for a week or so at a time.
Then, when I spot a worthy volatility for an intraday play, I do not hesitate to increase position intraday and drop it by end RTH (ie back to initial longer term size).
I've found that holding on weekly basis brings me a bit more positive return that holding on a monthly or quarterly basis.
For example, buying on Mondays after 30min into RTH, and selling on Fridays 30min before end of RTH in my records was a bit more lucratif than buying on first of the month, selling end of the month, (or quarter) with the same approach on the RTH.
Successful people will do what unsuccessful people won't or can't do!
I swing trade the ES a lot and the ZB just once or twice a year: The tax treatment and wash sales implication in the US, when short term trading SPY (and stocks) made me a fan of Futures.
I always feel more comfortable with less exposure, this is why I don't keep my trades open for a long time.
As soon as one becomes profitable with index investing when keeping short term position (less than a year for tax purpose), the next best move is to switch to futures.
The tax savings with Futures pay a few lunches
Best!
I’m also experimenting with MES strangles. I sold a 3600/4100 strangle Friday of last week. 1k margin requirement. We’ll see how it goes. I used to sell strangles on SPY but the margin is around 6k for about $400 in premium. The MES strangle was $210 for 1k. 21% ROC. Much better!
No point in closing position every Friday if one wishes to buy every consecutive monday :-) except perhaps to mitigate a bit the weekend risk - which at times can have a large impact.
Idea is to also sit on the side or even go short on some of the weeks to maximize overall return, depending on your read.
Successful people will do what unsuccessful people won't or can't do!
I'm going to see if I can come up with a really simple system that gives me buy signals and sell signals with a 30 day EMA. I need a confirmation though so maybe i'll add a MACD in there. I don't usually use indicators but maybe they would work a little better when applied to an index. I actually backtested this very idea and it worked pretty well for 2020 but in 2019 it was a losing strategy.
