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Private Banker and I have compared profiles. His tick data is more accurate than my ToS minute data.
It's not a huge difference but there is a difference. I think there are more important factors when it
comes to making consistent gains in the market. I've put this in as a request with ToS and they said they are working on it. When? Who knows :/
Can you help answer these questions from other members on NexusFi?
Apologies for reviving such an old thread but I have been wondering the same myself for quite some time.
Though my take seems to be opposite to Mike's.
I started trading some sector ETFs and index ETFs like QQQ for over a year.
Now I am moving into future as I can get the same result with much less capital tied up due to leverage.
Mike's argument seems to center around the issue/risk due to leverage. I agree with it to a point.
I used to have 1M to 2M invested in ETFs, now I can achieve the same returns simply by trading a few future contracts with only roughly 10% of capital invested compared to my investment in ETFs.
For instance I can buy 10 ES contract and achieve similar results as with a $2M invested in an ETF.
So yes the futures are more risky due to leverage but no-one forces me to invest the same capital amount. At only 10% I incur the same amount of risk.
Maybe I am missing something here - so lets be specific to explain my thinking precisely:
Lets say S&P moves up 1%
$2M in S&P ETF => $20k profit
9 ES contracts is 9*(4500/100)*50 = $20,250 profit (I take 9 contracts to have a similar notional value)
The CME ES margin is $11,500 => so with 100k (and no drawdown) you can achieve the same result - double that at least to be on safe side.
I am not even talking about intraday margin as these are ridiculous.
The point is simply that you can limit yourself to a few contracts and not buy as many as your account allows. For the same notional value the risk are the same.
Am I missing something with regard to risk? I must be missing something because to me this seems like a no brainer. Can someone explain to me why I would be better of going back to investing in some index ETFs?
FB
PS: I also like the fact that futures like ES are much better regulated and avoid a lot of the crap usually taking places with most brokers and market makers (order flow, fronting orders, etc...)
You may have noticed that the name of this forum is "futures.io," so probably you won't get a lot of argument.
@Anagami's would be the best response, I think, that you are likely to get:
In other words, trade what you like and what works for you.
I did look back in the old posts in this thread to find out what "Mike's argument" was, and it was about what I expected, having known him for some years now. His concern was toward new traders, just learning how to trade. And the major concern is now and was then that new traders will very easily lose their shirts in a hurry from day trading futures, and in fact this seems to be the case, given the long-term experience on this forum.
Non-new traders can too, by the way. It is hard but not impossible to lose 100% of your position in unleveraged stock swing trading (although it certainly has been done.) It is also hard in an ETF. It is amazingly easy in futures. I came to futures from stock and options trading, and futures immediately took my head off. (I am still here, however, and head is back on.)
Since there are now micro futures contracts such as MES, it is possible for newer traders to trade futures while keeping their dollar risk low, and this may be a viable option for many to learn without drowning.
My point is not anything about what "everyone" should do, or about the "best" thing to do. It's about doing what you want to do, and what you can make work for you, that's all. This will depend on you. If it's futures for you, then do it. It can be a challenge, though. Everyone will find out soon enough if it's right for them.
And, glad to see you posting. Welcome to the forum.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
