My default instrument is 6E euro futures. But it can get choppy in the afternoon. I was thinking about switching to TF Russell futures after lunch hour, but have concerns about losing focus when trading 2 instruments in the same day. Iím curious how many instruments do members here trade. Any thoughts/experiences?
I trade a few at the same time (ES/EMD/YM/NQ), mostly because they are somewhat correlated and it fits my account and mental state; also because they dont move as fast as CL/6E/TF. In other words, if you have to trade more than one, dont pick the ones with the same personality that can drop 10 ticks in less than 5-10 seconds. IMO, 6E/CL/TF have all three the same personality.
I tried adding 6E to my list today and I was personally not able to keep track of the other 4 because of the amount of attention I had to give the 6E trades; so for me that does not work. I do find 6E to work fine with 6S in the early morning, like at around 5AM, and up to 7AM... after 9AM I just focus on the indexes.
Keep in mind the more instruments you trade at the same time, not just the more attention you need to allocate to each one; but also the stops/targets would be different and as such your account size should support it.
I follow the progression of the pit session opens on 6E(8:20ET), CL(9ET) and ZS(10:30ET) . If 6E is trading well I'll stick with it, if not I move to CL. If CL isn't doing anything I like I move to ZS. The time difference between the pit session opens gives me plenty of time to assess the opening range of each market and place trades accordingly. Sometimes, rarely actually, I'll trade the last hour of trading on TF, usually long since stocks don't go down, ever.
Why do you trade 4 correlated markets? They will typically all give you the same patterns at the same time. I trade 4 un-correlated markets, Gold, Oil, Euro, Mini Dow. Since they generally move totally separately, I can quadruple the amount of entries I get. That way, I look only for one type of high probability setup that may not happen often in any one market alone, but I can get 4 times the number of this setups on 4 un-correlated instruments. I might be long on one, and short on another other. That typically does not happen if trading correlated markets. Typically if a setup fails on one correlated market, it will probably fail on all of them. With unrelated markets you can trade very conservative signals, yet get a great number of trade opportunities.
mainly to build my skills trading multiple markets and develop concentratation as I manage 4 positions... my approach is, if one generates a long signal, I long all 4... and manage the positions... if short, the same.... btw, none will generate the same signal at the same exact time, similar patterns perhaps... but not at the same exact time.. and profit really comes down to managing the position...
eventually I would want to add inversely correlated instruments.. I just have not spent much time looking into those yet (but to me is no different than pairs or spreads trading).. but as I said; first, I need to spend a long time learning to manage 4 positions for which I have chosen slow moving instruments that fit my risk profile..
Are you a scalper or a trend rider? If you trade trends, then trading 2 correlated instrument, will most of the time be the same as doubling the size of you order on 1 instrument. If you are scalper, then the fact that the entry timing may be different on the 2 means that you may get a setup in one before the other triggers, and be out of the trade in the 1st before the 2nd triggers the same setup. But you will generally never see the TF trending up while the ES is trending down for example. I've never done pairs trading, and don't know what that involves, but I think there is more involved there then going long on one of the pairs and going short on the other.
Last edited by monpere; January 19th, 2011 at 10:53 AM.
I scalp for ticks.. and if I get some points out if it, then great... if YM triggers I enter at market and I get what I can from all of them... as an FYI, if I am scalping TF, I am not paying attention to anything else.. to me TF is just like 6E.. requires all the attention...
but to your point; I do agree about being similar, not the same, as doubling your trade size.. but as I said on prior post, what I care about is learning to manage multiple futures positions...
if I am trading size, scalping becomes difficult IMO depending on the market being traded, which leads to doing position trading.. but my issue with position trading becomes trade duration.. do I really want to be in a trade for 2-6 hours without protection? not really, and stops can be run over, so I dont always trust them..
IMO, if I was to have a $1MM account that allows me to trade a 100 line, do I want to go all in on a single market? what if it was a $2MM account? or $3MM? why not trade multiple markets and place 50-100 line on each instead of piling 500 on a single one?
that is just my thought process, not saying that is perfect and not like my account is anywhere near that; I am just looking into the future and thinking about what skills I need long term and I believe that managing multiple positions is one of those skills to be acquired .. at least for me..
btw, my "trend riding" which can be as long as a few hours to a few days.. is only done via options... I dont always have the time to watch the markets every minute and I rather control my risk without having to worry about stops.. if I loose some premium, is ok... losing it all, not so ok.. but it all comes down to how much I am risking and if I went in with the whole line for a given position or if I am scaling in because the trade is longer duration and I am confident for whatever reason that it will go higher or lower...depending on the bet..
anyhow, enough rambling.. time to hit the sack so I can trade the EU session...
In the morning I trade Oil, 9:00 AM open, then I watch the ES open, and at 10:30 I like to trade the grains ( wheat and corn) when they open up. Usually done around 12 and won't trade the afternoon ses, only the last 15 minutes of the grains.