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Beginner Question - Futures Level 2


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Beginner Question - Futures Level 2

  #1 (permalink)
frank25
New york
 
Posts: 16 since Apr 2020
Thanks Given: 12
Thanks Received: 4

Hello all,

Lately i have decided that i want to slowly transition from day trading stocks to E-mini futures. Now i am trying to find as much as i can online around futures but there is one thing that i am still uncertain about. Is level 2 important in day trading futures as it is important in day trading stocks, especially scalping. How about volume? Volume seems to be a a bit different here compared to stocks. Can i just use pure price action trading here? do i need to bundle this together with volume and level 2 or are these two as not important in day trading futures as they are important in day trading stocks. Thanks in advance for any help that you can provide.

Best,
Frank

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  #2 (permalink)
MichaelFlowTrader
Atlanta
 
Posts: 152 since Jan 2017
Thanks Given: 43
Thanks Received: 120


frank25 View Post
Hello all,

Lately i have decided that i want to slowly transition from day trading stocks to E-mini futures. Now i am trying to find as much as i can online around futures but there is one thing that i am still uncertain about. Is level 2 important in day trading futures as it is important in day trading stocks, especially scalping. How about volume? Volume seems to be a a bit different here compared to stocks. Can i just use pure price action trading here? do i need to bundle this together with volume and level 2 or are these two as not important in day trading futures as they are important in day trading stocks. Thanks in advance for any help that you can provide.

Best,
Frank

We use the price ladder also known as the DOM, it is much better than level 2 stock data, easier to trade, more transparent, but it takes a skill all its own to trade. Watch the videos from Peter Davies of Jigsaw, Axia Futures and Gary Norden on youtube to give you and idea. Youtube Futures Price Ladder Trading, Market Making Scalping, DOM scalping in youtube and you will find a ton of ideas that will get you started. You will find that Futures is the best market for pure scalping...

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The following 3 users say Thank You to MichaelFlowTrader for this post:
  #3 (permalink)
frank25
New york
 
Posts: 16 since Apr 2020
Thanks Given: 12
Thanks Received: 4


Thank you for the shared information!

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  #4 (permalink)
Mozart2112
Minoqua Wi USA
 
Posts: 119 since Sep 2019
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MichaelFlowTrader View Post
We use the price ladder also known as the DOM, it is much better than level 2 stock data, easier to trade, more transparent, but it takes a skill all its own to trade. Watch the videos from Peter Davies of Jigsaw, Axia Futures and Gary Norden on youtube to give you and idea. Youtube Futures Price Ladder Trading, Market Making Scalping, DOM scalping in youtube and you will find a ton of ideas that will get you started. You will find that Futures is the best market for pure scalping...

agreed, futures is the best market for pure scalping... and definitely pay attention to price action.

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  #5 (permalink)
Noobtrader123
Houston, Texas
 
Posts: 13 since May 2020
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frank25 View Post
Hello all,

Lately i have decided that i want to slowly transition from day trading stocks to E-mini futures. Now i am trying to find as much as i can online around futures but there is one thing that i am still uncertain about. Is level 2 important in day trading futures as it is important in day trading stocks, especially scalping. How about volume? Volume seems to be a a bit different here compared to stocks. Can i just use pure price action trading here? do i need to bundle this together with volume and level 2 or are these two as not important in day trading futures as they are important in day trading stocks. Thanks in advance for any help that you can provide.

Best,
Frank

Admittedly I have little experience using level 2 or DOM for futures but have used them for stocks. I do use price action along with momentum and have found for scalping and swing trades to be quite sufficient.

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  #6 (permalink)
 Rainmakersg 
Singapore Singapore
 
Experience: Intermediate
Platform: NinjaTrader
Trading: ES
Posts: 31 since May 2020
Thanks Given: 62
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MichaelFlowTrader View Post
We use the price ladder also known as the DOM, it is much better than level 2 stock data, easier to trade, more transparent, but it takes a skill all its own to trade. Watch the videos from Peter Davies of Jigsaw, Axia Futures and Gary Norden on youtube to give you and idea. Youtube Futures Price Ladder Trading, Market Making Scalping, DOM scalping in youtube and you will find a ton of ideas that will get you started. You will find that Futures is the best market for pure scalping...

Thanks for sharing

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The following user says Thank You to Rainmakersg for this post:
  #7 (permalink)
frank25
New york
 
Posts: 16 since Apr 2020
Thanks Given: 12
Thanks Received: 4

Thanks for your input. Very much appreciated!

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  #8 (permalink)
 
Sandpaddict's Avatar
 Sandpaddict 
Vancouver, Canada
 
Experience: Advanced
Platform: Ninjatrader, MT4
Broker: IB, Global Prime
Trading: Futures CFDs
Posts: 684 since Mar 2020
Thanks Given: 975
Thanks Received: 637


Mozart2112 View Post
agreed, futures is the best market for pure scalping... and definitely pay attention to price action.

I was going to say this as well. But hey, the more I trade the less I use to trade with.

I just got rid of my ATR indicator at the bottom of my screen BY accident and immediately found it annoying when I put it back on.

Now my only indicator at all is a volatility stop that I just use like a moving average but never trade off it.

The only reason I say any of this is I would reccomend anyone starting out don't overlook price action. If you can learn price action then you have a great base to build on.

Unless your already comfortable with DOMS, level 2, Time and Sales ect... I do have time and sales on my screen but its more for feel. I aslo have a small higher timeframe line chart of closes in a small chart off to the side as well that I can support and resistance glance at.

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  #9 (permalink)
frank25
New york
 
Posts: 16 since Apr 2020
Thanks Given: 12
Thanks Received: 4

Thanks for your input. Very helpful!

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  #10 (permalink)
NightOwlinLA
Los Angeles, CA USA
 
Posts: 3 since Jun 2020
Thanks Given: 2
Thanks Received: 4


I am also just starting to dabble in futures (mainly ES and NQ) and in my research so far have found at least three futures trading schools (as in ideas, methods) in no particular order:

1- Price action / TA traders - basically trading off charts, breakouts, candle patterns, etc
2- Order flow traders - scalping based on DOM, footprint charts, time & sales
3- Market profile / volume profile traders - use the profiles to find key levels and trade the bounces/crossovers between key levels

Now I'm not saying they are all completely independent and there are no overlaps. More often than not, people seem to use at least two of the three.

I'm coming from stocks and options trading so I'm more familiar with #1 (as most traders also are) and have been studying market/volume profiles and that is really gold. Being a TOS user currently, I have not interacted with these tools specialized in order flow like Gigsaw and Ninjatrader (I mean their new order flow package) but it does seem to give an edge with the enhanced DOM, delta/calculations, real-time DOM charting over price, footprint charts, etc.

TOS has a very basic DOM and time & sales but it moves way too quick and it's hard to make any sense of it.

As a beginner with futures, I'm curious as to what the veteran futures traders think here? Has it become essential to have these "enhanced" order flow tools to be successful trading futures or experience alone is what matters, regardless of platforms and tools?

Thanks!!!


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Last Updated on July 20, 2020


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