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This is in some ways related to the prior topic I started, but I figured it was worthy of it's own thread.
For day trading - common advice is to choose one market and become an expert on it. I think this is sound advice, but take it with a grain of salt as I'm not yet a consistently profitable trader.
Anyway, moving on.
I talked to a guy who had been trying to master ES/NQ for years, but gave up. Instead, he started trading German Bund Futures (FGBL on Eurex) and allegedly became very successful doing so. Very different markets. They move very slowly, but in short, I think this helped him and he also claimed it was possible for him to get those really good R/R entries and he could move a lot of volume.
So, food for thought.
Through all our struggles we often think our method is at fault (and that's probably true), but what if a solution could be to simply trade another market?
As you mentioned in your posting: " Food for thought", ok, then let's do it:
Different markets have different peculiarities (size of swings, reactions to news and fundamentals, seasonality, etc, etc). To recognize these peculiarities in detail in the different markets is surely one of the first thing to be able to do.
Charttechnique is in most markets about the same, so this is no, at lest to me, reason to change the market, but it makes absolute sense to look at three, four markets or even more regularly only by chart analysis. I can use my chart knowledge in this way over and over again, which then also helps if I only trade a single market.
Now what can be the reasons to change a market, starting with the most important reason from my point of view?
1. Margins (initial and daily margin), which I need to be able to trade there at all. Even prices of options in different markets are a very important reason to think twice over, when budget is low.
By the way: A recovery plan, after a big loss, can also be to re-enter a much more affordable market to accept smaller risk, usually with smaller profits, and in this way work back up to old heights.
2. How do I want to implement my trading strategy? Which TF do I choose and depending on the market, this also changes depending on the TF, what I want to trade on a chart. I do not go into details here, because there are X indicators, X ways to show a chart etc. etc.
Once the two above factors are clarified, what other reasons are or could be there to make a switch to an another market or even start to trade in many more markets?
One reason for this can be the change to another trading strategy, or another trading approach, which seems too expensive and too risky in the corresponding market, and now I reiterate myself. So for the time being I train with a small amount of money.
Another reason can be that I go away from pure futures trading and get more into the area of hedge strategies. Since, if done correctly and the broker also recognizes and acknowledges that the risk is reduced for him and thus reduces the margin limits, I can under circumstances also very quickly change into a market, which was perhaps not accessible to me before, because it is too expensive and my budget would not have been enough.
Now I bring in a last topic from my side, because there are certainly many other reasons to make a change from one traded market to another market or even to many markets. What can this be?
"Portfolio management" with a number of specific trading strategies from the "Futures/Option Hedge" area or even with pure "Options Strategies", which allows me to implement such strategies in various markets whenever suitable and then run them without too much effort.
By the way: I always traded "Portfolios" as a private person and in the company I worked for and never only one market before my retirement. But each and every one can for sure be very successful when concentrating just on one future market. There is enough prove even in this forum.
This simply as a supplement to the initial posting and as "Food for thought" without going further into the topic of "Portfolio Management", since I have already stretched the arc here on the topic quite far.
I trade micro oil, micro ES and micro Euro FX. My results very greatly between these three markets. I am really good at following my plan in oil and euro and not good at all following my plan in MES. In oil/euro I have no problem closing a trade when the price hits my mental stop. In the MES my will power to follow my plan deteriorates dramatically as the day goes on. Then I start fomo and revenge trading and end up holding onto losses until most of my account is wiped out. I think this is because I am influenced my the other players in each respective market. I would guess there are mostly professionals traders in the oil/euro and a lot higher percentage of newer retail traders in the MES. Those retail traders move in herds in the MES and I jump on the bandwagon with them headed to losses city. Just my theory.
For directional day trading - I'd say the ideal market would be one that:
1) Have frequent and clear trends
2) Gives good R/R ratios, i.e., you can easily enter risking 1 to gain 2
3) Respects levels and moves orderly (predictable)
This is my opinion and some may disagree.
The main reason why trading is difficult I'd say is because the market's generally 'fuzzy' and frequently changes mode/conditions, i.e., transitioning from range bound, wide range bound, up trend, down trend, narrow range, etc.
The Euro FX futures are a liquid contract market with the most liquid underlying spot market in the world. I have found the euro moves very orderly and rarely spikes in price. I do like trading euro fx because I can usually close a position easily with limited slippage. However I would say bonds are most liquid then the eminis. And all these market have a micro contract for the trader with limited capital. I even trade the micro 10year occasionally.
