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I began day and position trading futures this spring after position trading NYSE
stocks in lots of 1000-3000 shares for a decade. I had made good money (10-20%
per position over 5-10 days) using a program I wrote which scanned 2000+ stocks
nightly for candidates which had been hammered to the bottom and were completing
a base. I typically reviewed 50-100 charts per day to evaluate the candidates. I
started looking for another market to trade because: 1) stocks as an asset class
had risen to lofty levels, 2) my screen was turning up fewer and fewer good
candidates, 3) I was routinely seeing stocks chopped in half in a day or two,
and 4) (and most important) I was afraid to trade the short side against
entrenched management's which can actively manage the flow of earnings to the
bottom line. I tried the SPY (Spyders) for a bit but couldn't get the returns I
expected without leverage.
I'm far from an old hand in the futures business but I do know how to trade and
I have established discipline to exit bad trades quickly and unconditionally. I
day trade the S&P and have position traded a variety of other commodities
including sugar, dmark, pound, ngas. I find futures offer more asset variety,
offer opportunities to trade both long and short, and permit me to balance
returns and leverage in whatever combination I find comfortable. I do detest the
futures industry attitude toward off-floor traders, automation, and information
flow - makes me appreciate the great online electronic trading I had at my
fingertips while trading on the NYSE via DiscoverDirect. Futures trading is a
bit different and it's taken me months to adapt my techniques and get
comfortable with futures trading, but trading is trading and futures is a better
and more interesting game than stocks. One man's experience, anyway.
Earl
-----Original Message-----
From: Timothy Morge <tmorge@xxxxxxxxxxxxxxx>
To: Jim Osborn <jimo@xxxxxxxxxx>
Cc: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
Date: Monday, July 20, 1998 12:15 PM
Subject: Re: Why trade Futures?
>Jim:
>
>That's always the feeling I have had in the back of my mind. But these days,
>with the increased volatility and the ability to use *some* leverage and the
>masses specualting in stocks, I think it's a more viable possibility than it
>was, say, ten years ago.
>
>I still don't trade individual stocks, but I am looking at them, trying to
>decide if this new perception is indeed correct. If the volatility and masses
>speculating and ability to trade Nasdaq L2 allow me to trade individual stocks
>like I trade commodities, I think there may be greater edges to be found
trading
>an individual stock versus most commodities. You will certainly [I think] be
>trading against a less savvy crowd in the stock arena.
>
>Then again, maybe I have had the correct perscpective all these years and now,
I
>too am falling into the 'grass is always greener' misconception...Anyone else
>care to comment?
>
>Best,
>
>Tim Morge
>
>Jim Osborn wrote:
>>
>> was: Re: Floor trader Study
>>
>> "Neal T. Weintraub" <thevindicator@xxxxxxxxxxx> wonders:
>> >As a software user, many of you can trade any market you want. I am seeing
>> >that many of the users are Futures traders.
>> >Why with so many products out there and obvious gimme trades in the stock
>> >and mutual funds I wonder why the public loves a game where they have a
>> >better chance of reaching Bill Clinton this afternoon than making it
>> >trading commodities.
>>
>> I asked Alex Elder, after he'd described his early days as a trader,
>> why he'd traded futures rather than stocks. His reply was, "I didn't
>> have enough money to make a living trading stocks."
>>
>> Jim
>
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