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At 4:26 PM -0400 7/20/98, Earl Adamy wrote:
>
>I began day and position trading futures this spring after position
>trading NYSE
>stocks in lots of 1000-3000 shares for a decade.
Interesting similarity to my situation. I also traded stocks for years. I
spent hours in analysis and still got killed once in a while by management
manipulating the numbers, flaky analyst recommendations, unexpected
earnings surprises, etc. I concluded I needed at least 30 stocks to spread
the risk and following this many was a huge amount of work.
Then, about a year ago I met several money managers who were making 50%
returns per year trading the Rydex funds with a several-day holding period,
as a part-time job. Much less analysis and very simple trading systems. So
I developed some systems for this that seemed a lot better than what they
were using.
Then, I had the opportunity to discuss my system ideas with the chief
technical guy at ProFunds at a conference last winter. I was interested in
how they got their funds to track the S&P with the beta of +-2.0. After
about a half hour of discussion, he said that he would be happy to take my
money in his funds but asked, "Why don't you just trade the S&P futures?"
> You can go long and short.
> You can enter/exit on stops
> You can switch any time of day, not just at the end of the day.
> You can insure the overnight risk with options on the futures.
> Leverage is much greater.
So I have been playing with this for a while, learning about futures. In
the meanwhile I am using the signals from my system to trade OEX options as
a low-risk, real-money test while I learn about futures.
I have not been able to find an Internet futures trading process with the
kind of service (fills matching BMI quotes, fill reports within seconds,
low commissions, etc.) that I was accustomed to with stocks. Maybe it
doesn't exist (yet).
Bob Fulks
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