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Clint Chastain wrote:
>
> I have been looking into the MidAm as possible lower risk way to start
> getting my feet wet in terms of trading commodities and futures.
>
> Smaller contracts, lower margin requirements, & longer hours all make it
> seem very appealing to a commodities newbie. However, a couple of things
> have raised my suspicions:
>
> 1) The volume and open interest figures seem rather underwhelming as
> compared to some other markets. This appears to result in more gappy,
> fly-specked charts which are more difficult for me to follow. Apparently
> longer time frames are called for??
I am a small, end of day trader. Since the prices on the Midam and full
size contracts are almost identical, I suggest you use the full size
contracts for your analysis. The "spotty" nature you have observed is
because, in many contracts, the Midam does not trade in continuous
fashion like the big contract usually does. However, your order will be
filled when appropriate and with little extra slippage if any at all.
It appears that the Midam people make a market to match the big mkt. +/-
a tic or two. As a retail customer, I have probably traded about 100
trades on the Midam in many but not all of the avail. contracts, over 3
years, and have had very very few complaints. (These were 1 lots except
an occassional pair for grains.) (I don't claim to be successful but
fills aint' the problem.)
I think your decision about timeframe, would be influenced by the higher
relative commission costs of trading Midam ctcts, not the charts. Dont'
underestimate the impact of this. A $30 comm. trading a Midam corn
looks like a $150 comm. to your method unless you account for it. In
fact to trade the 1/5 size grain contracts probably requires a long term
perspective, esp. for corn or oats.
conrad bowers
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