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On Fri, 11 Jan 2002 10:26:44 -0600, Ernie Bonugli <ebonugli@xxxxxxxx>
wrote:
>
>I currently trade QQQ using the NDX signals. Excluding, the cost
>issues, would I achieve the equivelant result trading the ND
>(future contract)?
>
> But I afraid that
>the volatility of the actural futures contract may eat my lunch. And
>possibly render my system useless.
There are a variety of opinions on this. Here is a test you can run
to determine what would be best for you.
Will you be holding the futures overnight? How much capital will you
need to do this? Determine the amount you will need to trade your
system (some systems exit a portion of the trade and use a trailing
stop the on remainder--this would require multiple contracts).
Using this same amount of funds apply it to the QQQ, and QQQ options
and emini or large contract, recording the ask price of each when your
system makes a buy. Record the bid price(s) when your system gets you
out. Anything related to the NDX is remarkably liquid, whatever the
asset is.
Use the results to determine what value you will give for leverage and
what corresponding risk you are willing to assume. This will change
dramatically if your system holds overnight.
If you use any discretion in your trading watch the E-mini prices
instead of the NDX for entry and exit. NDX is only updated every 20
seconds or every minute depending on your vendor. E-mini is of course
updated every trade.
Please reveal the results of your testing.
Fred
"Success is the only test of genius" -R.Adm Daniel Gallery 1901-1977
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