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>
> Cliff.....
>
> Re:your comments on the mini.
>
> I totally disagree with you. What is wrong with going short/long a
> few mini's for a 5-10 point move????? Look at it this way...The
> mini's are exactly like trading a bean, wheat or corn contract. Are
> you also saying that they should not be traded???? In fact, the
> mini's give you a higher daily range(and better profit potential)
> than any of the grains.
>
> Please, put this into perspective. No, the mini's are not to be
> traded for a one point move(either are the grains)...Yes, the mini's
> can be traded for a 5-10-100 point move(like the grains).
>
> Hope this helps put the mini's into perspective.
>
> Tom Stein comfut@xxxxxxx
>
Tom,
your point is a good one, and correct that one has a much better
chance at success at the mini if the trading horizon is longer-term.
Remember though, that the longer-term view also means accepting
larger risk levels for the trade. Plus exposure to 24-hour trading
where the mini could easily move 6 big points on europe's watch.
Everyone looks at profit potential, and I am saying look equally (or
more) at the risk side. Short-term or long-term, when a large
volatility risk is added to slippage, high relative commissions, and
potentially disasterous stop executions, the probability for ultimate
success is greatly reduced, and possibly eliminated.
While this is true in all markets of course, the mini has certain
characteristics that accentuate the negative outcomes. Look at the
components of a losing trade. When costs (in/out slippage, execution
slip, commission/fee, etc.) are a significant percentage compared to
loss caused by market movement, watch out. Those costs not only add
to losers, but subtract from winners, making it harder to "get
ahead".
A guy named Nauser Balsara did an article for either Futures or TASC
back in 91 or 92. It is one of the only ones I had ever seen on the
undisputable and unavoidable facts of the risk of ruin. It had some
simple tables and equations that anyone can use, and was very
valuable. If you want to make trading a success over the long term,
and not just a few lucky hits, you absolutely cannot ignore this
element.
Good trading!
Cliff
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