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Norm:
Many points are well taken. I have found that
the currencies have the ability to trend for years. I also noted the risk
of holding overnight. There is always the hedge in options to
control risk. There are opportunities in the grains and sugar and I can
remember buying sugar at about 2 cents many years ago also bought some pounds at
$1.10. Also several years ago. The bonds don't usually move a point a day
which would be your $1000 dollar move, but it does move enough during the day to
trade it and be flat at night. Also the bond options are liquid enough to
trade or hedge with limited risk again. Three limit days in beans,
corn, meal or oil can also inflict a little pain. Like anything else, it
all depends upon what you are comfortable with. Ira
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<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
Norman
Winski
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Thursday, September 19, 2002 4:46
PM
Subject: Re: [RT] Commodities V. Stocks?
Read Whats tradeable?
see replies below
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<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
ira
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Thursday, September 19, 2002 5:05
PM
Subject: Re: [RT] Commodities V.
Stocks? Read Whats tradeable?
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Ira: In commodities, the most manipulated
markets are those on the New York exchanges. In fact I stopped trading
them years ago and only do so on special occasions.
NW: There is validity to your point. However, I
have found this to only be a factor if you are doing alot of day trading,
using market orders or stops. If you position trade using limits, you should
not have any problem. I have often gotten fills better than my limits
in NY.
Ira: The higher the volumes and liquidity
the less the chance for manipulation. If you were going to start
trading a commodity I would suggest the bonds, the 10 year Note, or
one of the currencies. Either the Euro or the Yen.
Remember that the most volatility in the currencies can happen at
night so there is some care that has to be taken there.
NW: All the markets you mentioned are subject
to govt. manipulaton. They also tend to be larger dollar items, such as it
is easy to make or lose two to three thousand per contract in Bonds in a day
or two. Currencies can be devalued or revalued overnight. I
don't think this is a good place for a beginner. A good market for a
beginner is a less volatile market such as Corn. One can get a
100+ year history for corn prices. It seldom moves more than $500 per
contract in day. Even during a big move, it usually has lots of
oscillations that allow one to trade in and out. Corn hours are a
sleep friendly 10:30 AM - 2:15 PM ET. Someone just starting can easily
put in their orders in the morning, go do soemthing else, and check this
market in the evening. Sugar is also currently a good market for a
beginner, as the total underlying value is less than $7,000 per
contract Once you feel comforable with a low price low volititiy
market such as Corn or Sugar, it is easy to graduate to the bigger games
such as Wheat, Soybeans and the other commodities. Most commodities are
not conducive for day trading and should only be used as vehicles
for taking positions that may last from several days to several months.
Once you have graduated through some of the wilder commodities, you may
consider graduating, if properly capitalized, to the crazier markets such
as Coffee, Bonds, and S&Ps. Bonds are a good market for
trading short term swings because their short term volatility tends to be
disproportiantely high to their longer term or annual volatility.
Ira: I think that the last place for a
beginner to be is trading the E Mini, DJ $5 contract, NASD mini. they
are great contracts to trade electronically, but not for a beginner or a
novice. Also as you go from the E Mini to the DJ $5 contract to the
NASD mini the spreads get greater and the liquidity gets less. The
last thing you should trade is the S&P futures contract as a
beginner. I have left the grains and meats out as they are still
traded on the old pit basis. They are interesting to trade and far
less treacherous then the NY markets. Remember one thing in
trading commodities that they can change the rules at any time. They
can change margin requirements, They can change whether you can take
delivery on a commodity, and almost anything else they want to for the
benefit of the members of the exchange.
NW: Yes, the house always reserves the
right to change the rules in the middle
of the game in order to save the house. However, this has very seldom
happened and then only during extreme conditions. The US Govt.
has also pulled this same stunt when stability was
threatened. So, don't buy Silver at $52 per ounce, having come
from $1.60, or Wheat at $7 per bushel, having come from $2 per
bushel, i.e. all time historical high prices, and expect to
make a fortune. These extremes potentially threatened the
stability of the system aka "the house" so measures are taken
to assure the preservation of the game.
Regards,
Norman
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----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
Sean
Cassidy
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Thursday, September 19, 2002
1:50 PM
Subject: [RT] Commodities V. Stocks?
Read Whats tradeable?
I have heard and.....and it certainly seems
reasonable, that commodities are more likely to follow and trend and are
less manipulated than stocks. This seems to increase the likeliehood of
success tradingh them, is this true?
Or the real question I want to ask, given a
$40,000 account, what asset class that has been discussed here, is the
most "tradeable". This being with a reasonable learning
curve.
I would love to have a discussion about this,
im tired of trying to chart the fact that the CEO of the company I own has
a golf course in his bathroom.To unsubscribe from
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