The Easiest E-mini?

http://www.tradingmarkets.com/.site/eminis/how_...

clipped by Piter Jun 01, 2008

100 500 E-mini futures Nasdaq S&P Trading

Notes by Piter: Money is made for traders when price action is moving directionally. It stands to reason that the more directional a symbol is, the more opportunity for traders to buy low/sell high or sell high/buy low exists. Nasdaq 100 E-mini futures or "NQ" are far su

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The Easiest E-mini?

By Austin Passamonte | TradingMarkets.com

Up to 90% correct swing trading strategies!

When traders talk about trading E-mini futures, E-mini S&P 500 or "ES" is the first thought that usually comes to mind. It is by far the most popular stock-index market traded, by retail traders and institutions alike. That widespread popularity is not necessarily a good thing. Program trading arbitrage attempts at capturing the difference in price values per tick between E-mini and full-size S&P contracts creates a lot of sideways buzz in price movement. Other program trading efforts by funds and institutions involve arbing the futures against cash index pricing with SPY shares, futures against cash SPX options, futures against baskets of big-cap stocks and a plethora of other complex spread equations.

That type of layered congestion keeps the E-mini S&P constantly retracing its steps. Between directional swings of price movement up or down, there is consolidation with any market. That's how the pattern of price action plays out... consolidation leads to directional expansion, which then settles into consolidation. That cycle repeats itself over and over again, through all time frames and conditions. In the case of E-mini S&P futures, consolidation is created and emphasized by any number of arbitrage programs playing tug-of-war with the tapes. It's not like the index is going through the usual progression of accumulation, distribution and rest. The ES is constantly being pushed around in a small sideways range by sideways trading strategies designed to arb temporary price discrepancies.

What does this mean to retail traders?

Many things. Because the ES contains so much sideways congested price movement or "noise", a lot of E-mini traders direct their focus on that. They work really hard at developing strategies that capture mere ticks of profit as successful trades. All manner of complex initial stop-loss, multiple contracts scaled out of to exit and bigger risk / smaller reward ratios are toyed with in search of success.

With very few exceptions, retail traders all fail miserably in these attempts. The concept of trading tiny scalps within sideways noise is just an illusion, not a viable path to success.

Nasdaq 100

Money is made for traders when price action is moving directionally. It stands to reason that the more directional a symbol is, the more opportunity for traders to buy low/sell high or sell high/buy low exists. Nasdaq 100 E-mini futures or "NQ" are far superior to the S&P futures in this regard. NQ futures lack the dogged back & fill behavior of ES futures. The NQ is smoother, straighter and much more directional. It spends less time in consolidation. When the NQ breaks from consolidation, it moves away from those areas where traders enter long or short trades without constantly chopping the initial stops.

NQ futures have more than enough liquidity for any retail trader. With 300k to 500k contracts traded per day, blocks of 50 to 100+ contracts clear constantly with nil or no slippage on the fills. At $20 per index point with four ticks inside, the $5 tick size is relatively tight. An average intraday price range greater than 20 index points creates plenty of opportunity for profit from directional swings.

Too many traders place emphasis on potential profit in the wrong areas. One of the mistakes I've heard & read about is a correlation between average true range of a symbol and/or tick size versus commission costs. The fallacy logic is that one symbol offering greater range or smallest tick size therefore gives best "bang for the buck" when it comes to trade costs.

That ill logic is a red herring. Trade costs are highest - worst in symbols that move sideways excessively, creating more trades due to stop-loss orders being hit in persistent chop. Trade costs are lowest overall in symbols that require fewest trade attempts to capture profitable swings. Fixating on commission costs and shaving a dime here & there to lowest possible per-turn rate is pennywise and dollar stupid relative to focusing on which symbol requires the fewest trades to capture price movement going up or down.

If it commonly takes a sequence of long, short and short in the ES to capture the initial $200 per contract price move lower whereas same signals in NQ are long and then short once to capture an equal $200 per contract profit, you saved yourself one commission cost in the entire exchange. That type of trade efficiency goes a lot further to shaving the bottom line than upping volume of contracts turned just to save another 20 cents per turn. Dollar-wise efficiency is one of many strengths the NQ offers. It makes straighter moves and has much less noise than ES. Therefore, a solid strategy to trade it will give fewer trade signals with higher win percentage ratio as a result.

10min Chart: NQ

An example of intraday behavior for the NQ is shown from May 12th. Price action opened just above the daily pivot point (black line) and moved lower to test for support. A lift from there broke through R1 (thin green line) and pulled back in methodical fashion before lifting to R2. A break above that resistance and pullback into what is now support then lifted further to new session highs as one would expect from that sequence in the afternoon.

Total price range was just over 40 index points from low to high, an $800 per NQ contract span. Smooth, deliberate, methodical and directional. Terms that apply to the NQ more than any other E-mini index symbol to date.

Summation

All markets are tradable, and all markets are different. Traders who are still struggling to create success and/or searching for their own personal ideal symbol would be wise to consider trading the NQ. It is the #2 E-mini contract in volume and open interest for a reason. Many professional, full-time retail traders are there. A good place to be for those who prefer less noise and more honesty in price moves signaled.

Forex Blog: Top 100 Forex Resources

http://www.forexblog.org/2007/04/top_100_forex_...

clipped by Piter Sep 01, 2007

100 Blog Forex Resources Top

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Top 100 Forex Resources

The average daily forex trading volume currently exceeds $1.9 trillion. With so much on the line, we've put together a list of our favorite 100 forex resources to help you become a knowledgeable forex trader. The following resources were chosen for the quality of information and training tools offered. Although some of these tools are located on commercial sites, you'll find value in materials produced by professionals. Other sites were chosen for the resources that they offered for a price (like books), but they're all geared specifically toward the forex trader. The chosen sites are written in the English language, but some individuals, businesses, and organizations are located in areas other than the United States. All sites are listed in alphabetical order within the following categories:

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Beginner's Paradise

If you're a forex newbie, the following sites will help you get a grip on the similarities and differences between forex trading and stock exchange trading. Take advantage of free resources before you dedicate any serious cha-ching to training.

Action Forex — Learn about the forex market through free e-Books, news, insights, and much more.
Currency College — Currency College delivers a variety of course offerings with classes that are held at the student’s convenience. Each class is followed by homework and tests; each course lasts about six weeks; and each class contains about ten students. Emphasis is given to risk management. This is not free education, but if you bring referrals to Currency College you could earn a scholarship toward your tuition. This site has plenty of free resources, however, like a comparative chart for various trading platforms so you can make an educated choice about trading platforms.
CyberTrading University — This site offers free forex training through a two-hour video that includes a brief history, PIP spreads, majors and crosses, economic indicators, fundamental analysis, technical analysis, short-term long-term fundamentals, trading rules, leverage and margin, trading psychology, Fibonacci Retracement Levels, moving averages, oscillators, Candlestick Charts, Bollinger Bands, and more.
Forex Charting 101 — A brief and basic overview of forex charts from Pip Trader. You'll discover that the charts are very similar to those that you might use for securities trading. But, some of the charts may seem more complicated if you're not a seasoned trader.
Forex Realm — Possibly the most comprehensive and thorough forex education online. Learn about everything from currency codes to exotic trading strategies through articles, graphics, and concise examples.
Forex-Training.com — Fairly comprehensive training with a free demo account. The highlight to this site is their explanations about various charts.
FX Home Trader — Focus on the information about technical analysis, where you can learn more about Fibonacci Trading, Pivot Points, and more. Their Forex Facts also contain some valuable information.
FX Power Trading Course — Offered by FXCM, this paid course is one step up from free at the current price. Learn how to time the market, recognize trends, and basics in fundamental and technical analysis through this eight-day course.
Investopedia on Forex — An extensive 10-part article on forex investing, from an introduction to a recap that covers everything from benefits and risks to technical analysis. If you can't get enough of Investopedia's information, head to a list of their Forex articles, where you can learn more and download their free e-Book entitled, "High Probability Trading Setups for the Currency Market."
Law of Charts — Joe Ross offers advice for traders across the board, but the information contained in his "Law of Charts" offer speaks to forex as well as any other trading strategy. He identifies chart patterns that result from human behaviors and points to entry and exit targets on those charts. You can take advantage of Ross's other tools as well, including the forum.
Learn4X — This is an interesting site simply because it contains several tests that help you determine if you have the 'guts' and knowledge to be a trader. They also offer a free online seminar.
Market Traders Institute (MTI) — You don't need to spend a lot of money to train in forex markets. MTI offers many free resources such as videos and lesson plans that will help you get off the ground. If you like what you hear and see, you can invest in materials for the advanced trader down the road.
My Forex Trading Tools — A site that contains overviews on everything from fundamentals to options.
Online Training Academy — Free basics on FX trading via video, offered by Mike McMahon. You need to register, but you can opt out of contact lists with a click of a box.
School of Pipsology — A lighthearted forex education from Kindergarten to College so the beginner knows exactly where he stands in an attempt to grasp the forex market.

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