A: There are many very compelling reasons why most serious traders prefer to trade futures YM to stocks. Here are a few of those reasons. If you wish to know more information about a specific point, feel free to e-mail us.
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1. Commissions are exceptionally reasonable on the dow e-mini YM.
2. Anyone can day trade without needing $25,000+ in the account! A lot of our users have modest
accounts.
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3. Taxes are less complicated. You're not required list every sale on your
tax
return! (US).
Market liquidity Futures are always liquid enough. Market orders are instant. No strange fills or jumps
in price.
4.
The spreads are never going to be huge like they can get on stocks, decreasing causing slippage.
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5. Focusing on one instrument day in and day out is less complicated and more productive Most
everyone who is successful in the trading business started out by mastering one particular market.
We'd rather be the master of one market then a jack of all trades.
Each individual stock has it's own characteristics of price movement and it's character can change
from day to day, making it either a good or bad choice to trade at any given time.
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6. Freedom. You don't need to wake up 3 hours before the market opens to scan for stocks or
opportunities to trade.
7.
Share size allocation is easier.
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8. RISK: We've seen stocks that plunged 20 points due to a random company event. While global
economy reports move the futures from time to time, it's never as unpredictable as a single stock can
be.
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9. There are always shorts available. There is no up tick rule you need to follow.
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10. The $5/tick range of the YM e-mini futures contract makes for lower slippage.
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11. Bang for the buck. A futures trader making 1 - 3 trades a day and can make as much as multiple
stock juggling traders.
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12. Less stressful. Concentrating on one liquid market each day will improve your focus and allow you
to work on your setups. Keeping track of 5 - 10 securities can be cumbersome.
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13. Market direction. You don't have to follow systems that mirror the indices/ sectors, as eminis ARE
the indices. Stock traders constantly have to follow the cues from the indices to track their positions.
That means you need mulitiple eyes to follow all those charts.
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14. Less investment in hardware and software. I used to own 3 PCs sccompanied by 3 monitors.
15. Now I have 1 PC and 1 monitor. Also, I used to use 4 charting services, now just 1 main, 1 backup
and its free!
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16. Very infrequent surprise gaps to deal with. The futures markets are virtually always open. The e-
minis trade 23 hours a day with a pause between 16:15 - 16:45 EDT. When terrorists attacked
the London underground in the early hours of the morning, if you wanted to, you could get out in
minutes and not have waited until the market opens to dump the stocks along with the panicking
crowds.
There are NO market makers playing games with the particular stock.
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17.There are NO routing decisions to make: " ECN? ARCA? REDBOOK????? Oh man, could have
gotten a better fill with ARCA! " .
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