Re: Does anyone daytrade Index Futures
I think one of the main reasons why you find more/faster blowups with new futures traders is leverage. Most people don't understand risk and how to manage it. A lot of brokers allow you to trade 1 ES(S&P 500 fut) contract for $500 margin. If you are really trading at that ratio, you are nuts and bound to blowup. The futures market moves fast and given the natural leverage of the market, undercapitalized accounts(5k, even 10k) can't afford many mistakes.
For those who are consistently profitable, futures leverage is definitely an advantage.
The competition is tougher(from what I hear) trading futures. Certainly, the rewards are also bigger than trading stocks. You'll find stock traders who can't adjust to futures complaining that the futs are too efficient, especially the ES. Definitely more efficient but just requires harder study to find exploitable edges. Lastly(though I myself don't like this argument), stocks benefit from the natural +EV environment while futs are zero sum and in fact negative after commissions. Oh, and that reminds me about relative commission disadvantage for retail accounts when trading futs. These are just some things to consider.
|