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Sure. I stopped officially stopped working on The Street in the mid-90's, but I'm flattered to be asked to share experiences -- even if they are a bit dated.
I know of no day traders, professional or otherwise, who trade only one instrument day after day. I know of many day traders who end up trading just one instrument on any given day; not out of choice, but because they cannot find another instrument that fits their criteria for a good trade. So to answer the second part of your question, to follow a strategy that depends upon one instrument which will give you the correct setups to profitably trade every day all day is unlikely. I'm not sure that qualifies as being "unwise" but I doubt it will allow for Trader Tax Status to be maintained.
To be clear, I know of traders who specialize in just one instrument but they are not day traders. They may not trade for days while waiting for a good setup. These are not day traders by the TTS definition which is what I assumed the question was about.
I have a number of instruments that I watch and occasionally trade, when set-ups are perfect...… but I trade the NQ, day in and day out. I know how it moves and I've become very familiar with its price action.
Trading: nq, es, Hype cool runner Ipo's months out short into lockup expirations. UVXY, TSLA options
Posts: 24 since Feb 2016
Thanks Given: 3
Thanks Received: 60
That is a good question and there is no one size fits all Holy Grail answer. Some pro's do specialize in one instrument, or a few. Some specialize in one trading setup, or a few, in one or many instruments. Each trader has to go through a journey to arrive at what suits them; what works for them and what does not. Traders see different things and continue to evolve and see different things over time as well. Opinions are a snapshot in time of understanding and perspective. It comes down to what you "see" in the markets, and how well you execute given what you see and what suits your interests, abilities and psychology/personality.
I like your post.
As a part-time investor/trader even by restricting myself to around 10 commodities, I realized that I missed opportunities so often (almost every day...). The opportunity to say that as this year I want to focus on having a very close look to my portfolio of PM, I'm focusing on mostly 2 MP this year: Silver and Platinum but of course I watch as closely Gold and Platinum and US Dollar Index and US 10y and 5 and 10y TIPS, bitcoins and a whole bunch of economical indicators so on...Fully busy anyway for trading on only 2 commodities...
I guess if you have figured out the nuance of more than 1 then it does not hurt. Some products trade similarly, but are currently setup a little bit different setup-wise that it might be preferable to do one than the other, or even in different directions, for example ES/YM. But you have to have a grasp of both and if they operate during the same hours you have to be a pretty good multitasker to keep track.
Hi, I believe for my very modest experience, that initially focusing on a single max 2 instruments is the smartest choice. Especially if you are a discretionary trader. This allows us to discover the true nature of a market and the internal dynamics that make it up. In this way we are better prepared to handle even the most difficult situations. I now work I am on ym (85%) and es is this is helping me a lot.
Please excuse my ignorance as this is my first day here and I'm only about two weeks into seriously studying futures (ES specifically), but why trade ES and MES? Is there a reason beyond the contract costs that I'm not aware of? Thank you!
No problem, my main reason for trading both is that it gives me better ability to manage risk. If the market becomes very volatile and my stop would have to be farther away than usual I trade smaller positions and go for wider targets. I don’t trade them simultaneously, I go between the two based on market conditions. There’s plenty of opportunities every day to structure reasonable trades so I don’t pay attention to other instruments aside from the occasional glances at my quote board to get a bird’s eye view of how the market as a whole is trading. I use different strategies based on the market structure rather than scanning between multiple instruments for particular setups. Both ways can be profitable approaches, this is just how I prefer to trade.
Edit: If you're just getting into futures trading, I highly recommend spending at least a few months in SIM before trading the MES live and then building to trading the ES. MES is much less expensive to learn on than the ES.