Thursday, 9 June 2011

Picking Which Market To Trade

As volatility drops in many markets, it's probably a good time to talk about picking which market to trade.

More volatile or less volatile? That is the question, as The Bard might have said.

Things to consider include whether you want to trade:
  1. Lots of contracts with a small mark up
  2. Lots of trades a day
  3. Making quick decisions or with more time to analyse
  4. Long trends or short swings
While a change in the volatility of the market you usually trade is a problem, as the fingerprint of your market has changed, a low volatility market is not necessarily a bad thing. On the LIFFE floor, one of the large volume markets was the Short Sterling market - short term UK interest rates. This market had a basic range of a few ticks per day and people traded for one tick but with large size.  Then we had the German Bund where the ranges and volatility were much bigger. Days of 50 tick ranges were common. There were 1 contract traders and 100+ contract traders.

Finding what suits your DNA is one of the challenges of becoming CP. Having said that, a CP trader should be able to trade any market after a few days of lurking.


  1. Thank you for your articles, have been reading your blog for a long while now.

    Which market do you like to trade during the summer?

    This will be my first summer trading futures, as I only got into trading ES and CL last October.

  2. Crude would be my choice out of those two.

  3. Thank you for your response. I have now started to also watch Corn and Wheat, just to keep me busy and focused on trading when I have no clear and strong trading signals in CL.

    Wish I had your FloBot though -automating my entries would surely cure my fear of pulling the trigger. It's unbelievable how many trades get away from me.

    Anyway, thank you for your blog again; I started reading it due to Kiki, I love it when fellow females get into trading.