Yesterday we longed GC at 1326.5 and sold the last 1/4 at 1343 for 165 ticks best out. For those that are not familiar with the way GC trades that is $1650 per contract on the last scale. If you want to make $1650 per contract on the ES/YM you would need a 33 point move in the ES or a 330 point move in the YM.
The fact of the matter is that unless we revert back to Fall 2008 or the "Flash Crash" 33 point moves in the ES are NOT the norm. For this reason I have been trading a lot more GC, 6E, and CL than the ES or YM. These contracts are just offering much better volatility than equity.
Even today we traded GC, long off the lows, for a best out 50 ticks. On a per contract basis that is equivalent to 10 pts in the ES or 100 in the YM.
The ATR for GC right now on a daily basis is 20.28 pts or 202 ticks. For ES it is 12.59 pts and for YM 98.41 pts. For 6E it is .0151 or 151 ticks. For CL it is 1.93 or 193 ticks.
You can do the math but here is a little table:
ES 12.59 X $50 = $629.50
YM 98.41 X $5 = $492.05
GC 202 X $10 = $2020
6E 151 X $12.5 = $1887.5
CL 193 X $10 = $1930
Just something to think about.
6 comments:
Your argument is good but also understand that you could lose $1650 in the same amount of time.
Not exactly! That is what stops and risk management are for on ANY instrument that you trade :)
you did not mention margins... bottomline any return makes sense only in % over investment
That's why I like the TF :) 11.7 avg range = 117 ticks or $1170 range
i understand what you are saying about the volatility and potential for profits however you would be trading more ES cons then GC cons so it kind of is proportional. this however does not take away the fact that youm should be diversified
however you would prob trade more ES cons then GC cons so it is proportional. diversification is good though lol
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