For Steve: The Appropriate Markets for MTP?

[Horst Baum]

Hi , Steve!
I'n new on your boat, but I'm not a newbie!
1. What are the appropriate markets/instruments suitable for MTP?
You know that Elliott Theory and Fibonacci applications are suitable moreover for large volume markets where really one have a strong Bull and a strong Bear, also a good continuity: You know there are many American stocks having many days without trading!I think these are to be avoided when compounding the Basket/Portfolio for tradeable instruments! Please comment the basic rule for choosing the instruments for your trading tool that is MTP !Or at least , what are those instruments that must be avoided?
2. I saw on your website that you treat also Forex. Everyone knows this is the biggest on the world market! But what are those currency pairs suitable for MTP? I guess not all of them are the same profitable for MTP for the same point of view as above !
Example: Something like NZDSGD ( extremely low volume of exchanges!) I guess are not suitable like for example NZDUSD , much more large volumes than NZDSGD !
3. I saw also you considered Futures. What are those Futures you considered as the appropriate for MTP?
4. Regarding Stocks: S&P 500 are those reccomended among all the American Stocks?

Thanks,
Horst

[Steve Griffiths]

Hi Horst,

Thanks for the message.

If looks like you have answered yourself alraedy in that you have spotted that the best markets to trade are the ones with the higest volume, and as such low volume and inactive markets are best avoided.

Thanks

Steve

[Horst Baum]

Thanks ofr your confirmation , Steve!
Please, be more specific regarding :
1.As stocks: The American Stocks: the S&P 500 are the most avisable?
2. As Futures : The "45 Futures of Matt" ( see a replay posted by Matt yesterday if I'm not wrong , when he posted his 45 preffered futures!). If not these, then what Futures are reccomended?
In another thread, Philippe made a valuable simulation again on futures: What are those futures?
3. As FX Spot?
Regards,
Horst

[Steve Griffiths]

Hi Horst,

I cant give a specific list as the exact choice will be up to you, as I do not know your specific financial situation, therefore it would be inappropraite for me to be specifc here as everybody's risk profile is different.

But definatly stick to the ones with the higest volume and the ones that are the most active.

Thanks

Steve

[Tony Beckwith]

This article in the current Feb 06 Stocks & Commodities magazine gives an interesting overview of liquidity conditions in futures contracts - with a mathematical basis, for those who want it.

'Relative contract liquidity' ranks futures markets on a stated mathematical basis, from the Eurodollar market all the way down to the Japanese Nikkei 225.

http://www.traders.com/Documentation/FEEDbk_docs/Liquidity/FutLiq.html

Thanks

Tony.

[mattijschris]

Dear Steve,

I the trading manual it says that you scan on a daily basis 1000 high volume stocks. How are these stocks selected? I guess that with an easyscan on Telechartdata, it should be quit simple to create such a watchlist that is automatically updated. Is that the way to do it?

Is there any research or data on the difference between trading such a list of 1000 high volume stocks or the S&P500 stocks or the IBD ÿour weekly review" (which Matt is trading in the Risk Report)?

What to do with the IBD list when the major trend is down?

Is it so that trading futures EOD is more profitable than stocks EOD? Is it also more risky if the position sizing is applied correctly?

Thanks if you or Matt could answer my questions.

Mattijs Christiaanse

[Matt Bowen]

Hi Mattijs,

I the trading manual it says that you scan on a daily basis 1000 high volume stocks. How are these stocks selected? I guess that with an easyscan on Telechartdata, it should be quit simple to create such a watchlist that is automatically updated. Is that the way to do it?


Steve created a video on this:
http://www.mtpredictor.com/SlideShows/TC2005-15/TC2005-15a.html

Is there any research or data on the difference between trading such a list of 1000 high volume stocks or the S&P500 stocks or the IBD ÿour weekly review" (which Matt is trading in the Risk Report)?


No research has been on this. We simply are using different list to help show people how to work with different list of stocks. In this U.S. we have many people that read the Investors Business Daily newspaper. So, I decided to create a list of Stocks based on what people are looking at...that is all, don't read too much into this it's not the "Holy Grail list of stocks to operate from". Again, it is simply a list to watch and work with...different strokes for different folks. We can't possible offer "Every Single list under the sun" so you just need to pick from a list that makes sense to you. You have to work with stocks that makes sense to you objectives. If you objective is to just hedge inflation, you might just look at the Dow-30.

There is not not a "Right list" or "Best list" to work from. The IBD list is a good list for those people who read the IBD newspaper, that's really all it is...just another list to work with.



What to do with the IBD list when the major trend is down?

GET OUT and stay on the side lines... When the market is in a down trend, you are going to get stopped out on 4 out of every 5 stocks you try to buy. Another words you're going to get a VERY CLEAR WARNING when the market is in the tank. Think about it for a second, if you every time you go to buy 10 stocks and 8 of them you get stopped out on...would that not be a clear warning sign something is not right? IBD stocks are for people who BUY stocks only... they are pre-screened for buying not selling. You have to understand, the majority of the public domain do not even short stocks. In fact, most of them don't even know how or know that you can short stocks.

Is it so that trading futures EOD is more profitable than stocks EOD? Is it also more risky if the position sizing is applied correctly?

Trading Futures is a lot more profitable than stocks, I have proven that beyond a shadow in my daily newsletter. The reason people trades stocks is because they don't understand risk and how leverage works in the futures markets. Just remember, it takes BIG money to make BIG money in stocks. Plus, you can't use 2% position sizing in stocks, so you are at another disadvantage for overall performance. I don't recommend people trade futures unless they understand money management. Telling someone to trade futures without them fully understanding position sizing is like giving someone a loaded gun, they are going to hurt themselves or someone else...

Trading is just like running a business and 90% of all businesses fail within 5 years because the majority of these business owners FAIL to understand risk management. Trading can offer huge profits and a life you only dream of, but you must first control the downside, that is why you must learn to lose first. Once you learn to control the downside, you can let the profits take care of themselves.

Hope that helps,
-Matt

[mattijschris]

Thanks Matt,

Your answers are a BIG help.

Mattijs Christiaanse

[BillVA]

Matt

You said "Trading Futures is a lot more profitable than stocks, I have proven that beyond a shadow in my daily newsletter".

Is there someway I can read these newsletters?

Thanks

Bill

[Matt Bowen]

Hi Bill,

Is there someway I can read these newsletters?


Sure Bill, send me an e-mail at: matt@mtpredictor.com and I will put you on a 30 Day free trial.

Thanks,
-Matt

[mattijschris]

Dear Matt,

After your last answer I decided to devote myself to futures and skip stocks. Could you help me a bit with the first steps. Is there a list of futures that are specially good for trading. On which exchange are they traded? What is a good broker? Are there different opportunities living in Europe or in the US? What is a good datavendor?
By the way: I don't have any intention for daytrading. I only want to do EOD.

Thanks if you could answer my questions.

Mattijs Christiaanse

[spp]

Mattijs
It's been about ten days since your post here so maybe you already found some answers but I'll take a quick shot at them.

"Is there a list of futures that are specially good for trading."
Two suggestions for you here. This forum allows you to search for posts by author or keyword. Search for all of Matt's posts & read through them as he's been asked questions similar to yours in the past. I believe I remember him posting a list of tradeable markets before. Second, email Matt and have him put you on the list to receive his Risk Report. There you'll see his list of past trades in futures, which will show you where he's trading.

"On which exchange are they traded?"
Once you have some futures symbols to work with from the above two suggestions you can look up the exchanges on the internet on your own.

"What is a good broker?"
I'll throw out a couple, though, there are many out there & this is just to get you started. Interactive Broker (IB), I believe, offers some of the lowest rates you'll get unless you're doing pretty decent monthly volume. If you're trading substantial monthly volume there are a good number of brokers that may negotiate with you towards a lower commission than IB will give you. However, IB's a good place to start. You can trade futures, stocks, forex and most everything else through them. Another possibility is TradeStation. I'm pretty sure they lowered their futures commissions to the same as IB and you get the added bonus of being able to use their included real-time datafeed for your MTP software, so you won't have to pay for that separately. However, it doesn't sound like you need RT data & Tradestation requires you to trade, I believe, 10 futures roundturns per month or else you pay a $99/month fee. You'll want to check the details on all that. Also, with TradeStation you get their highly thought of charting/backtesting software. Again, there are many other brokers out there that may suit you well.

"What is a good datavendor?"
I'm not your best source on this cuz I use real-time data and it sounds like you're looking for EOD. There's been an awfully lot of posts on here about EOD data - just search for & go through those.

"Are there different opportunities living in Europe or in the US?"
Off the top of my head I can think of three factors regarding where you live, though there's undoubtedly more. #1 is the tax treatment of profits & losses that differ from country to country. #2 is the trading hours - for example, if you want to trade European markets but live in the U.S. you will be trading in the middle of the night. #3 - there are some limitations on what markets you can trade depending on where you're living/your citizenship.

Hope that helps.
Regards
Sean