What to Trade - just right

Beginner Questions
1

Hi Guys,

Is there any instrument (Forex, equity, derivatives, commodities, indices) with the below properties:

  1. Regulated and traded in an exchange

  2. Is not susceptible to frequent fluctuations for reasons pertaining to fundamentals and market operators (guess this rules out stocks)

  3. Can be both longed and shorted without requirement of a huge initial deposit

  4. Has high liquidity

  5. Does not require a huge minimum trade size (per tick dollar value for P/L must be maximum of $5)

Thank you

2

Some of them are slightly conflicting objectives, in reality … I think the nearest thing I can come up with, for that list of criteria, is NQ futures (the e-mini-Nasdaq).

  1. It’s regulated and traded on an exchange.

  2. It moves “how the Nasdaq moves”, really … so you [I]could[/I] call that “fluctuations for reasons pertaining to fundamentals”, I suppose, but it’s an index, not an individual share, so it’s certainly not “wild” or anything like it. It moves about more than its “big sister”, the “ES” (e-mini S&P futures), but that’s what some people prefer about it, and anyway the ES is $12.50 per tick rather than $5 per tick).

  3. You can trade it either long or short. You need a few thousand deposit. But hey: surprise surprise - obviously you’re going to need a few thousand before you can trade anything that moves at $5 per tick, anyway? If you were trading spot forex, say EUR/USD, and wanted your position-size to be $5 per pip, you’d be trading half a full lot and would need a decent deposit to trade in that size, even allowing for leverage?

  4. It has high liquidity. Ok, not as high as ES, but high enough for hedge funds, anyway - so clearly high enough for you and me.

  5. It’s $5 per tick.

How did it do, on your criteria?

My [I]guess[/I] is that if it doesn’t “pass”, then you’re maybe not, realistically, going to find anything that will.

In summary, then, I don’t know if NQ futures are “just right” for you, but I think it might not be easy to find something “righter”.

(There’s also “YM”, the e-mini Russell, and one or two other things that move at $5 per tick, but they’re not as good as NQ, on your criteria, in my opinion. And there are one or two e-mini futures options that are even a little less than $5 per tick, but their liquidity is [I][U]poor[/U][/I], slippage is high, and so on. They’re probably not relevant to you.)

3

Thank you Lexys !