Why I Trade Stocks Over Futures

I love trading equity. One of the things I love about trading stocks is that there is always a “Bull or Bear market” somewhere. There is always a stock that is moving or what I like to call ”in-play“. Nothing against Futures trades, but I think trading equity gives me a big advantage when it comes to having more great risk/reward trades. There is always a stock setting up somewhere. Compare that to futures (Speaking mainly indices here) where you are limited to one instrument- the market. Yes there is the $ES_F, $NQ_F, $TF_F, and $DJ_F , but ultimately they are the same thing, the market.

However, when it comes to equity, each stock has its own personality. And on top of that, each “in-play” stock will usually be moving independent of the market. The In-play’s offer something that you won’t be able to get everyday with the market; great risk:reward opportunities. By great, I am referring to at least a 1:5 Risk/reward ratio. If I get my perfect setup, I will usually risk 10 cents to make 50 which usually comes with ease if its in play.

(Note: I am not saying you can’t make money trading the market. But I want to make my trading as simple and easy as possible)

 

The Charts

Here are some examples from today. While the market had a digestion inside day, there where a few stocks moving.

(3 min charts)

$SPY

Filled with chop.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ANF

Filled with opportunity.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$SWI

Filled with opportunity.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$MCP

Filled with opportunity.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I could easily list 10 more stocks that offered at least 1 great Risk/Reward opportunity, but I think you get my point. Equity just gives you the opportunities futures cannot on a daily basis.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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