George: ES vs NQ - Pros and Cons.
You already have two quality responses to this great question, but let me add my two cents.
Like you, I started with stocks, then moved to the QQQ, and from there "graduated" to the NQs. I now occasionally trade the ES also. My reasons have to do mainly with setups, tho. If I like a particular setup better on the S&P one day than on the NQ, I will trade the S&P.
However, for intraday action, I find the NQ more predictable, frankly, at common pivot points such as the 20emas. The S&Ps don't seem to turn as precisely as the NQs at well-known pivots , so I find them sloppier (!)
One other possible advantage of the S&P for new traders and small traders is this: Relative risk and flexibility with your trades:
Let's say you trade 1 NQ contract and it moves 12 points. You are up $240. Now it moves back against you 8 points. Very possibly, you get out and take your 4 points or $80. Often it will then reverse back in the original direction and leave you behind.
Now consider the same situation trading S&Ps, only you trade 2 S&P contracts. The move would be like 3 points (roughly a 1:4 ratio) instead of 12, so you are up $300 (a bit more risk involved. 25% more risk in the trade with 2 S&Ps.) But now you have the opportunity to take partials, but stay in the trade with half your position for the potential big move in your favor. So you take one contract off for a 1 point gain ($50) and bring your stop on the second to breakeven. Now when the market reverses in your direction again, you can ride it with the other half of the position, risk free. |
