Futures vs stocks

Buying futures is easy and requires less money than buying stocks. Buying futures can be for various reasons, eg hedging, speculation or for strategic reasons, eg. China purchasing futures contracts to lock in the price it will pay on the open market while filling its reserves..
If you open a futere contract of the German index the DAX, you open a contract which corresponds with an amount of stocks in the German index DAX of about 4853 x 25 = 121.325 euro. The multiplier 25 is a constant which is different for every futuremarket and 4853 being the actual price of the index.
No suppose you could choose to buy this amount of stocks directly on the market or open a future contract. What do you prefer?
Soros would know the answer, he would allways prefer the stocks. Why? Because the price of the future differs from that of the underlying index due to volatility, during time of the futurescontract and dividend expectations, the future price usually being higher than the underlying.
So suppose after opening an contract the volatility drops to zero (theoretical but for the purpose of the comparison) till the end of the fututre contract, the price difference between the index and the future is a loss, so even without changing prices at all. The buyer of the underlying index didnot loose anything, on the contrary: though no price gains, he gained divend from his underlying stocks.

daytrading
FDAX

Trading, the internet and the media

It is for sure that internet and the media had an big impact on the popularity of trading. Many try to make a living or at least make some money with trading. Internet has made it easy to acces the markets via an online broker or directly depending on the market organisation.

It is no surprise than that also tv broadcasters try to make money with programs or even complete cable net services about trading. Now to get more and more screenwatchers nothing seems to be untried (a phenomenon also seen in my country the Netherlands where programs will be broadcast about sperm donors and so on, christ sake). This seems to be the case with this program of CNBC too. What can be said? Will somebody be able to follow his recommendations? Isn't just too much and too fast for somebody investing his money? Is this real?

daytrading
FDAX

The edge

I started trading again yesterday after a holiday of more than a week. The markets at the highest levels, the DAX almost at the magical 5000 level. OK allways difficult to start up again.
I got more confidence in my trading lately. I rememebered these words from a book I read: "finding your edge". I think I found my edge as a trader. How did I do that?

Well first off all I reckognised the unimportance of indicators in my trading. I got rid of them all. I only use the price itself and this liberated me from a whole lot of grail seeking hours. Secondly I started to monitor my bad habits. I sometimes lose my control and become impatient. I learned to wait to play my cards. Well I have a way to go from here. It is never over and it will never stop.
I read something else too: Trading is a game in which you play against the best players in the world. It is not an equal playing field as in sports where Juventus plays against Arsenal but not against some local soccer team. This may frighten you but this is reality.

daytrading
FDAX