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Why are we trading /ES or /NQ? I understand that futures provide accurate volume and order flow data that make them better than other instruments IF you use volume and OF for trading. But if we are just using pure PA, why are we trading an index with such low volatility that almost no professional traders can make money trading it? Why do I say this? Lance Breitstein (now retired trader after making over $60M with Trillium) confesses that he could never make money trading ES/SPY. In fact, he stated that none of the 100 or more professional traders at Trillium could make any money trading /ES and were instructed to trade other instruments. Here is the podcast of him talking about this ( https://www.youtube.com/watch?v=sMofWAJg3Ok&t=2742s). So why do we continue to beat our heads against a wall and lose money day after day with /ES?
It is a fair question and part of the difficulty may lie in understanding what PA actually is and why Al took the approach that he did in developing critical concepts to encapsulate the "rules of the game".
Al simplified a very complex world into a systematic approach to manage all markets and to evaluate efficiencies of tools (seriously just an ema. . . the other tools are supplemental and optional! ). Different traders and their backgrounds may be limited in what they are exposed to tool wise, and technique wise, and thereafter finding edge, adaptation to other markets may be difficult as specific tools may not apply. This means trend traders, when attempting to navigate trading ranges, which have lower probability and require different money management rules potentially, will have potentially great difficulty. The ES often can spend a lot of time in a trading range, which also goes for very efficient markets (forex etc). A stock trader will instead have many stocks which can potentially trend and switch to those.
However, becoming familiar with trends, trading ranges, and the mixture environments, allows for learning a complete range of techniques which can broadly be applied to other markets, stocks, etc. Therefore, learning how PA applies to the ES, which is a professional market, can enable a trader to migrate to wherever he finds edge.
Beyond learning the complexities of PA, because all environments are potentially tradable (with exception to barb wire (tight trading ranges), which should just be avoided, the ES offers the ability to scale as large as an individual can manage without ever having to migrate elsewhere. Futures additionally have tax advantages, and it is just as easy to go long, as short (many may not recall that in 2008, going short on stocks was prohibited for awhile).
So, is it an easy market? Certainly not. However, one is able to learn and experience the broad array of environments and the transitions, as opposed to just trading trends. So a full complement of PA environments, situations, as well as approach and money management are discussed both within the books, and application during the live trading room. Please note that live trade calls are not possible because of regulations. However, the moderators and Al do overview appropriate entries, management and potentials of what the market is doing - essentially evaluating probability real time. Probability assessment, which is based on context, is the most critical skill to develop, and applies to all instruments.
Learning PA can be difficult because of what it encompasses. The ES is a good environment to experience all of it, which is both supplemented and enhanced by all of the material which Al offers and makes available.
Feel free to ask questions and there is some very good experience within the forum, and especially on evaluating the markets in the trade room. Al's content in the video course is absolutely phenomenal and the depth and breadth is like no other available training. The ES offers a great way to showcase the variety of techniques which are in the course.
Hopefully helpful and good trades to you!
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