ETFs or Futures?
I am also very familiar with trading the E-Minis. After all, all of the QQQ setups come from the Nasdaq E-Mini charts. And I do trade the E-Minis to understand the ETF trading. My approach is: the more one understands about the market, the better off one is. So to trade the Qs, one really should understand the dynamics of the futures market. Similarly, to trade the SPYs, one should understand the S&P futures counterpart. Anyway, there are distinct similarities and differences between the ETFs and E-Minis. The similarity comes down to chart movement, setups, etc. QQQ = NQ (Nasdaq EMini) and SPY = ES (S&P EMini). So, since they both set up, move, etc., the same way (ETFs and futures), which does one select as the vehicle of choice? There are basically four areas to consider: 1. Leverage 2. Liquidity/Order Entry 3. Commission differences 4. Tax treatment differences So let’s touch on each of these areas and make some comparisons. Before I do that, I’d like to state that there is no “right
