Your 100-lot ES order will not move the market, not even by a tick. The order book for the ES is very thick.
Gotcha, BTW, Love your handle: "Gotcha" Please understand regarding your first comment; "Given your long posting history," -- here is my "history of posts on ET: "Joined: Mar 26, 2002 Posts 159 Likes 15" (My History MACD) Your History "Gotcha": Joined: May 13, 2016 POSTS: 626, likes: 313 So, for the many years that I have been on ET I have posted 159 times in Fifteen Years. As opposed to your 626. With that said (and I guess it was unnecessary to comment on your "Given your long posting history") I will fulfill my obligation to respond to well-intentioned and serious questions. "give you the benefit of the doubt and ask that you explain a bit about what it is you do." To comply with your request, I will try and explain, by typing in this forum, a rather complex trading approach, It may take several lengthy posts and would not believe most will understand. I will provide some references in these posts which may help to clarify. Realizing, That most traders never achieve success or financial freedom as a result of attempting to make a living as a trader. Statistics posted in various places on the Internet, indicate that approximately 95% of the new accounts opened to trade will be closed within six months Reasons, for that, is explained as being: undercapitalized, lack of trading skills, or perhaps discipline. Obviously, we as traders should not be adopting which has so long proven to Not Work. Indicators, trend lines, moving average crossovers, Guru software including "proprietary" changes in oscillators, study settings and the like do not work -- if these did -- with the viral nature of the internet -- every trader would be trading profitably. Every time you decide to place a DIRECTIONAL trade, "I think ES is going to go up so I will buy a future contract" you have a 50% chance of being right. After you are in the trade the market will either go up, down or sideways and you will either be stopped out with a loss or maybe with correct management you may get a profit. 50% of the time. So you will occasionally lose. If you have a small or medium sized account these losses, even if small are in a way catastrophic. The loss not only affects your Psyche, but now you have to overcome the loss before you can become profitable. So even small losses with a win ratio of 50% are hard to overcome. Stops, are what contributes to the losses. Most new traders are told to use a small stop and a ratio of 1 to 3 for their targets. Lose one unit and target a win of 3 units. How do you pick your stops? Arbitrarily? and your targets? Frequently we find that the market stops us out and then moves in the direction we chose, but alas without us. Each market requires different stops. Some stops will not even cover the "noise" movement and those who are trading on tick charts will be looking for small gains and consequently small stops. Oh, I know you have some indicators that mark the charts so that you can take profits and enter and exit trades successfully. You may even have a Guru in a chat room that will assist. So much for that dismal picture. Now, what is it that I do? I do not use stops. (Think, "Stops are Evil) Note, that your stops become market orders when hit and can be gapped over without a fill. Isn't trading without stops dangerous and "scary"? Not if you are Hedged. So think of it as a two horse race. You are betting both horses to Win. If the losing horse cost you $10 and Winner paid $15 you have netted $5. So now how to find those odds and the betting proposition? Wasn't the election of Trump vs. Hillary a 2-horse Race. Didn't some like the Koch brothers contribute (Bet on both Sides?) So not being DIRECTIONAL, solves the problem of picking the right direction when trading. No need to bet Long or Short, no need for stops. Obviously, those who may have noticed, as I am sure Mr. Doug Stewart has, that this is like the Insurance Companies operate so successfully. A 17-year-old driver pays more for insurance than a 45-year-old driver with a good driving record. With proper evaluation of risk and the appropriate charge the Insurance company will not lose. Yes, an occasional claim for loss will be made but they have priced that into their charges. This method, BTW, is the same trade strategy that market makers use. They are required to take both horses in the race. They take longs as well as shorts at the same price and work on the bid /ask spread. It is also the way the Casinos and Bookies operate. Insurance companies, casinos, sports books, and good market makers are consistently profitable. Why not Copy Their Winning Ways??? I will continue this in my next post which hopefully, with this post in mind will be shorter and actually give you the hows and whys to accomplish this Insurance/Bookie style of trading.
I agree and I don't agree. Many people are talking about this and not one is showing direct examples. Here are two snapshots of the DOM during the action yesterday from my replay which records the depth data. Notice that sometimes total depth is about 6k during a slow time, other times it hits about 9-10k, and just before the close, the total depth is easily 20k. The inside bid/ask can sometimes reach just around 100 contracts (137 is the ASK for the second snapshot. We have to assume that if it drops below 100 for a second, and a market order it sent in for 100 contracts, it would clear an entire level and move down/up one tick. Now obviously this is just one tick, and these levels refresh so quickly so its not like there will be no more buyers or sellers at that level to refresh it, but timing might sometimes interfere with pushing through 100 contracts at one price level. Also, depending on where he is in the que, he might not get all filled. If he is choosing his levels carefully and trying to get in at an exact level that is obvious to everyone, he might get only partially filled before price bounces off and never looks back.
Overnight, I will address this in detail in another post. Quickly the answer is you lost a directional bet on the Cl of 1 point or $1000, however, if you were hedged you may not have experienced any loss. You were long @45 but you were also short @45 so if managed correctly you would have made some money. It is the explanation of how to do that I will cover in this thread in response to other posters as well. Thanks for your good question.
This is a half-wit response. If my trading profit depended on psychology, I'd be up shits creek. Knowledge is crucial
Good luck, the transition from sim to live can be nasty, keep the account as small as possible. If daytrading ES you don't need 50k like some around here say, start with 1500 and wire more later if needed. That will force your blowup days to be smaller.
The reason I mention this is because in the past year or two, there are so many new aliases that pop up here, say outrageous things, stir up trouble, and are gone. So even though you don't post much, seeing that you have been registered since 2002 meant that you were at least a long time member/reader and that does give some credibility. Of course all of this is the dream, but the devil is in the details, so I eagerly await your examples. Using what you have written so far, I wonder how it can be achieved to not be directional because even with a hedge, you still have to have one trade work out better than the other. I mean you go long and short in two different accounts, they just cancel eachother out. If you go long something like ES, and short something like YM, which I have read some people do in order to make the money value smaller, they still take a direction since ES the dollar value of ES is higher than YM. (unless of course YM for some reason makes a much bigger move than ES, and lets also not forget that sometimes the correlations break down so both indexes might go against you such as long ES, and it goes down so you lose, and you short YM, but it goes up, so you lose again). Going to hedging with options, once again, how many puts need to be bought and what does this cost in order to hedge out an ES position that might go down 10 or 20 points? This is why I hope you can provide a direct example because there are so many combinations and on the surface, I don't think any truly fulfill the idea you are trying to get across.
Thank you, Gotcha ! My guess is that we both need a Life, as today is Saturday and beautiful sunny day and we are jabbering on ET. For shame on us. That said, let me try and answer, somewhat intelligently, what your good observations point to as questions of what appears to be posted by someone who may have devious methods to harm the unsuspecting reader. BTW, I share your distrust of Trollers who are looking to sell something. Baron, no doubt has a way to eliminate them. Just an aside, years ago I would have bought gladly from scammers who might have found the Holy Grail. Some would call my trading, "Statistical Arbitrage" or "Delta Neutral" trading -- much information is available on a google search on those terms. I call it a 2-Horse Race and should perhaps copyright or trademark that name. Clever maybe, but descriptive of the problem; Which is Directional Trading using Stops. Directional trading is at best a coin flip when entering the trade. Heads you win tails you lose (Long wins or Short Wins). To protect from loss or to create a condition where one can be profitable with winning 6 out of 10 trades is the plan. Most know it ain't gonna work regarding of your choice of indicators, and razzle dazzle software which tells you with an arrow to go short and then exit with the up arrow. Nothing is new about trading. It is just old stuff repackaged for the newbie wannabes. Avoid trying to predict the markets -- that is my conclusion, and finally, has produced consistent income. Now let's talk about some key concepts. This is Pair Trading. Yes it can and does work. I do that sometimes but only when certain conditions excist and the markets are truly Corolated. Not the best trade in my arsenal but occasionally I do trade for example 2 ES long and 5 NQ's short as a pairs trade. Works a high percentage of the time. (Just providing an answer, not suggesting that it is Fav). Don't try this at home unless you have the rules which are not part of this discussion. You are also correct that I cannot be Long the ES and Short the ES in the same account. Even with 2 accounts which would be possible, it is Not a profitable strategy except for the brokers. Now we need to discuss a key to hedging which will permit both long and short the ES in the same account and will produce profits. The terms needed to understand this is Symmetrical and Asymmetrical returns. Symmetrically is like trading stock or the future. For each penny AAPL goes up you make $1.00 if you are long 100 shares of stock. Same with futures for every tick that ES move up, you earn $12.50 if you are long the futures contract. (Sorry if this is too "Ned and the First Reader", but one never knows who the reader's of ET are. Options are not linearly priced these are Asymmetrical Returns. If the future goes up one point the value of the option may not increase by the same 1 point of value, as in the ES example $50. There are several factors that make up the pricing formula for options. Fortunately, we need not know the meaning No need to stress, the formula is not necessary for us to make money. The important point is I can be Long The ES using options and in the same account, I can be Short the ES Future. I now am in a "2-horse race" and non-directional. I have the opportunity to make money if the ES goes up or down or even sideways. Is this Way too Complicated and hard to learn? NO. It has been said, "If you can Order a Pizza" you can learn to trade this way. You order a futures contract Long and you add 2 ES options Short (instead of anchovies) and you can do this trade with just one push of a button on your computer. WoW. Here is the "rub" -- you need to learn when to optimize the quality of the Pizza by ordering at the right time and place. So in this example, we are Short1 future at say 45 and short 2 Puts. Will try and post examples. { Wow, I have never worked so hard for so little money -- this posting of images that will be understandable -- isn't so easy...} I could just recommend you buy a book to start for example: Warning: NO NEED TO BUY THIS BOOK The point I am making is most cannot learn to trade profitably from a book. I am trying to get 4 images of a trade to post here. It is getting late so please allow me to post later but Soon.