ECN Selection ?

Discussion in 'Order Execution' started by ac14461, Jun 11, 2009.

  1. ac14461


    Kind of new to trading.

    I use TradeStation and trade "citibank" in block of 10,000 shared and just found that for orders using their default "intelligent routing' the orders actually get sent to a market maker of their discretion leading to severage slippage due to time lag ( 7 minutes to execute a spread of 0,01 difference between b&a.

    I tried routing through ARCA and other ECNs but their execution time was not much better.

    Q- Looking at the market depth, how does one know which is the best ECN for execution assuming that they all have ample volatility of the stock.

  2. Slippage on C? really?

    Don't use market orders... 10,000 is nothing for C
  3. 7 mins to fill on a C mkt order? no ECN would be in business if it had execution times like that. i'd put money on it being a broker issue.
  4. ac14461


    I believe I found out what may have happen.

    Like every newbie, I got excited that my first trade of 10,000 Long 0.01 and stop market -0.01 went profitable. I repeated this 3 more times with loses.

    I was scalping in a very narrow margin and also what I discovered in my losing trades that day was that there were an overwhelming number of sellers compared to buyers. More sellers than buyers naturally forces lower prices.

    The markets have 'humbled' me and am back to trading small blocks of 100-200 shares between my S/R lines :D

  5. How many cents were you trying to scalp C for? The stock has such a narrow range.

    I think you're better of scalping other liquid stocks like JPM or WFC. You would save A LOT on commissions.
  6. ac14461


    You will laugh, but I was scalping a penny.
  7. (I'm holding back my laughter)

    But yes.. that won't work. Also, you could have 10 winners and if 1 trade went sour... you could've lost all the profits from those combined 10 trades.

    I'm not a market wizard, but that strategy won't work. Scalping is a very difficult strategy to begin with. The biggest disadvantage is that you will pay high commissions, even if you add liquidity.

    If I were you and still wanted to continue to scalp, think about trading equally liquid stocks that trade in the $15 to $35 range. JPM is a great example. These stocks have a 1 cent spread and have bigger ranges. But like I said, you have to be very good and experienced to profit from scalping. There's just some days where scalping is very dangerous (one direction trending days). Scalping is better when the VIX is high. Again this is just my opinion so consult with other people too.