You're going to lose your ass....dirty job, but I suppose someone has to do it. By my calculations you're going to need a 90% win rate at those commissions and with .25 wins and 1.00 losses...to make a little. Your chances of a 90% win rate? Next to zip. I used to know a guy on the floor who traded for one tick. He had a lot lower commissions by far than you will have. He now sells recreational vehicles. OldTrader
Saxon, You are basically talking about scalping. Why did you decide this would work best on the ES? The problem with the ES is it's .25 tick increments (even though the full S&P contract is .10 tick increments). If you are serious about the size you want to get up to, the thing to do to even have a CHANCE at success is to trade 10 or 20 of the full size contract, not the S&P. There are floor traders who do exactly that. You won't make $12.50 minus commissions X 100 ($1250) on every win, you would make 40% of that ($500), but your chances of being able to do an 80% plus win rate would be much greater (still using a 1 pt stop), and you could perhapd do that enough times a day to make it work out.. Remember, if you use the market order method you need the price to actually move TWO ticks in your favor. I would never ecommend attempting this, though - even with super-low commissions. One other thing to consider would be another E-mini. The ER2 for example. You can't do 100 contracts in one lot without a bunch of slippage (which is unacceptable for scalping, obviously), but you can usually get a 20 lot or less fill in one shot with little or no slippage. With that instrument the tick size is .10, which is $10, and with a 20 lot a 1 tick win is $200. You probably still need a 1 point stop cuz it's so jumpy, but that works in your favor too - the likelihood of it bouncing in your favor by two ticks even by sheer accident is very high. One way to check this would be to look at the ATR of a 1 minute chart and see the avg range of each candle. In the end, though, it will all come down to the accuracy of your entries and how wide your stops are, even with the lowest commissions. You can't escape the math. If your signals/entries don't produce a win % greater than 80%, you will be toast. Good luck! W
I avoided your question because there is need to answer it. I have studied ES and in my view hitting it for 1/4 point is not that hard to do provided you are not going against the trend and you do not get too greedy and wait for a profit in the range of 3/4 or a whole point. Next time you watch the ES see how often the tick goes 1/4 and then retracts to the original position. The important part is to go with the trend and there is a very good chance getting filled most of the time. Does it work in real time, I do not know and have not tested it using real money, I am still searching brother.....
fact is that in the reald world of tradin', with real orders and real money on the line things turn upside down and that's when all the most beautiful dreams get shattered; don't worry tho, u may decide to ignore the advice u gotten in this thread, but reality will catch up with u as soon as u enter your first trade.
I have tried this, using both market order and limit order methods. And for this type if micro-scalping, a simulator doesn't really cut it. The only way you'll really see if it works is to go at it live. And in case you are wondering, I am not using this sort of system. I do hope it works out for you though.
remember to take into account of where you are in the q, it may go 1/4 but it may not hit your order if you are wayyy back in the q.
I think you missed the main idea. Given the fact that 1 point on ES = $12 and IB charges what 3.60 round trip per contract the $5 fee was a round number. Granted with that kind of turn over I am certain I could get a much lower commission. But this was not the point that I was trying to make. Point was could a profit be generated scalping 1/4 of a point on ES? As for baseball, I do not get the comparison you are making. I do not follow sports so you just lost me there. What does average baseball player batting average has to do with trading is beyond me. Could you please elaborate on that point a little bit more? And one more thing where did you get that 6/10 probability from? Reagards saxon
How often would that happen if I am not selling at the top of the run or at the bottom when most of the motion happens? 100 lot is not that big of a deal on ES I presume and if I am going with the trend eventually I will get filled especially if the tick goes another 1/4 or 1/2 up. Is my logic correct?
u know what, stop guessin', open an acct and try out. come back after a couple month and tell us how u fared.