If I enter long, for example, on a limit order with four contracts and my target is 3 ticks on the ES, how much profit would be there after factoring in slippage, and spread (please ignore commission for this example). Thank you.
I am successful at scalping on Ninja Trader's Market Replay. I use methods that i have learned from Price Action Trading Systems. He scalps for 6 ticks, and goes for 6 because I think he said (in his videos) that you tend to lose a tick or two (slippage?) so that it ends up being a profit of about 4 ticks per scalp after the trade completes. I don't quite understand the reason a 6 tick move ends being less than a 6 tick profit, if this is actually true. I use the an ATM strategy on Market Replay where my target of 6 ticks is set as soon as the buy/sell limit order is triggered. Sometimes getting 6 ticks is a struggle. It is much easier on my preferred set-ups to get 4 ticks, and that is what I am experimenting with. But being on sim I am not quite sure what the real life profits would be.
If you are entering on a Limit order and your target is 3 ticks which would be another Limit order, there is no slippage. Where the big "However" comes in, if price hits your target and fills say 3,000 contracts and you are 3,001- 3,002- 3,003- 3,004 in the que of Globex you are not filled, now what do you do? The the system you following have rules for this? AND you can't ignore commissions unless you have exchange seat. Trouble with scalping, most who try it are too inexperienced, you have to make perhaps 10 decisions without thinking, you have to react like you breath and blink of an eye can lose those 3 ticks. Plus, throwing in commissions, unless your losses are 25% or less losing trades and trade profits are not less than risk, between the losses, breakeven trades and commissions, you are losing. I been day trading S&P/ES for 26 years, recently returned after illness, and I have to say, the six months of absence I have had and still having to get my groove again to scalp the ES. Starting small and not until I am my old self, not increasing size. I think the ES is by far the toughest market to learn how to trade, Nasdaq a more forgiving market to start and still make a good profit. Unless you have a ton of experience, I never recommend to anyone to scalp, especially the ES.